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What changed in FIRST CITIZENS BANCSHARES INC /DE/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FIRST CITIZENS BANCSHARES INC /DE/'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+789 added−857 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-21)

Top changes in FIRST CITIZENS BANCSHARES INC /DE/'s 2025 10-K

789 paragraphs added · 857 removed · 460 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

107 edited+49 added−63 removed83 unchanged
Biggest changeEnhanced Prudential Standards BancShares is subject to certain enhanced prudential standards as a bank holding company (“BHC”) with more than $100 billion in consolidated assets under the Bank Holding Company Act of 1956, as amended (the “BHCA”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended (the “Dodd-Frank Act”), and the implementing regulations promulgated thereunder.
Biggest changeThe following discussion is a high-level summary of the material laws and regulations that apply to BancShares, but the summary is not intended to be exhaustive or describe all of the laws, regulations and policies that apply to BancShares. 7 Enhanced Prudential Standards BancShares is subject to certain enhanced prudential standards as a BHC with over $100 billion in consolidated assets under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended (the “Dodd-Frank Act”), in addition to the prudential standards required under the Bank Holding Company Act of 1956, as amended (the “BHCA”), and the implementing regulations promulgated thereunder.
Holding’s children and grandchildren have served as members of the Board of Directors (the “Board”) of BancShares and of the Board of Directors of FCB (collectively with the Board of BancShares, the “Boards”), as chief executive officers and in other executive management positions and, since BancShares’ formation in 1986, have remained stockholders owning a large percentage of its common stock.
Holding’s children and grandchildren have served as members of the Board of Directors of BancShares (the “Board”) and of the Board of Directors of FCB (collectively with the Board of BancShares, the “Boards”), as chief executive officers and in other executive management positions and, since BancShares’ formation in 1986, have remained stockholders owning a large percentage of its common stock.
In connection with those laws and regulations, BancShares is subject to regulation, supervision and periodic examination by supervisory authorities, including the FDIC, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Federal Reserve Bank (the “FRB”), and the Consumer Financial Protection Bureau (“CFPB”).
In connection with those laws and regulations, BancShares is subject to regulation, supervision and periodic examination by supervisory authorities, including the FDIC, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Federal Reserve Bank (the “FRB”), and the Consumer Financial Protection Bureau (the “CFPB”).
On September 23, 2024, the DOJ updated its guidance to federal prosecutors in conducting an investigation of a corporation related to the evaluation of corporate compliance programs, including an expectation that companies will have conducted a risk assessment regarding the use of new technologies like AI and taken appropriate steps to mitigate related risk.
On September 23, 2024, the DOJ updated its guidance to federal prosecutors in conducting an investigation of a corporation related to the evaluation of corporate compliance programs, including an expectation that companies will have conducted a risk assessment regarding the use of new technologies like AI and will have taken appropriate steps to mitigate related risk.
Our Vermont insurance captive subsidiary is required to file reports, generally including detailed annual financial statements, with the insurance regulatory authority, and its operations and accounts are subject to periodic examination by such authorities. BancShares’ equipment financing and leasing operations are subject to laws, rules, and regulations administered by authorities in jurisdictions where business is conducted.
Our Vermont insurance captive subsidiary is required to file reports, generally including detailed annual financial statements, with the insurance regulatory authority, and its operations and accounts are subject to periodic examination by such authorities. 16 BancShares’ equipment financing and leasing operations are subject to laws, rules, and regulations administered by authorities in jurisdictions where business is conducted.
Our long-term focus allows us to make strategic decisions and investments designed to build long-term value and stability for all stakeholders, while skillfully managing risk along the way. Our human resources team works to identify and deploy the critical talent needed to support these strategic objectives and our unified culture.
Our long-term focus allows us to make strategic decisions and investments designed to build long-term value and stability for all stakeholders, while skillfully managing risk along the way. Our human resources team works to identify and deploy the critical talent needed to support our strategic objectives and our unified culture.
(“SVBB”) from the Federal Deposit Insurance Corporation (the “FDIC”) pursuant to the terms of a purchase and assumption agreement (the “SVBB Purchase Agreement”) by and among FCB, the FDIC, and the FDIC, as receiver of SVBB (the “SVBB Acquisition”). SVBB was established following the closure of the former Silicon Valley Bank.
(“SVBB”) from the Federal Deposit Insurance Corporation (the “FDIC”) pursuant to the terms of a purchase and assumption agreement by and among FCB, the FDIC, and the FDIC, as receiver of SVBB (the “SVBB Acquisition”). SVBB was established following the closure of the former Silicon Valley Bank.
FCB, as a North Carolina state-charted bank that is not a member of the Federal Reserve System, is also subject to the laws and regulations of North Carolina and supervision by the North Carolina Office of the Commissioner of Banks, as well as other state laws and state regulators in the states in which FCB operates.
FCB, as a North Carolina state-charted bank that is not a member of the Federal Reserve, is also subject to the laws and regulations of North Carolina and supervision by the North Carolina Office of the Commissioner of Banks, as well as other state laws and state regulators in the states in which FCB operates.
FCB has implemented a program designed to facilitate compliance with the full extent of the applicable BSA, OFAC and Patriot Act related laws, regulations and related sanctions. 15 Consumer Laws and Regulations FCB is subject to certain laws and regulations designed to protect consumers in transactions with banks.
FCB has implemented a program designed to facilitate compliance with the full extent of the applicable BSA, OFAC and Patriot Act related laws, regulations and related sanctions. Consumer Laws and Regulations FCB is subject to certain laws and regulations designed to protect consumers in transactions with banks.
The California CCDAA requires annual public disclosure of scope 1, 2, and 3 greenhouse gas emissions, with scope 1 and 2 reporting required in 2026 and scope 3 in 2027, and the California CRFRA requires biennial public disclosure of climate-related financial risks, with the first disclosure required by January 1, 2026.
The California CCDAA requires annual public disclosure of scope 1, 2, and 3 greenhouse gas emissions, with scope 1 and 2 disclosure required in 2026 and scope 3 in 2027, and the California CRFRA requires biennial public disclosure of climate-related financial risks, with the first disclosure required by January 1, 2026.
Interested parties may also directly access the SEC’s website ( www.sec.gov ), which contains reports, proxy and information statements and other information electronically filed by BancShares. Except as specifically incorporated by reference into this Annual Report on Form 10-K, information on those websites is not part of this report. 19
Interested parties may also directly access the SEC’s website ( www.sec.gov ), which contains reports, proxy and information statements and other information electronically filed by BancShares. Except as specifically incorporated by reference into this Annual Report on Form 10-K, information on those websites is not part of this report. 17
In addition to laws and regulations, state and federal bank regulatory agencies may issue policy statements, interpretive letters, and similar written guidance applicable to BancShares. 7 Regulations applicable to banking organizations generally serve to protect depositors and other customers, the Depositors Insurance Fund (“DIF”), the broader economy, and the stability of the U.S. financial system.
In addition to laws and regulations, state and federal bank regulatory agencies may issue policy statements, interpretive letters, and similar written guidance applicable to BancShares. Regulations applicable to banking organizations generally serve to protect depositors and other customers, the Deposit Insurance Fund (the “DIF”), the broader economy, and the stability of the U.S. financial system.
As BancShares continues to grow, it may cross additional risk-based asset thresholds, subjecting it to additional regulatory requirements and enhanced scrutiny. 8 Basel III .
As BancShares continues to grow, it may cross additional risk-based asset thresholds, subjecting it to additional regulatory requirements and enhanced scrutiny. Basel III .
However, in addition to being a BHC, the Parent Company elected to be an FHC under the Gramm-Leach-Bliley Act of 1999 (the “GLBA”).
In addition to being a BHC, the Parent Company elected to be an FHC under the Gramm-Leach-Bliley Act of 1999 (the “GLBA”).
Failure to meet any enhanced prudential standards discussed above, or other mandatory or discretionary action by regulators, could impact the Parent Company or FCB’s ability to complete or place limitations on the consummation of mergers, acquisitions or similar transactions.
Failure to meet any enhanced prudential standards discussed above, or other mandatory or discretionary action by regulators, could impact the Parent Company’s or FCB’s ability to complete or place limitations on the consummation of mergers, acquisitions or similar transactions.
Failure to meet any enhanced prudential standards discussed above, or other mandatory or discretionary action by regulators, could impact the Parent Company or FCB’s ability to declare dividends or make other payments or capital distributions, including equity repurchases.
Failure to meet any enhanced prudential standards discussed above, or other mandatory or discretionary action by regulators, could impact the Parent Company’s or FCB’s ability to declare dividends or make other payments or capital distributions, including equity repurchases.
Globally Systemically Important Banks (“GSIBs”), are subject to the most stringent enhanced prudential requirements, and Category IV banking organizations (i.e., between $100 billion and $250 billion in total consolidated assets, and less than $75 billion in nonbank assets, off-balance sheet exposure, cross-jurisdictional activities, and weighted short-term wholesale funding) are subject to the least stringent requirements.
Globally Systemically Important Banks (“GSIBs”), are subject to the most stringent enhanced prudential requirements, and Category IV banking organizations (i.e., those that have between $100 billion and $250 billion in total consolidated assets, and less than $75 billion in nonbank assets, off-balance sheet exposure, cross-jurisdictional activities, and weighted short-term wholesale funding) are subject to the least stringent enhanced prudential requirements.
Consumer and business customers may also conduct banking transactions through various digital channels. In addition to our banking operations, we provide various investment products and services through FCB’s wholly owned subsidiaries, including First Citizens Investor Services, Inc. (“FCIS”) and First Citizens Asset Management, Inc. (“FCAM”), and a non-bank subsidiary First Citizens Capital Securities, LLC (“FCCS”).
Consumer and business customers may also conduct banking transactions through various digital channels. In addition to our banking operations, we provide various investment products and services through FCB’s wholly owned subsidiaries, including First Citizens Investor Services, Inc. (“FCIS”), First Citizens Asset Management, Inc. (“FCAM”), First Citizens Delaware Trust Company, and a non-bank subsidiary, First Citizens Capital Securities, LLC (“FCCS”).
The Parent Company will participate in the 2026 supervisory stress test which will determine the SCB applicable to the Parent Company. Additionally, federal banking agencies have developed prompt corrective action (“PCA”) thresholds (described below) for Regulatory Capital Ratios to determine whether an institution is well capitalized.
BancShares will participate in the 2026 supervisory stress test which will determine the SCB applicable to BancShares. Additionally, federal banking agencies have developed prompt corrective action (“PCA”) thresholds (described below) for Regulatory Capital Ratios to determine whether an institution is well capitalized.
For example, in Europe and in the United Kingdom, both the EU General Data Protection Regulation and the UK General Data Protection Regulation impose extensive obligations on companies that process personal data of individuals in Europe, with the potential for significant fines for non-compliance (up to 4% of total annual worldwide revenue).
In addition, the EU General Data Protection Regulation and the UK General Data Protection Regulation impose extensive obligations on companies that process personal data of individuals in Europe and the United Kingdom, with the potential for significant fines for non-compliance (up to 4% of total annual worldwide revenue).
Under the community benefit plan, FCB committed to invest $16 billion over a five-year period beginning in 2021 in the communities served by FCB, including $3.2 billion in home purchase, home improvement and mortgage refinance loans focused on LMI and minority borrowers in majority-minority geographies, $5.9 billion in small business lending, and $6.9 billion in community development lending and investments.
Under the community benefit plan, FCB committed to invest $16 billion over a five-year period beginning in 2021 and ending on December 31, 2025, in the communities served by FCB, including $3.2 billion in home purchase, home improvement and mortgage refinance loans focused on LMI and minority borrowers in majority-minority geographies, $5.9 billion in small business lending, and $6.9 billion in community development lending and investments.
Corporate also includes certain items related to accounting for business combinations, such as gains on acquisitions, day 2 provisions for credit losses, discount accretion income for certain acquired loans, and the offsetting impacts of noninterest expense allocated to the segments.
Corporate includes acquisition-related expenses and certain items related to accounting for business combinations, such as gains on acquisitions, day 2 provisions for credit losses, discount accretion income for certain acquired loans, and the offsetting impacts of noninterest expense allocated to the segments.
SEGMENT MARKETS AND SERVICES General Bank • Delivers services to individuals and businesses through an extensive branch network and various digital channels, and offers a full suite of deposit products, loans (primarily business/commercial loans and residential mortgages), and various fee-based services. • Provides private banking and a range of personal financial solutions for consumers, including private equity and venture capital professionals and executive leaders of the innovation companies they support, and premium wine clients. • Provides a variety of wealth management products and services to individuals and institutional clients, including brokerage, investment advisory, and trust services. • Provides deposit, cash management and lending to homeowner associations and property management companies.
SEGMENT MARKETS AND SERVICES General Bank • Delivers services to individuals and businesses through an extensive branch network and various digital channels offering a full suite of deposit products, loans (primarily business/commercial loans and residential mortgages), wealth management and private banking, and various fee-based services. • Offers a range of private banking and wealth management solutions to consumers, including private equity and venture capital professionals and executive leaders of the innovation companies they support. • Provides a variety of wealth management products and services to individuals and institutional clients, including brokerage, investment advisory, and trust services. • Provides deposit, cash management and lending solutions to homeowner associations and property management companies.
As a Category IV banking organization, subject to the applicable transition provisions, BancShares would be subject to modified LCR and NSFR requirements if it has $50 billion or more, but less than $75 billion, in average weighted short-term wholesale funding. Proposed Rule for Basel III Endgame.
As a Category IV banking organization, BancShares would be subject to modified LCR and NSFR requirements if it has $50 billion or more, but less than $75 billion, in average weighted short-term wholesale funding. Proposed Rule for Basel III Endgame.
Competition The financial services industry is highly competitive and continues to evolve as a result of changes in regulation, technology, product delivery systems, the accelerating pace of consolidation among financial service providers, and the general market and economic climate. BancShares competes with national, regional and local financial services providers.
Financial Statements and Supplementary Data. 5 Competition The financial services industry is highly competitive and continues to evolve as a result of changes in regulation, technology, product delivery systems, the accelerating pace of consolidation among financial service providers, and the general market and economic climate. BancShares competes with national, regional and local financial services providers.
Recognizing that well-being is an individual journey, our competitive benefits program has been thoughtfully designed to provide associates with options to choose from in five well-being dimensions – physical, financial, emotional, social, and community.
Recognizing that well-being is an individual journey, our benefits program has been thoughtfully designed to provide associates with options in five well-being dimensions – physical, financial, emotional, social, and community.
The Parent Company and FCB are subject to regulatory capital requirements under Basel III for the Tier 1 leverage ratio and ratios of qualifying capital to RWA (the “Risk-Based Capital Ratios” and, together with the Tier 1 leverage ratio, the “Regulatory Capital Ratios”).
BancShares and FCB are subject to regulatory capital requirements under Basel III for the Tier 1 leverage ratio and ratios of qualifying capital to RWA (the “Risk-Based Capital Ratios” and, together with the Tier 1 leverage ratio, the “Regulatory Capital Ratios”).
If an FHC ceases to meet all of these requirements, the Federal Reserve may impose limitations or conditions on the conduct of its activities, as well as its ability to make certain acquisitions.
If an FHC ceases to meet all of the eligibility requirements to be an FHC, the Federal Reserve may impose limitations or conditions on the conduct of its activities, as well as its ability to make certain acquisitions.
In general, the guidelines are principle-based and set forth regulatory expectations for, among other things, appropriate systems and practices to identify and manage the risk and exposures specified in the guidelines.
In general, the guidelines are principle-based and set forth regulatory expectations for, among other things, appropriate systems and practices to identify and manage the risk and exposures specified in the guidelines. Category III Requirements.
Supporting the health and well-being of our associates, BancShares offers benefits that include, but are not limited to: • medical plan options that include telehealth, dental and vision plan options, and wellness programs; • a 401(k) plan, flexible spending accounts, life and accidental death and dismemberment insurance, short-term and long-term disability coverage, numerous voluntary coverages, and discount programs; • paid time off and other time away such as holidays, parental leave, and volunteer leave; and • an employee assistance program.
Supporting the health and well-being of our associates, BancShares offers benefits that include, but are not limited to: • medical plan options that include telehealth, dental and vision plan options, and wellness programs; • a 401(k) plan, flexible spending accounts, life and accidental death and dismemberment insurance, short-term and long-term disability coverage, numerous voluntary coverages, and discount programs; • paid time off and other time away such as holidays, parental leave, and volunteer leave; and • a comprehensive mental health and well-being offering.
Certain of BancShares’ subsidiaries are also subject to additional supervision and regulation, as discussed below, and FCB is also subject to laws and regulations applicable to banks that govern trust and other fiduciary activities. Banking laws, regulations, and policies are continually under review by the U.S. Congress, state legislatures, and federal and state regulatory agencies.
Certain of BancShares’ subsidiaries are also subject to additional supervision and regulation, as discussed below, and FCB and certain of our other subsidiaries are subject to laws and regulations that govern their trust and other fiduciary activities. Banking laws, regulations, and policies are continually under review by the U.S. Congress, state legislatures, and federal and state regulatory agencies.
Pursuant to SEC rules and the listing standards of the Nasdaq mandated by the Dodd-Frank Act, Nasdaq listed companies are required to (i) adopt and implement a compliant incentive compensation clawback policy; (ii) file the clawback policy as an exhibit to their annual reports; and (iii) provide certain disclosures relating to any compensation recovery triggered by the clawback policy.
Pursuant to SEC rules and Nasdaq listing standards, Nasdaq listed companies are required to (i) adopt and implement a compliant incentive compensation clawback policy; (ii) file the clawback policy as an exhibit to their annual reports; and (iii) provide certain disclosures relating to any compensation recovery triggered by the clawback policy.
We prioritize supporting our business by striving to ensure we have the right talent in the right jobs and with the right skills to fulfill our strategic objectives. Our vision is realized by cultivating a foundation that includes both a strong business strategy and a unified culture.
We strive to ensure we have the right talent in the right jobs and with the right skills to fulfill our strategic objectives. Our vision is realized by cultivating a foundation that includes both a strong business strategy and a unified culture.
Transactions subject to review under the HSR Act are also subject to a 30-day waiting period, but the waiting period is only 15 days for transactions that are for cash tender offers or certain bankruptcy sales.
Transactions subject to review under the HSR Act are also subject to a 30-day waiting period, but the waiting period is only 15 days for transactions that are for cash tender offers or certain bankruptcy sales. Holding Company Status Activities.
The Parent Company is generally limited to managing or controlling banks, furnishing services to or performing services for its subsidiaries, and engaging in other activities the Federal Reserve determines by regulation or order to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.
As a BHC, the Parent Company’s activities are generally limited to managing or controlling banks, furnishing services to or performing services for its subsidiaries, and engaging in other activities the Federal Reserve determines by regulation or order to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.
As of December 31, 2024, the Regulatory Capital Ratios of the Parent Company and FCB exceeded the applicable Basel III requirements and the PCA well capitalized thresholds as further addressed under “Capital” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
As of December 31, 2025, the Regulatory Capital Ratios of BancShares and FCB exceeded the applicable Basel III requirements and the PCA well capitalized thresholds as further addressed under “Capital” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
FCB’s largest notable concentration of deposits by market share as of June 30, 2024 were in North Carolina (including our Direct Bank deposits) and South Carolina at 11.3% and 9.3%, respectively, which makes FCB the third largest bank in North Carolina and the fourth largest bank in South Carolina based on deposit market share according to the FDIC Deposit Market Share Report.
FCB’s largest notable concentration of deposits by market share as of June 30, 2025 were in North Carolina (including our nationwide Direct Bank deposits) and South Carolina at 11.8% and 9.5%, respectively, which makes FCB the third largest bank in North Carolina and the fourth largest bank in South Carolina based on deposit market share according to the FDIC Deposit Market Share Report.
The NSFR requirement ensures that a banking organization maintains minimum amounts of stable funding to support its assets, commitments, and derivatives exposures over a one-year time horizon.
The NSFR requirement is designed to ensure that a banking organization maintains minimum amounts of stable funding to support its assets, commitments, and derivatives exposures over a one-year time horizon.
On March 27, 2023 (the “SVBB Acquisition Date”), 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.
On March 27, 2023, 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.
(1) All other financial information not included in the segments is reported in “Corporate.” 5 Reportable segments are discussed further in the “Results by Segments” section of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8. Financial Statements and Supplementary Data, Note 22—Segment Information.
(1) All other financial information not included in the segments is reported in “Corporate.” Reportable segments are discussed further in the “Results by Segments” section of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 21—Segment Information of Item 8.
In addition, the Parent Company’s ability to make capital distributions, including paying dividends and repurchasing shares, is subject to the Federal Reserve’s restrictions on capital distributions under the Basel III capital rules.
In addition, the Parent Company’s ability to make capital distributions, including paying dividends and repurchasing shares, is subject to the Federal Reserve’s restrictions on capital distributions under CCAR (as described above) as well as under the Basel III capital rules.
Management’s Discussion and Analysis of Financial Condition and Results of Operations for information on our commercial and consumer loan concentrations by state. Human Capital As of December 31, 2024, BancShares employed approximately 17,191 full-time staff and approximately 284 part-time staff for a total of 17,475 employees. Our ability to attract, retain, and develop associates is critical to our success.
Management’s Discussion and Analysis of Financial Condition and Results of Operations for information on our commercial and consumer loan concentrations by state. Human Capital As of December 31, 2025, BancShares employed approximately 17,876 full-time staff and approximately 265 part-time staff for a total of 18,141 employees. Our ability to attract, retain, and develop associates is critical to our success.
Capital Planning and Stress Testing. As a Category IV banking organization, BancShares is required to submit an annual capital plan to the Federal Reserve and is subject to biennial supervisory stress testing by the Federal Reserve under its Comprehensive Capital Analysis and Review (“CCAR”) process in accordance with the applicable transition provisions.
As a Category IV banking organization, BancShares is required to submit an annual capital plan to the Federal Reserve and is subject to biennial supervisory stress testing by the Federal Reserve under its Comprehensive Capital Analysis and Review (“CCAR”) process.
These laws include certain portions of the GLBA, the federal banking agencies’ Computer-Security Incident Notification rule (the “36 Hour Rule”), the SEC’s item for cybersecurity incidents Current Report on Form 8-K (“Cybersecurity Form 8-K Item”), the California Consumer Privacy Act of 2018 (the “CCPA”), and the New York Department of Financial Services’ (“NYDFS”) 2017 cybersecurity regulation (the “NY Cybersecurity Regulation”).
These laws include certain portions of the GLBA, the federal banking agencies’ Computer-Security Incident Notification rule, the SEC’s item for cybersecurity incidents Current Report on Form 8-K, the California Consumer Privacy Act of 2018, and the New York Department of Financial Services’ 2017 cybersecurity regulation.
Regulatory Considerations BancShares is subject to laws and regulation that govern its operations and impact the products and services it may offer, the risks that it may take, the corporate and financial actions it may take, and the information it must publicly disclose.
Regulatory Considerations BancShares is a bank holding company (“BHC”) that is subject to laws and regulations that govern its operations and impact the products and services it may offer, the risks that it may take, the corporate and financial actions it may take, and the information it must publicly disclose.
In addition, Category I and II banking organizations, consistent with Advanced Approaches, must include accumulated other comprehensive income (“AOCI”) in capital for purposes of calculating regulatory capital requirements, but Category III and IV banking organizations are able to opt-out of this requirement. As noted above, Category III banking organizations may follow a standardized approach to calculating RWA.
In addition, Category I and II banking organizations, consistent with Advanced Approaches, must include accumulated other comprehensive income (“AOCI”) in capital for purposes of calculating regulatory capital requirements, but Category III and IV banking organizations are able to opt-out of this requirement.
The Federal Reserve requires a banking organization to resubmit its capital plan if there is a material change in the banking organization’s risk profile, financial condition or corporate structure since its most recent capital plan submission, or the Federal Reserve otherwise notifies the banking organization that a resubmission is required.
BancShares must resubmit its capital plan if there is a material change in its risk profile, financial condition or corporate structure since its most recent capital plan submission, or if the Federal Reserve otherwise notifies it that a resubmission is required.
The SCB is calculated as the greater of (i) the difference between the organization’s starting and minimum projected Risk-Based Capital Ratios under the severely adverse scenario in the supervisory stress test, plus the sum of the dollar amount of the firm’s planned common stock dividends for each of the fourth through seventh quarters of the planning horizon as a percentage of RWA, or (ii) 2.5%, which is equal to the minimum capital conservation buffer under Basel III.
Specifically, the SCB is calculated by the Federal Reserve for each banking organization that participates in the CCAR process as the greater of (i) the difference between the organization’s starting and minimum projected Risk-Based Capital Ratios under the severely adverse scenario in the supervisory stress test, plus the sum of the dollar amount of the firm’s planned common stock dividends for each of the fourth through seventh quarters of the planning horizon as a percentage of RWA, or (ii) 2.50%, which is equal to the minimum CCB under Basel III.
The following table includes the Basel III requirements and PCA well capitalized thresholds for the Regulatory Capital Ratios. 9 Basel III Minimum Basel III Buffer Basel III Total Requirement PCA Well Capitalized Threshold Regulatory Capital Ratios Total risk-based capital 8.00 % 2.50 % 10.50 % 10.00 % Tier 1 risk-based capital 6.00 2.50 8.50 8.00 Common equity Tier 1 4.50 2.50 7.00 6.50 Tier 1 leverage 4.00 — 4.00 5.00 Resolution Planning.
Basel III Minimum Basel III Buffer Basel III Total Requirement PCA Well Capitalized Threshold Regulatory Capital Ratios Total risk-based capital 8.00 % 2.50 % 10.50 % 10.00 % Tier 1 risk-based capital 6.00 2.50 8.50 8.00 Common equity Tier 1 4.50 2.50 7.00 6.50 Tier 1 leverage 4.00 — 4.00 5.00 Resolution Planning.
Significant deficiencies in a banking organization’s capital planning and stress testing processes may result in supervisory directives that require the banking organization to address the identified deficiencies and potentially limit the organization’s capital distributions. BancShares submitted a capital plan in 2024 in accordance with the regulatory requirements.
Significant deficiencies in a banking organization’s capital planning and stress testing processes may result in supervisory directives that require the banking organization to address the identified deficiencies and potentially limit the organization’s capital distributions.
Under the Dodd-Frank Act, certain enhanced prudential standards are mandatory for banking organizations with $250 billion or more in total consolidated assets, as well as nonbank financial companies that are deemed to be systemically important by the Federal Reserve.
Under the Dodd-Frank Act, certain enhanced prudential standards are mandatory for banking organizations with $250 billion or more in total consolidated assets, as well as nonbank financial companies that are designated as systemically important financial institutions by the Financial Stability Oversight Council and subject to regulation and supervision by the Federal Reserve.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. Geographic Locations As of December 31, 2024, BancShares operated branches in Arizona, California, Colorado, Florida, Georgia, Hawaii, Kansas, Maryland, Massachusetts, Missouri, Nebraska, New Mexico, Nevada, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, and Wisconsin. Refer to the Concentration Risk section in Item 7.
As of December 31, 2025, BancShares operated branches in Arizona, California, Colorado, Florida, Georgia, Hawaii, Kansas, Maryland, Massachusetts, Missouri, Nebraska, Nevada, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, and Wisconsin. Refer to the “Risk Management—Concentration Risk—Concentration” section in Item 7.
Resolution Plans submitted under the CIDI Rule generally require a more detailed discussion of the strategy for resolving the IDI than Living Wills (i.e., resolution plans required under the Dodd-Frank Act).
The CIDI Rule generally applies to IDIs with consolidated assets of $50 billion or more. Resolution Plans submitted under the CIDI Rule generally require a more detailed discussion of the strategy for resolving the IDI than Living Wills (i.e., resolution plans required under the Dodd-Frank Act).
FCB, as a state-chartered bank, is also subject to state consumer protection laws in the states in which it operates, and the Dodd-Frank Act enhanced the ability of state attorneys general to enforce federal consumer protection laws.
FCB, as a state-chartered bank, is also subject to state consumer protection laws in the states in which it operates, and the Dodd-Frank Act enhanced the ability of state attorneys general to enforce federal consumer protection laws. 14 Privacy, Data Protection, and Cybersecurity BancShares is subject to a number of federal, state, local and foreign laws and regulations relating to consumer privacy and data protection.
The eligibility requirements for an FHC include that the FHC and each of its subsidiary IDIs remain “well capitalized” and “well managed,” and any subsidiary IDI must have received a rating under the CRA of at least “satisfactory” in its most recent examination.
Such activities may include, among other things, securities underwriting or merchant banking. 11 The eligibility requirements for an FHC include that the FHC and each of its subsidiary IDIs remain “well capitalized” and “well managed,” and any subsidiary IDI must have received a rating under the CRA of at least “satisfactory” in its most recent examination.
Under the final rule, the agencies will evaluate a bank’s CRA performance based upon the varied activities that it conducts and the communities in which it operates, and CRA evaluations and data collection requirements will be tailored based on bank size and type. The final rule was preliminarily enjoined on March 29, 2024, following legal challenge.
Under the final rule, the agencies would evaluate a bank’s CRA performance based upon the varied activities that it conducts and the communities in which it operates, and CRA evaluations and data collection requirements would be tailored based on bank size and type.
Treasury) or (ii) complementary to such financial activity and does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally (as solely determined by the Federal Reserve). Such activities may include, among other things, securities underwriting or merchant banking.
Treasury) or (ii) complementary to such financial activity and does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally (as solely determined by the Federal Reserve).
(“FC International”), are subject to the Bank Secrecy Act of 1970 (“BSA”) and subsequent laws and regulations, including USA PATRIOT Act of 2001 (the “Patriot Act”), that require financial institutions to take steps to prevent the use of their systems to facilitate the flow of illegal or illicit money or terrorist funds, including AML compliance programs, and to report certain activity to the government.
Anti-Money Laundering & Economic Sanctions FCB and certain of our other subsidiaries are subject to the BSA and subsequent laws and regulations, including USA PATRIOT Act of 2001 (the “Patriot Act”), that require financial institutions to take steps to prevent the use of their systems to facilitate the flow of illegal or illicit money or terrorist funds, including AML compliance programs, and to report certain activity to the government.
An FHC with $100 billion or more in total consolidated assets is considered well managed if it receives a rating of “Broadly Meets Expectations” or “Conditionally Meets Expectations” for each of the component ratings under the Federal Reserve’s Large Financial Institution (“LFI”) rating system.
An FHC with $100 billion or more in total consolidated assets is considered well managed if it receives a rating of “Broadly Meets Expectations” or “Conditionally Meets Expectations” for at least two of the three supervisory components and no more than one “Deficient-1” component rating under the Federal Reserve’s Large Financial Institution (“LFI”) rating system.
Category II banking organizations have $700 billion or more in total consolidated assets, or $100 billion or more in total consolidated assets and $75 billion or more in cross-jurisdictional activities, and do not meet the criteria for Category I banking organizations.
Category II banking organizations have $700 billion or more in total consolidated assets, or $100 billion or more in total consolidated assets and $75 billion or more in cross-jurisdictional activities, and are not GSIBs.
All other financial information is included in the “Corporate” section of segment disclosures.
All other financial information not included in the segments is reported in the Corporate section of the segment disclosures.
BancShares has expanded through de novo branching and acquisitions and as of December 31, 2024, operates a network of more than 500 branches and offices nationwide, predominantly located in the Southeast, Mid-Atlantic, Midwest, and Western United States, providing a broad range of financial services to individuals, businesses and professionals.
BancShares has expanded through de novo branching and acquisitions and as of December 31, 2025, operates an extensive network of branches and offices, predominantly located in the Southeast, Mid-Atlantic, Midwest, and Western United States, providing a broad range of financial services to individuals, businesses and professionals. At December 31, 2025, BancShares had total consolidated assets of $229.70 billion.
These guidelines establish general standards relating to internal controls and information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth and compensation, fees and benefits. Additional topics include cybersecurity, climate financial-risk management, and compensation, as discussed further below.
The federal banking agencies have adopted guidelines establishing general standards related but not limited to, internal controls and information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth and compensation, fees and benefits. Some additional topics include cybersecurity, climate financial-risk management, and compensation, as discussed further below.
The Federal Reserve, along with the FDIC and the Office of the Comptroller of the Currency (the “OCC”), adopted tailoring rules (“Tailoring Rules”) for the applicability of enhanced prudential standards to banking organizations with $100 billion in total consolidated assets, which apply to the holding company and their subsidiary depository institutions.
Pursuant to authorization under the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, the Federal Reserve, along with the FDIC and the Office of the Comptroller of the Currency (the “OCC”), adopted tailoring rules (the “Tailoring Rules”) for the applicability of enhanced prudential standards to banking organizations with $100 billion or more in total consolidated assets, which apply to holding companies of FDIC-insured depository institutions (“IDIs”) and their subsidiary depository institutions.
New York is considering a law similar to the California CRFRA. 17 Compensation Our compensation practices are subject to oversight by the federal banking agencies, Nasdaq, and, with respect to some of our subsidiaries, by other financial regulatory agencies.
Compensation Our compensation practices are subject to oversight by the federal banking agencies, Nasdaq, and, with respect to some of our subsidiaries, by other financial regulatory agencies.
FDIC Insurance FCB is required to pay the FDIC premiums for deposit insurance according to base deposit insurance assessment rate schedules, which remain elevated following a uniform increase of 2 basis points (“bps”) by the FDIC that began in the first quarterly assessment period of 2023.
Additionally, FCB committed to $35 million in CRA grants, with $10 million of that sum dedicated to an affordable home mortgage subsidy program. 12 FDIC Insurance FCB is required to pay the FDIC premiums for deposit insurance according to base deposit insurance assessment rate schedules, which remain elevated following a uniform increase of 2 basis points (“bps”) by the FDIC that began in the first quarterly assessment period of 2023.
At December 31, 2024, BancShares had total consolidated assets of $223.72 billion. Throughout its history, the operations of BancShares have been significantly influenced by descendants of Robert P. Holding, who came to control FCB during the 1920s. Robert P.
Throughout its history, the operations of BancShares have been significantly influenced by descendants of Robert P. Holding, who came to control FCB during the 1920s. Robert P.
Under the LFI rating system, the Federal Reserve assigns ratings based on three supervisory components: (i) capital planning and positions, (ii) liquidity risk management and positions, and (iii) governance and controls.
Under the LFI rating system, the Federal Reserve assigns ratings based on three supervisory components: (i) capital planning and positions, (ii) liquidity risk management and positions, and (iii) governance and controls, and each component has four potential ratings: “Broadly Meets Expectations,” “Conditionally Meets Expectations,” “Deficient-1” and “Deficient-2”.
Attorney General consents to a shorter waiting period or the waiting period is otherwise waived by the approving banking agency due to an emergency that requires expeditious action or the proposal involves a probable bank failure.
Under the BHCA and BMA, mergers and acquisitions by BancShares are subject to a waiting period of 30-days unless the U.S. Attorney General consents to a shorter waiting period or the waiting period is otherwise waived by the approving banking agency due to an emergency that requires expeditious action or the proposal involves a probable bank failure.
In the United States, equipment financing and leasing operations are subject to rules and regulations relating to health, safety, operations, maintenance, and mechanical standards promulgated by federal and state agencies and industry organizations.
In the United States, equipment financing and leasing operations are subject to rules and regulations relating to health, safety, operations, maintenance, and mechanical standards promulgated by federal and state agencies and industry organizations. In connection with its Rail segment, BancShares’ maintains a wholly owned subsidiary, FC International, Inc.
Pursuant to this requirement, the Parent Company is expected to commit resources to support FCB, including at times when the Parent Company may not be in a financial position to provide such resources.
Under the Dodd-Frank Act, BHCs are required to act as a source of financial strength to their subsidiary banks. Pursuant to this requirement, the Parent Company is expected to commit resources to support FCB, including at times when the Parent Company may not be in a financial position to provide such resources.
These groups play a key role in creating an inclusive workplace culture, striving to attract and retain the best available talent, enriching both associate and customer experiences, and achieving key business objectives. Benefits At BancShares, a strong focus on our associates’ well-being is part of our culture and integral to our total rewards philosophy.
To further these efforts, we support a variety of programs that help create an inclusive workplace culture, attract and retain the best available talent, enrich both associate and customer experiences, and achieve key business objectives. Associate Well-Being At BancShares, a strong focus on our associates’ well-being is part of our culture and integral to our total rewards philosophy.
In 2023, the federal banking agencies proposed a rule to implement the final components of the Basel III accords (the “Basel III Endgame”), which would apply additional capital requirements addressing credit risk, operational risk, and market risk for banking organizations with $100 billion or more in total consolidated assets.
In 2023, the federal banking agencies proposed interagency rules to implement the final components of the Basel III accords (the “Basel III Endgame”), which included additional capital requirements addressing credit risk, operational risk, and market risk, as well as proposed interagency rules for new long term debt and clean holding company requirements for banking organizations with over $100 billion in total consolidated assets.
For further discussion, refer to the “Business Combinations” section of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8. Financial Statements and Supplementary Data, Note 2—Business Combinations. Segments As of December 31, 2023, our reportable segments included the General Bank, the Commercial Bank, Silicon Valley Bank (“SVB”), and Rail segments.
BancShares maintains the Silicon Valley Bank brand as Silicon Valley Bank, a division of FCB. For further discussion, refer to Note 2—Business Combinations of Item 8. Financial Statements and Supplementary Data. Segments As of December 31, 2025, our reportable segments included the General Bank, the Commercial Bank, and Rail.
The two banks larger than FCB based on deposits in both North Carolina and South Carolina were Bank of America and Truist Bank. The additional bank larger than FCB based on deposits in South Carolina was Wells Fargo. These banks collectively held 64.5% and 40.9% of North Carolina and South Carolina deposits, respectively.
The two banks larger than FCB based on deposits in North Carolina were Bank of America and Truist Bank which collectively held 63.1% of North Carolina deposits. The three banks larger than FCB based on deposits in South Carolina were Bank of America, Wells Fargo and Truist Bank which collectively held 39.1% of South Carolina deposits.
We continue to monitor the case and for any appeal by the agencies. In connection with the objectives of the CRA, FCB is currently implementing a community benefits plan that was developed in collaboration with representatives of national, state, and local community reinvestment organizations.
In connection with the objectives of the CRA, FCB oversaw a community benefits plan that was developed in collaboration with representatives of national, state, and local community reinvestment organizations.
Commercial Bank • Provides lending, leasing, capital markets and other financial and advisory services, primarily to small and middle-market companies across a variety of industries. • Provides asset-based lending, factoring, receivables management and secured financing services.
Commercial Bank • Provides lending, leasing, capital markets and other financial and advisory services, primarily to small and middle-market companies across a variety of industries. • Offers a full suite of commercial deposit, liquidity management, and international products to commercial clients. • Provides a full suite of financial products and services to private equity firms, venture capital firms, and commercial clients in innovation markets, such as technology, life sciences and healthcare industries. • Provides asset-based lending, factoring, receivables management and secured financing services.
These factors include the competitive effects of the proposal in the relevant geographic markets; the financial and managerial resources and future prospects of the companies and banks involved in the transaction; the effect of the transaction on the financial stability of the United States; the organizations' compliance with anti-money laundering (“AML”) laws and regulations; the convenience and needs of the communities to be served; and the records of performance under the Community Reinvestment Act (“CRA”) of the IDIs involved in the transaction. 12 In addition, under the FDI Act as amended by the Bank Merger Act (“BMA”), any IDI must also obtain approval of the FDIC before any merger, acquisition or certain similar transactions with another institution if the resulting institution will be a state chartered bank that is not a member of the Federal Reserve System.
These factors include the competitive effects of the proposal in the relevant geographic markets; the financial and managerial resources and future prospects of the companies and banks involved in the transaction; the effect of the transaction on the financial stability of the United States; the organizations' compliance with anti-money laundering (“AML”) laws and regulations; the convenience and needs of the communities to be served; and the records of performance under the Community Reinvestment Act (“CRA”) of the IDIs involved in the transaction.
We continue to monitor and evaluate proposals related to AI regulation and assess their potential impact. 18 Other Regulated Subsidiaries BancShares’ broker-dealer and registered investment adviser subsidiaries are regulated by the SEC and, with respect to broker-dealers, by the Financial Industry Regulatory Authority (“FINRA”).
Other Regulated Subsidiaries BancShares’ broker-dealer and registered investment adviser subsidiaries are regulated by the SEC and, with respect to broker-dealers, by the Financial Industry Regulatory Authority (“FINRA”). The broker-dealer and investment adviser subsidiaries also are subject to additional regulation by states and local jurisdictions.
Corporate (1) • Earning assets primarily include investment securities and interest-earning deposits at banks. • Corporate includes Direct Bank, a nationwide digital bank. • Corporate includes interest income on investment securities and interest-earning deposits at banks; interest expense for borrowings, Direct Bank deposits, and brokered deposits; funds transfer pricing allocations; gains or losses on sales of investment securities; fair value adjustments on marketable equity securities; income from bank-owned life insurance; portions of personnel cost; and acquisition-related expenses.
Corporate (1) • Earning assets primarily include investment securities and interest-earning deposits at banks. • Corporate includes Direct Bank, a nationwide digital bank. • Corporate includes interest income on investment securities and interest-earning deposits at banks; interest expense for borrowings, Direct Bank deposits, and brokered deposits; as well as funds transfer pricing allocations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factors into the following areas, and the principal risks and uncertainties that management believes make an investment in us speculative or risky are summarized within their respective areas: • Strategic Risks: The risk to our current and projected financial condition arising from adverse business decisions, poor implementation, or lack of responsiveness to changes in the industry and operating environment. ▪ We may be adversely affected by risks associated with previous or potential future acquisitions, and any future acquisition may be subject to increased regulatory scrutiny. ▪ We encounter significant competition that may reduce our market share and profitability and our financial performance depends upon our ability to attract and retain customers for our products and services, which may be adversely impacted by weakened consumer or business confidence and by any inability on our part to predict and satisfy customers’ needs and demands. • Operational Risks: The risks of loss resulting from inadequate or failed processes, staffing and systems or from external events. ▪ We face significant operational risks in our businesses and may fail to maintain appropriate operational infrastructure and oversight. ▪ A cyberattack, information or security breach, or a technology outage of ours or of a third-party could adversely affect our ability to conduct our business, manage our exposure to risk, result in the disclosure or misuse of confidential customer or employee data or proprietary information, and increase our costs to maintain and update our operational and security systems and infrastructure.
Biggest changeRisk Factors into the following areas, and the principal risks and uncertainties that management believes make an investment in us speculative or risky are summarized within their respective areas: Strategic Risks ▪ We may be adversely affected by risks associated with previous and future acquisitions, and any future acquisitions may be subject to increased regulatory scrutiny. ▪ We encounter significant competition that may reduce our market share and profitability and our financial performance depends upon our ability to attract and retain customers for our products and services. ▪ Consumers may increasingly decide not to use banks to complete their financial transactions, which could have a material adverse impact on our financial condition and operations. ▪ Certain provisions in our Certificate of Incorporation, Bylaws and certain statutes and regulations and the current composition of our stockholders may make it more difficult for a third party to change our management or acquire control of us, even if stockholders might consider the change in management or change in control to be in their best interests. ▪ Our Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware, or, if such court lacks jurisdiction, the federal district court of the District of Delaware, will be the sole and exclusive forum for substantially all disputes between us and our stockholders.
Our primary competitors include local, regional and national banks; credit unions; commercial finance companies; leasing companies; various wealth management providers; private equity firms; hedge funds; independent and captive insurance agencies; mortgage companies; and other non-bank providers of financial services.
Our primary competitors include local, regional and national banks; credit unions; commercial finance companies; leasing companies; various wealth management providers; private equity firms; private credit providers; hedge funds; independent and captive insurance agencies; mortgage companies; and other non-bank providers of financial services.
Substantial legal claims or significant regulatory action against us or that involve matters for which we have indemnification obligations or other retained liabilities could have material adverse financial effects or cause significant reputational harm to us, which in turn could seriously harm our business prospects.
Substantial or significant legal claims or regulatory action against us or that involve matters for which we have indemnification obligations or other retained liabilities could have material adverse financial effects or cause significant reputational harm to us, which in turn could seriously harm our business prospects.
Our loan approval procedures and our credit risk monitoring may be or become inadequate to appropriately manage the inherent credit risks associated with lending. Our credit administration personnel, policies and procedures may not adequately adapt to changes in economic or other conditions affecting customers and the quality of our loan portfolio.
Our loan approval procedures and credit risk monitoring may be or become inadequate to appropriately manage the inherent credit risks associated with lending. Our credit administration personnel, policies and procedures may not adequately adapt to changes in economic or other conditions affecting customers and the quality of our loan portfolio.
These deposits are subject to fluctuation due to certain factors outside our control, such as increasing competitive pressures for retail or corporate customer deposits, changes in interest rates and returns on other investment classes, or a loss of confidence by customers in us or in the banking sector generally which could result in a significant outflow of deposits within a short period of time, which may have a material adverse effect on our liquidity position.
These deposits are subject to fluctuation due to certain factors outside our control, such as increasing competitive pressures for retail or corporate customer deposits, changes in interest rates and returns on other investment classes, or a loss of confidence by customers in us or in the banking sector generally that could result in a significant outflow of deposits within a short period of time, which may have a material adverse effect on our liquidity position.
ESG matters include, but are not limited to, climate risk, hiring practices, the diversity of our work force, and racial and social justice issues involving our personnel, customers and third parties with whom we otherwise do business. ESG, and particularly Diversity, Equity, and Inclusion (“DEI”), initiatives have become increasingly polarized issues, with strong opponents and proponents.
ESG matters include, but are not limited to, climate risk, hiring practices, the diversity of our work force, and racial and social justice issues involving our personnel, customers and third parties with whom we otherwise do business. ESG, and particularly Diversity, Equity, and Inclusion, initiatives have become increasingly polarized issues, with strong opponents and proponents.
Because we conduct most of our businesses under the “First Citizens” brand, negative public opinion about one business could affect our other businesses. 25 Reputational harm may lead to, among other things, a decline in our deposit balances and an increased risk that we become subject to litigation and regulatory action.
Because we conduct most of our businesses under the “First Citizens” brand, negative public opinion about one business could affect our other businesses. Reputational harm may lead to, among other things, a decline in our deposit balances and an increased risk that we become subject to litigation and regulatory action.
In particular, a significant amount of our business is concentrated in North Carolina, South Carolina, California, Texas, New York, Massachusetts and Florida, including areas where our facilities and retail and commercial customers have been and, in the future, could be impacted by hurricanes and flooding, earthquakes, wildfires, and rising sea levels.
In particular, a significant amount of our business is concentrated in North Carolina, South Carolina, California, Texas, New York, Massachusetts and Florida, including areas where our operational facilities and retail and commercial customers have been and, in the future, could be impacted by hurricanes and flooding, earthquakes, wildfires, and rising sea levels.
Refer to Item 1. Business—Regulatory Considerations for additional information. These laws and others impact, among other things, our operations, taxes, corporate governance, executive compensation and financial accounting and reporting. Compliance with the extensive laws and regulations applicable to BHCs and banks can be difficult and costly.
Refer to Item 1. Business—Regulatory Considerations for additional information. These laws and others impact, among other things, our operations, taxes, corporate governance, executive compensation and financial accounting and reporting. 33 Compliance with the extensive laws and regulations applicable to BHCs and banks can be difficult and costly.
We also compete with banks and other financial services companies for deposits. If competitors raise the rates they pay on deposits, our funding costs may increase, either because we raise rates to avoid losing deposits or because we lose deposits and must rely on more expensive sources of funding.
We compete with banks and other financial services companies for deposits. If competitors raise the rates they pay on deposits, our funding costs may increase, either because we raise rates to avoid losing deposits or because we lose deposits and must rely on more expensive sources of funding.
Also, in connection with the SVBB Acquisition, FCB issued a five-year note of approximately $35 billion payable to the FDIC (the “Purchase Money Note”) due March 2028, which was subsequently amended and restated to adjust the principal amount to approximately $36.07 billion.
In connection with the SVBB Acquisition, FCB issued a five-year note of approximately $35 billion payable to the FDIC (the “Purchase Money Note”) due March 2028, which was subsequently amended and restated to adjust the principal amount to approximately $36.07 billion.
We would also test goodwill for impairment when certain events occur, such as a significant decline in our expected future cash flows, a significant adverse change in the business climate or a sustained decline in the price of our common stock.
We also test goodwill for impairment when certain events occur, such as a significant decline in our expected future cash flows, a significant adverse change in the business climate or a sustained decline in the price of our common stock.
While we maintain access to these non-core funding sources, these sources may be dependent on the availability of collateral as well as the counterparty’s willingness and ability to lend.
While we maintain access to these non-core funding sources, many of these sources may be dependent on the availability of collateral as well as the counterparty’s willingness and ability to lend.
Models may also be used to estimate the value of financial instruments and balance sheet items. Inaccurate or erroneous models present the risk that business decisions relying on the models will prove inefficient, ineffective or harmful to us. Additionally, information we provide to our investors and regulators may be negatively impacted by inaccurately designed or implemented models.
Models may also be used to estimate the value of financial instruments and balance sheet items. Inaccurate or erroneous models present the risk that business decisions relying on the models and their outputs will prove inefficient, ineffective or harmful to us. Additionally, information we provide to our investors and regulators may be negatively impacted by inaccurately designed or implemented models.
As interest rates rise, our interest expense will increase and our net interest margin (“NIM”) may decrease, negatively impacting our performance and our financial condition. To the extent banks and other financial services providers compete for interest-bearing deposit accounts through higher interest rates, our deposit base could be reduced if we are unwilling to pay those higher rates.
Conversely, if interest rates rise, our interest expense will increase and our net interest margin (“NIM”) may decrease, negatively impacting our performance and our financial condition. To the extent banks and other financial services providers compete for interest-bearing deposit accounts through higher interest rates, our deposit base could be reduced if we are unwilling to pay those higher rates.
A cyberattack, information or security breach, or a technology outage of ours or of a third-party could adversely affect our ability to conduct our business, manage our exposure to risk, result in the disclosure or misuse of confidential customer or employee data or proprietary information, and increase our costs to maintain and update our operational and security systems and infrastructure.
A cyberattack, information or security breach, or a technology outage of ours or of a third-party could adversely affect our ability to conduct our business, manage our exposure to risk or result in the disclosure or misuse of confidential customer or employee data or proprietary information, and increase our costs to maintain and enhance our operational and security systems and infrastructure.
Because of the closely interrelated dependencies between us and other financial institutions in a rapidly changing environment, our financial institutions portfolio management practices may not be able to offset the residual credit risk from a counterparty default, and may result in credit losses that may adversely impact our financial condition and results of operations.
Because of the closely interrelated dependencies between us and other financial institutions in a rapidly changing environment, our financial institutions portfolio management practices may not be able to offset the residual credit risk from a counterparty default and may result in credit losses. The foregoing may adversely impact our financial condition and results of operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the audited consolidated financial statements and Notes to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data. 21 Strategic Risks We may be adversely affected by risks associated with previous and future acquisitions, and any future acquisitions may be subject to increased regulatory scrutiny.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the audited consolidated financial statements and Notes to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data. 19 Strategic Risks We may be adversely affected by risks associated with previous and future acquisitions, and any future acquisitions may be subject to increased regulatory scrutiny.
These cyberattacks include computer viruses, malicious or destructive code, ransomware, phishing attacks, denial of service or other security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary or personal data.
These cyberattacks and information or security breaches include computer viruses, malicious or destructive code, ransomware, phishing attacks, denial of service or other security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary or personal data.
For further information on risk monitoring, refer to the “Risk Management” section included in Item 7A. Quantitative and Qualitative Disclosure about Market Risk. We may fail to maintain an effective system of internal control over financial reporting, which could hinder our ability to prevent fraud and provide reliable financial reports to key stakeholders.
For further information on risk monitoring, refer to the “Risk Management” section included in Item 7A. Quantitative and Qualitative Disclosure about Market Risk. We may fail to maintain an effective system of internal control over financial reporting, which, among other things, could hinder our ability to prevent fraud and provide reliable financial reports to key stakeholders.
Natural or man-made disasters (including, but not limited to, earthquakes, hurricanes, tornadoes, floods, tsunamis, fires, pollution, and explosions), global pandemics, acts of war, terrorist activities, climate change or other adverse external events, as well as government actions or other restrictions in connection with such events, could hurt our financial performance (i) directly through damage to our facilities or other impacts to our ability to conduct business in the ordinary course, and (ii) indirectly through such damage or impacts to our customers, suppliers or other counterparties.
Natural or man-made disasters (including, but not limited to, earthquakes, hurricanes, tornadoes, floods, tsunamis, fires, pollution, and explosions), global pandemics, civil unrest, acts of war, terrorist activities, climate change or other adverse external events, including government actions or other restrictions in connection with such events, could hurt our business and financial performance (i) directly through damage to our facilities or other impacts to our ability to conduct business in the ordinary course, and (ii) indirectly through such damage or impacts to our customers, suppliers or other counterparties.
These tests may result in a write-off of goodwill deemed to be impaired, which could have a significant impact on our financial results. 35 The market price of our common stock may be volatile.
These tests may result in a write-off of goodwill deemed to be impaired, which could have a significant adverse impact on our financial results. The market price of our common stock may be volatile.
Sources of reputational risks have included and may in the future include, among others, cyberattacks, legal claims and regulatory action, fraudulent activities aimed at us or parties with whom we do business, inaccurate or incomplete data, insufficient operational infrastructure or oversight, employee misconduct, non-compliance with applicable law or regulatory policies by us or parties with whom we do business, any inability to provide reliable financial reports or maintain effective internal controls, failure of our environmental, social and governance (“ESG”) practices to meet investor or stakeholder expectations, or public perceptions of our business practices, including our deposit pricing and acquisition activity.
Sources of reputational risks have included and may in the future include, among others, cyberattacks, legal claims and regulatory action, fraudulent activities aimed at us or parties with whom we do business, inaccurate or incomplete data, insufficient operational infrastructure or oversight, employee misconduct, non-compliance with applicable law or regulatory policies by us or parties with whom we do business, any inability to provide reliable financial reports or maintain effective internal controls, failure of our ESG practices to meet investor or stakeholder expectations, or public perceptions of our business practices, including our deposit pricing and acquisition activity.
As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our layers of defense or to investigate and remediate any information security vulnerabilities.
As cyber threats continue to evolve, we will be required to expend significant additional resources to continue to modify or enhance our layers of defense or to investigate and remediate any information security vulnerabilities.
As of December 31, 2024, approximately 60% of the outstanding shares of Class B common stock and approximately 20% of the outstanding Class A common stock may be deemed to be beneficially owned or controlled by the Holding family members expected to be identified in the 2025 Proxy Statement as principal stockholders of ours.
As of December 31, 2025, approximately 60% of the outstanding shares of Class B common stock and over 20% of the outstanding Class A common stock may be deemed to be beneficially owned or controlled by the Holding family members expected to be identified in the 2026 Proxy Statement as principal stockholders of ours.
We also do business in Georgia, Virginia, Nebraska, Arizona, New Jersey, Hawaii, Nevada, as well as in Canada and other international locations our clients are domiciled, all of which also include areas significantly exposed to the foregoing risks.
We also do business in Georgia, Virginia, Nebraska, Arizona, New Jersey, Hawaii, Nevada, as well as in Canada and other international locations our clients are domiciled, all of which also include areas significantly exposed to the risks of such events.
In addition, the reserve related to off-balance sheet credit exposures may not be sufficient to cover actual losses, and future provisions for such losses could also materially and adversely affect our operating results and are also subject to significant uncertainties and fluctuations.
The ALLL and the reserve related to off-balance sheet credit exposures may not be sufficient to cover actual losses, and future provisions for such losses could also materially and adversely affect our operating results and are also subject to significant uncertainties and fluctuations.
In addition, checking and savings account balances and other forms of customer deposits may decrease when customers perceive alternative investments, such as the stock market, as providing a better risk/return trade-off. Our bank customers could take their money out of FCB and put it in alternative investments, causing us to lose a lower-cost source of funding.
In addition, checking and savings account balances and other forms of customer deposits may decrease when customers perceive alternative investments as providing a better risk/return trade-off. Our bank customers could take their money out of FCB and put it in alternative investments, causing us to lose a lower-cost source of funding.
As a result of increasing consolidation, interdependence and complexity of financial entities and technology systems, an event that materially degrades, or disrupts systems of one or more financial entities could have a material impact on counterparties or other market participants, including us.
As a result of increasing consolidation, interdependence and complexity of financial entities and technology systems, an event that materially degrades, or disrupts systems of one or more financial entities or related third-parties could have a material impact on counterparties or other market participants, including us.
The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs. The rapid growth of new digital technologies related to the digitization of banking services and capabilities, including through internet services, smart phones and other mobile devices, requires us to continuously evaluate our product and service offerings to ensure they remain competitive.
The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs. The rapid growth of new technologies related to the digitization of banking services and capabilities, including through internet services and mobile devices, requires us to continuously evaluate our product and service offerings to ensure they remain competitive.
We rely on third-party vendors to provide key components of our business infrastructure, and our vendors may be responsible for or contribute to failures that adversely affect our operations. Third party vendors provide key components of our business infrastructure, including certain data processing and information services.
We rely on third-parties to provide key components of our business infrastructure, and our third-parties may be responsible for or contribute to failures that adversely affect our operations. Third-parties provide key components of our business infrastructure, including certain data processing and information services.
Repayment of loans in the innovation banking portfolios for early-stage and mid-stage privately held companies, may depend upon receipt by those borrowers of additional financing from venture capitalists or others, or, in some cases, a successful sale to a third-party, public offering or other form of liquidity event.
Repayment of loans for early-stage and mid-stage privately held companies may depend upon receipt by those borrowers of additional financing from venture capitalists or others, or, in some cases, a successful sale to a third-party, public offering or other form of liquidity event.
We expect that combating fraudulent activities as they evolve will require continued ongoing investments and attention in the future as significant fraud could cause us direct losses for which insurance coverage may not be available, or where available, that exceed insurance limits, result in potential legal actions as a result of operational deficiency or noncompliance with regulatory standards, or impair our customer relationships, among other potential consequences, adversely impacting our reputation or results of operation. 29 Our business and financial performance could be impacted by natural or man-made disasters, global pandemics, acts of war or terrorist activities, climate change or other adverse external events.
We expect that combating fraudulent activities as they evolve will require continued ongoing investments and attention as significant fraud could cause us direct losses for which insurance coverage may not be available, or where available, that exceed insurance limits, result in potential legal actions as a result of operational deficiency or noncompliance with regulatory standards, or impair our customer relationships, among other potential consequences, adversely impacting our reputation or results of operations. 26 Our business and financial performance could be impacted by natural or man-made disasters, global pandemics, civil unrest, acts of war, terrorist activities, climate change or other adverse external events.
CRE loans may involve a higher risk of default compared to our other types of loans as a result of several factors, including, but not limited to, prevailing economic conditions and volatility in real estate markets, occupancy, rental collections, interest rates, and collateral value.
CRE loans may involve a higher risk of default compared to our other types of loans as a result of several factors, including, but not limited to, prevailing economic conditions and volatility in real estate markets, the growth of e-commerce, occupancy, rental collections, interest rates, and collateral value.
As a human capital-intensive business, our success largely depends on our ability to attract, develop, and retain highly skilled and qualified executive officers and management, financial, compliance, technical, operations, risk management, sales, and support employees.
As a human capital-intensive business, our success largely depends on our ability to attract and retain qualified executive officers and management, financial, compliance, technical, operations, risk management, sales, and support employees.
If such events occur, our levels of nonperforming assets and charge-offs may increase, and we may be required to increase our ALLL through additional provisions on our income statement, which would reduce reported net income and could have an adverse effect on our business, financial condition, results of operations and prospects.
If such events occur, our levels of nonperforming assets and charge-offs may increase, and we may be required to increase our ALLL through additional provisions on our income statement, which would reduce reported net income and could have an adverse effect on our business, financial condition, results of operations and prospects. Refer to Part II, Item 7.
There are credit risks inherent in making any loan, including risks of repayment, risks with respect to the period of time over which the loan may be repaid, risks relating to proper loan underwriting and guidelines, risks resulting from changes in economic and industry conditions, risks in dealing with individual borrowers and risks resulting from uncertainties as to the future value of collateral.
There are credit risks inherent in making any loan, including risks relating to repayment, the period of time over which the loan may be repaid, sufficiency of loan underwriting and guidelines, changes in economic and industry conditions, dealing with individual borrowers and uncertainties as to the future value of collateral.
We, as well as our customers, regulators, third-party service providers, and other third parties with whom we do business, have been subject to, and are likely to continue to be the target of, cyberattacks.
We, as well as our customers, regulators, third-party service providers, and other third parties with whom we do business, have been subject to, and are likely to continue to be the target of, cyberattacks and information or security breaches.
Potential sources that could fund voluntary prepayments of the Purchase Money Note or the amount due at maturity include excess liquidity (primarily comprised of interest-earning deposits at banks and proceeds from maturities and paydowns of investment securities), FHLB advances, deposit growth, and issuance of unsecured debt or other borrowings.
Potential sources that we could use to fund voluntary prepayments of the Purchase Money Note or the amount due at maturity include excess liquidity (primarily comprised of interest-earning deposits at banks and proceeds from maturities and paydowns of investment securities), FHLB advances, deposit growth, loan portfolio sales, and issuance of unsecured debt or other borrowings.
This consolidation interconnectivity and complexity increases the risk of operational failure, for both individual and industry-wide bases, as disparate systems need to be integrated, often on an accelerated basis.
This consolidation, interdependence and complexity also increases the risk of operational failure, on both individual and industry-wide bases, as disparate systems need to be integrated, often on an accelerated basis.
Any future change in monetary policy by the Federal Reserve resulting in lower interest rates may negatively impact our performance and financial condition due to the composition of our interest rate sensitive assets and liabilities.
Changes in monetary policy by the Federal Reserve resulting in lower interest rates may negatively impact our performance and financial condition due to the composition of our interest rate sensitive assets and liabilities.
The U.S. debt ceiling and budget deficit concerns in recent years have increased the possibility of U.S. government shutdowns, forced federal spending reductions, debt defaults, credit-rating downgrades and an economic slowdown or recession in the United States. Political tensions may make it difficult for the U.S.
The U.S. debt ceiling and budget deficit concerns in recent years have increased the possibility of U.S. government shutdowns (like the one experienced in the fourth quarter of 2025), forced federal spending reductions, debt defaults, credit-rating downgrades and an economic slowdown or recession in the United States. Political tensions may make it difficult for the U.S.
As a Category IV banking organization, subject to the applicable transition provisions, we are subject to enhanced liquidity risk management requirements that applies to banking organizations with $100 billion or more in total consolidated assets, including reporting, liquidity stress testing, and tailored liquidity risk management requirements.
As a Category IV banking organization, we are subject to enhanced liquidity risk management requirements applicable to banking organizations with $100 billion or more in total consolidated assets, including reporting, liquidity stress testing, and tailored liquidity risk management requirements.
Excluding the impact of liquidity, the market price of our common stock has previously fluctuated and may continue to fluctuate widely in response to other factors, including expectations of financial and operating results, actual operating results, actions of institutional stockholders, speculation in the press or the investment community, market perception of acquisitions, including the CIT Merger and the SVBB Acquisition, rating agency upgrades or downgrades, the anticipated or actual incurrence of additional debt, stock prices of other companies that are similar to us, general market expectations related to the financial services industry, status of an SRP, and the potential impact of government actions affecting the financial services industry.
Excluding the impact of liquidity, the market price of our common stock has previously fluctuated and may continue to fluctuate widely in response to other factors, including expectations of financial and operating results, actual operating results, actions of institutional stockholders, speculation in the press or the investment community, market perception of acquisitions, rating agency upgrades or downgrades, the anticipated or actual incurrence of additional debt, stock prices of other banks, general market expectations related to the financial services industry, status of an SRP, and the potential impact of government actions affecting the financial services industry.
We are exposed to losses related to fraud. As technology continues to evolve, criminals are using increasingly more sophisticated techniques to commit fraud, hide fraudulent activity, and proliferate effective techniques through social media.
As technology continues to evolve, criminals are using increasingly more sophisticated techniques to commit fraud, hide fraudulent activity, and proliferate effective techniques through social media.
Such an event could adversely impact our results of operations, liquidity and financial condition, as well as cause us legal or reputational harm. Our businesses are highly dependent on the security and efficacy of our infrastructure, computer and data management systems, as well as those of third parties with whom we interact or on whom we rely.
Such an event or resource expenditures could adversely impact our results of operations, liquidity and financial condition. Our businesses are highly dependent on the security and efficacy of our infrastructure, computer and data management systems, as well as those of third parties with whom we interact or on whom we rely.
Along with our growth, expectations are heightened to maintain strong risk management. We expect to incur significant expense in continuing to develop systems and controls designed to comply with all such requirements applicable to us.
Business—Regulatory Considerations—Enhanced Prudential Standards. Along with our growth, expectations are heightened to maintain strong risk management. We expect to incur significant expense in continuing to develop systems and controls designed to comply with all such requirements applicable to us.
We are also subject to resolution and contingency planning at the bank-level under the CIDI Rule, as well enhanced enterprise risk management requirements. Refer to Item 1. Business—Regulatory Considerations—Enhanced Prudential Standards for additional information.
We are also subject to resolution and contingency planning at the bank-level under the CIDI Rule, as well enhanced enterprise risk management requirements. Refer to Item 1. Business—Regulatory Considerations—Enhanced Prudential Standards for additional information. As we grow, we may become subject to additional liquidity requirements including the LCR and NSFR requirements. Refer to Item 1.
Certain anti-takeover provisions under Delaware law and certain provisions contained in our Amended and Restated Certificate of Incorporation (our “Certificate of Incorporation) and Amended and Restated Bylaws (our “Bylaws”) could delay or prevent the removal of our directors and other management.
We are a BHC incorporated in the state of Delaware. Certain anti-takeover provisions under Delaware law and certain provisions contained in our Amended and Restated Certificate of Incorporation (our “Certificate of Incorporation) and Amended and Restated Bylaws (our “Bylaws”) could delay or prevent the removal of our directors and other management.
Certain provisions in our Certificate of Incorporation, Bylaws and certain statutes and regulations may make it more difficult for a third party to change our management or acquire control of us, even if stockholders might consider the change in management or change in control to be in their best interests. We are a BHC incorporated in the state of Delaware.
Certain provisions in our Certificate of Incorporation, Bylaws and certain statutes and regulations and the current composition of our stockholders may make it more difficult for a third party to change our management or acquire control of us, even if stockholders might consider the change in management or change in control to be in their best interests.
The soundness and stability of many financial institutions may be closely interrelated as a result of credit, trading, clearing, counterparty and other relationships between the institutions. As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses or defaults by other institutions.
The financial system, including the soundness and stability of many financial institutions, is highly interrelated as a result of credit, trading, clearing, counterparty and other relationships between the institutions. As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses or defaults by us or other institutions.
Consumers and businesses in communities that we serve may change their behavior and preferences because of these issues and new climate change laws and regulations aimed at mitigating climate change.
Consumers and businesses in communities that we serve may change their behavior and preferences because of issues related to climate change and new laws and regulations aimed at mitigating negative effects.
If we fail to develop and maintain at a reasonable cost the systems and processes necessary to comply with the standards and requirements imposed by these rules, it could have a material adverse effect on our business, financial condition or results of operations. 39 We are subject to certain laws and regulations designed to protect consumers in transactions with banks, many of which are enforced by the CFPB through rulemaking and enforcement of the prohibitions against unfair, deceptive and abusive business practices and compliance with such laws and regulations may impact our business operations and profitability.
If we fail to develop and maintain at a reasonable cost the systems and processes necessary to comply with the standards and requirements imposed by these rules, it could have a material adverse effect on our business, financial condition or results of operations. 34 We are subject to certain laws and regulations designed to protect consumers in transactions with financial institutions against unfair, deceptive and abusive business practices and compliance with such laws and regulations and related enforcement actions may impact our business operations and profitability.
In addition to the other limitations described herein, the ability of our bank and its subsidiaries to guarantee our debt may be restricted and certain regulatory requirements may be imposed that may be more restrictive and may result in greater or earlier charges to earnings or reductions in our capital under United States Generally Accepted Accounting Principles (“GAAP”).
In addition to the other limitations described herein, the ability of our bank and its subsidiaries to guarantee our debt may be restricted and certain regulatory requirements may be imposed that may be more restrictive and may result in greater or earlier charges to earnings or reductions in our capital under GAAP.
We will be subject to further requirements as we grow if we meet or exceed certain other thresholds for asset size and other risk-based factors, including those under the federal banking agencies’ Tailoring Rules for banking organizations with $250 billion or more in total consolidated assets. Refer to Item 1. Business—Regulatory Considerations—Enhanced Prudential Standards.
We will be subject to further requirements as we grow if we meet or exceed certain other thresholds for asset size and other risk-based factors, including those under the federal banking agencies’ Tailoring Rules for banking organizations with $250 billion or more in total consolidated assets. Federal banking agencies are also considering further requirements. Refer to Item 1.
Additional risks and uncertainties that are not currently known to management or that management does not currently deem material could also have a material adverse impact on our financial condition, the results of our operations or our business.
The risks and uncertainties that management believes are material to an investment in us are described below. Additional risks and uncertainties that are not currently known to management or that management does not currently deem material could also have a material adverse impact on our financial condition, the results of our operations or our business.
Accounting for acquired assets may result in earnings volatility. Fair value discounts that are recorded at the time an asset is acquired are accreted into interest income based on GAAP. The rate at which those discounts are accreted is unpredictable and the result of various factors including prepayments and estimated credit losses.
Fair value discounts that are recorded at the time an asset is acquired are accreted into interest income based on United States Generally Accepted Accounting Principles (“GAAP”). The rate at which those discounts are accreted is unpredictable and the result of various factors including prepayments and estimated credit losses, which may result in earnings volatility.
Any failure to manage such credit risks may materially adversely affect our business, consolidated results of operations and financial condition because it may lead to loans that we make not being paid back in part or in full on a timely basis or at all. 31 Our allowance for credit losses may prove to be insufficient to absorb losses in our credit portfolios.
Any failure to manage such credit risks may materially adversely affect our business, results of operations and financial condition because it may lead to loans that we make not being paid back in part or in full on a timely basis or at all.
In addition, decreases in the amount of equity capital available to early-stage and mid-stage companies, including through a decrease in merger and acquisition activity, could adversely impact the ability of borrowers to repay our loans in these industries.
Decreases in the amount of equity capital available to early-stage and mid-stage companies, including through a decrease in merger and acquisition activity, could adversely impact the ability of certain borrowers to repay their loans to us.
In circumstances where our ability to generate needed liquidity is impaired, we may need to access other sources of funding such as borrowings from the FHLBs and the Federal Reserve, federal funds purchased lines, and brokered deposits, or other sources of liquidity including capital markets.
In circumstances where our ability to generate needed liquidity is impaired, we may need to access other sources of funding such as borrowings from the FHLBs and the Federal Reserve, federal funds purchased lines, brokered deposits, or other sources of liquidity including capital market transactions such as securities sold under agreements to repurchase and sale of securities.
We employ data security and technology solutions to support adherence to our data protection obligations and risk mitigation efforts. The collection, sharing, use, disclosure, and protection of these types of information are governed by federal and state law.
We collect, process, maintain, and store personal information of customers, prospects and employees, and employ data security and technology solutions to support adherence to our data protection obligations and risk mitigation efforts. The collection, sharing, use, disclosure, and protection of these types of information are governed by federal and state law.
Congress and federal regulators have also implemented or are considering implementing similar laws or regulations which could create new individual privacy rights and impose increased obligations on companies handling personal data. Refer to Item 1. Business—Regulatory Considerations—Privacy, Data Protection, and Cybersecurity for additional information.
An increasing number of states have actual or proposed privacy and information security regulations. The U.S. Congress and federal regulators have also implemented or are considering implementing similar laws or regulations which could create new individual privacy rights and impose increased obligations on companies handling personal data. Refer to Item 1. Business—Regulatory Considerations—Privacy, Data Protection, and Cybersecurity for additional information.
These changes, if implemented and taken as a whole, appear unprecedented and may have impacts on the economy as a whole or different regions or segments of the economy or asset classes which are difficult to predict at this time.
These changes may have differing impacts on the economy as a whole or different regions or segments of the economy or asset classes which are difficult to predict at this time.
Our results of operations and cash flows are highly dependent upon net interest income (“NII”). Interest rates are highly sensitive to many factors that are beyond our control, including general economic and market conditions and policies of various governmental and regulatory agencies, particularly the actions of the Federal Reserve’s Federal Open Market Committee (“FOMC”).
Interest rates are highly sensitive to many factors that are beyond our control, including general economic and market conditions and policies of various governmental and regulatory agencies, particularly the actions of the Federal Reserve’s Federal Open Market Committee (“FOMC”).
Some of our larger competitors, including certain banks with a significant presence in our market areas, have the capacity to offer products and services we do not offer, which may enable them to be more aggressive than us in competing for loans and deposits.
Some of our larger competitors have the capacity to offer products and services we do not offer, which may enable them to be more aggressive than us in competing for loans and deposits.
In addition, such penetration or circumvention could result in a violation of applicable data privacy and protection laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in our security measures, reputational damage, reimbursement or other compensatory costs and additional compliance costs.
In addition, such penetration or circumvention could result in a violation of applicable data privacy and protection laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in our security measures, reputational damage, reimbursement or other compensatory costs and additional compliance costs and insurance coverage may not be available for such losses or, where available, such losses may exceed insurance limits.
Failure to develop and maintain adequate systems and controls designed to comply with all requirements applicable to us under current regulations or as otherwise imposed by our regulators may lead to regulatory and compliance risks, including adverse regulatory action (including possible restrictions on our activities), along with inadequate liquidity.
Business—Regulatory Considerations—Enhanced Prudential Standards—Category III Requirements. Failure to develop and maintain adequate systems and controls designed to comply with all requirements applicable to us under current regulations or as otherwise imposed by our regulators could result in regulatory and compliance risks, including adverse regulatory action (including possible restrictions on our activities), along with inadequate liquidity.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees or agents, which may discourage lawsuits against us and our directors, officers and other employees or agents. 24 There is some uncertainty as to whether a court would enforce our exclusive forum provisions.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees or agents, which may discourage lawsuits against us and our directors, officers and other employees or agents.
Deposit insurance premiums levied against banks, including FCB, may increase if the number of bank failures increase or the cost of resolving failed banks increases. The FDIC maintains the DIF to protect insured depositors in the event of bank failures. The DIF is funded by insurance premiums assessed on IDIs including FCB.
Deposit insurance premiums levied on banks, including FCB, may increase if there is an increase in the number of bank failures, the cost of resolving failed banks, or the FDIC deposit insurance coverage limit. The FDIC maintains the DIF to protect insured depositors in the event of bank failures.
In addition, the high interest rate environment has increased costs on our other funding sources, and may continue to do so, in the event we may need to issue debt. 34 Unfavorable economic conditions, as considered through a range of metrics, have and could continue to adversely affect our business.
In addition, the high interest rate environment has increased costs on our other funding sources, and may continue to do so, in the event we issue additional debt or utilize other funding sources. 30 Unfavorable economic conditions, as considered through a range of metrics, have and could continue to adversely affect our financial condition, results of operations and cash flows.
In the course of our business, we may foreclose on and take title to real estate that contains or was used in the manufacture or processing of hazardous materials or that is subject to other environmental risks.
The outcomes of such cases are always uncertain until finally adjudicated or resolved. 25 In the course of our business, we may foreclose on and take title to real estate that contains or was used in the manufacture or processing of hazardous materials or that is subject to other environmental risks.
In addition, our ability to access the capital markets may be impacted by unforeseen market forces or interruptions or a lack of market or customer confidence in us or in the banking sector generally.
In addition, our ability to access the capital markets may be impacted by unforeseen market forces or interruptions or a lack of market or customer confidence in us or in the banking sector generally. Inability to access sources of liquidity may affect our ability to pay withdrawals by depositors and fund our operations.
If we fail to meet regulatory guidelines, including enhanced capital adequacy, liquidity, stress testing, and capital planning requirements, or are subject to certain other legal limitations, our financial condition and ability to pay dividends or make other payments could be adversely affected.
Rating reductions could adversely affect our access to funding sources and increase the cost of obtaining funding. 32 If we fail to meet regulatory requirements, including enhanced capital adequacy, liquidity, stress testing, and capital planning requirements, or are subject to certain other legal limitations, our financial condition and ability to pay dividends or make other payments could be adversely affected.
Their services could be difficult to quickly replace in the event of failure or other interruption in service. Failures of certain vendors to provide services could adversely affect our ability to deliver products and services to our customers leading to non-compliance with regulatory requirements.
Their services could be difficult to quickly replace in the event of failure or other interruption in service. Failures of certain third-parties to provide services could adversely affect our ability to deliver products and services to our customers leading to non-compliance with regulatory requirements. Third-parties also present information security risks to us, both directly and indirectly through our customers.
Our business is highly quantitative and requires widespread use of financial models for day-to-day operations; these models may produce inaccurate predictions that significantly vary from actual results, and we may rely on these inaccurate predictions in making decisions that ultimately adversely affect our business. We rely on qualitative and quantitative models to measure risks and to estimate certain financial values.
Our business is highly quantitative and requires widespread use of financial models for day-to-day operations; these models may produce inaccurate predictions that significantly vary from actual results, and we may rely on them in making decisions that adversely affect our business or the information we provide to our investors and regulators.
Such climate change-related measures may also result in the imposition of taxes and fees, the required purchase of emission credits or the implementation of significant operational changes, each of which may require us to expend significant capital and incur compliance, operating, maintenance and remediation costs.
Monitoring and complying with changing regulatory climate requirements may increase compliance costs and could result in the imposition of taxes and fees, the required purchase of emission credits or the implementation of significant operational changes, each of which may require us to expend significant capital and incur compliance, operating, maintenance and remediation costs.
The Parent Company and FCB are subject to bank capital rules under the Basel III framework, in addition to other capital adequacy requirements, liquidity requirements, and capital planning and stress testing requirements.
Regulators have implemented and may, from time to time, implement changes to these regulatory capital adequacy and liquidity requirements. The Parent Company and FCB are subject to bank capital rules under the Basel III framework, in addition to other capital adequacy requirements, liquidity requirements, and capital planning and stress testing requirements.
Attracting and retaining key talent is of heightened importance due to the significant expansion of the size, geographic reach and operational scope of our business that occurred in connection with the CIT Merger and SVBB Acquisition. We face significant competition in the recruitment of qualified executive officers and employees.
Attracting and retaining key employees is of heightened importance due to the significant expansion of the size, geographic reach and operational scope of our business that has occurred in connection with merger and acquisition transactions.
Operational risk can arise in numerous ways, including, but not limited to, employee fraud, customer fraud, control lapses in bank operations and information technology, and pace of change brought about by organizational growth.
Safely conducting and growing our business requires that we create and maintain an appropriate operational and organizational control infrastructure. Operational risk can arise in numerous ways, including, but not limited to, employee fraud, customer fraud, control lapses in bank operations and information technology, and pace of change brought about by organizational growth.
The loss of these revenue streams and the lower cost deposits as a source of funds could have a material adverse effect on our financial condition and results of operations. 23 Our financial performance is subject to risks associated with the loss of customer confidence and demand.
The loss of these revenue streams and the lower cost deposits as a source of funds could have a material adverse effect on our financial condition and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe CISO is responsible for assessing and managing material cyber risks. The CISO’s expertise with assessing and managing material cyber risks is based on more than 20 years of cybersecurity experience with prior roles as a CISO and Global Head of Operations.
Biggest changeThe CISO’s expertise with managing cybersecurity operations, security engineering, architecture and design, threat hunting/intelligence and insider threat programs is based on more than 14 years of cybersecurity experience with prior roles as head of cyber operations at LFIs as well as over 20 years spent testing and maturing cyber programs in a variety of security roles.
Management Committees, which include as members the CISO and other cybersecurity leadership, have clear lines of communication with the Board and its committees. The Management Committees are designed with a purpose-driven scope and decision-making authority and are required to provide the Board with regular reporting of management’s business activities and the potential risk associated with those activities.
Management-level committees (“Management Committees”), which include as members the CISO and other cybersecurity leadership, have clear lines of communication with the Board and its committees. The Management Committees are designed with a purpose-driven scope and decision-making authority and are required to provide the Board with regular reporting of management’s business activities and the potential risk associated with those activities.
Thus far, there have been no cybersecurity incidents that we have determined to have materially affected or to be reasonably likely to materially affect us, including with respect to our business, results of operations, or financial condition. The focus continues to be on monitoring the threat landscape and integration of entities.
Thus far, there have been no cybersecurity incidents that we have determined to have materially affected or to be reasonably likely to materially affect us, including with respect to our business, results of operations, or financial condition. The focus continues to be on monitoring the threat landscape and integration of entities, and enhancing our cybersecurity posture and capabilities.
The CISO is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity by the ECSO through regular reporting and escalations, as required. The CIOO, the CISO, and others, report information about material risks from cybersecurity threats to the Board or a committee or subcommittee of the Board, as described below.
The CISO is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity events by ECSO through regular reporting and escalations, as required. The CIOO, the CISO, and others, report information about material risks from cybersecurity threats to the Board or a committee or subcommittee of the Board.
Additionally, the Risk Committee reviews BancShares’ information security policy and program with a focus on whether they are appropriate to protect data, records, and proprietary information of BancShares as well as that of its customers and employees. 44
Additionally, the Technology Committee reviews BancShares’ information security policy and program with a focus on whether they are appropriate to protect the data, records, and proprietary information of BancShares as well as that of its customers and employees.
Within ECSO, the Cyber Security Operation Center identifies, assesses, monitors, and manages potential cybersecurity events in coordination with the Enterprise Incident Management (“EIM”) team, escalating analysis and response to incidents and events in accordance with established procedures and the Enterprise Severity Matrix.
Within ECSO, the Cyber Security Operation Center identifies, assesses, monitors, and manages potential cybersecurity events in coordination with the Enterprise Technology Enterprise Incident Management (“EIM”) team, escalating incidents and events to EIM in accordance with established procedures and the Enterprise Severity Matrix.
Governance The Board retains supervisory oversight responsibility for the organization and its activities, including enterprise risk management and cybersecurity risks. The Board conducts oversight of management through board committees, presentations from senior leadership, and routine Board-directed reporting to ensure management continues to operate and conduct business in alignment with Risk Appetite Statements.
Governance The Board has oversight responsibility for the organization and its activities, including enterprise risk management and cybersecurity risks. The Board conducts oversight of management through board committees, presentations from senior leadership, and routine Board-directed reporting to ensure management continues to operate and conduct business in alignment with BancShares’ Risk Appetite Statement.
In addition, the Audit Committee of the Board monitors internal audit’s coverage of cybersecurity governance, risks, and related controls, including any identified deficiencies, that could adversely affect the ability to record, process, summarize, and report financial data. The Risk Committee coordinates with the Audit Committee for review of information security matters, as needed.
In addition, the Audit Committee of the Board monitors internal audit’s coverage of cybersecurity governance, risks, and related controls, including any identified deficiencies that could adversely affect the ability to record, process, summarize, and report financial data.
In addition, BancShares maintains a third-party risk management team tasked with identifying, evaluating, and managing risk posed by all third-party engagements, including from cybersecurity threats. The second-line independent risk management, including compliance, enterprise risk management, and operational risk management, works with the first line ECSO to evaluate, assess, and manage material risks using an established Risk Appetite Framework.
In addition, BancShares maintains a third-party risk management team tasked with managing risk posed by third-party engagements, including from cybersecurity threats. Second-line independent risk management, including compliance, enterprise risk management, and operational risk management, works with the first line to manage material risks in accordance with BancShares’ Risk Appetite Policy.
Under the Three Lines Model, the ECSO, led by our Chief Information Security Officer (the “CISO”), acts as a first line of defense and has primary responsibility for identifying, assessing, monitoring, and managing material risks from cybersecurity threats. Our CISO reports to our Chief Information and Operations Officer (“CIOO”), who reports directly to our Chief Executive Officer.
Under the Three Lines Model, our Enterprise Cyber Security Office (“ECSO”), led by our Chief Information Security Officer (the “CISO”), acts as a first line of defense and has primary responsibility for identifying, assessing, monitoring, and managing material risks from cybersecurity threats.
BancShares maintains processes for reporting and escalation from each line of defense through management to senior leadership, to management-level committees, and to committees of the Board and the Board, as appropriate. Reporting includes top and emerging risks, and other operational risk metrics. BancShares follows a defense-in-depth and layered-control framework to protect the organization against cybersecurity threats and attacks.
BancShares maintains processes for reporting and escalation from each line of defense through management to senior leadership, to management-level committees, to committees of the Board and to the Board, as appropriate. Reporting includes top and emerging risks and other operational risk metrics.
The BancShares information security program continues to operate under heightened awareness due to industry threats and recent acquisitions. For more information regarding the risks we face from cybersecurity threats, refer to Item 1A. Risk Factors.
Consultants also assess BancShares’ cybersecurity systems and perform vulnerability testing to identify control gaps and improvement opportunities. The BancShares information security program continues to operate under heightened awareness due to industry threats and recent acquisitions. For more information regarding the risks we face from cybersecurity threats, refer to Item 1A. Risk Factors.
The Risk Committee receives information on cybersecurity risk, including risk appetite utilization, breaches and emerging risks, and the control environment, directly or indirectly, from various sources, including the CIOO, CISO, and each of the Management Committees.
The Technology Committee receives information on cybersecurity risk, including risk appetite thresholds, breaches and emerging risks, and the control environment, from various sources, including the CIOO, CISO, second-line independent risk management, and internal audit.
This mission is supported by policy, standards, and procedures which align to industry frameworks, including the National Institute of Standards and Technology Cybersecurity Framework, and are executed through the firm’s preventive and detective controls. 43 BancShares has implemented a threat awareness program that includes cross-organizational information sharing capabilities for threat intelligence and membership and engagement with intelligence communities, including but not limited to, the Financial Services Information Sharing and Analysis Center, the Financial Services Sector Coordinating Council, the Federal Bureau of Investigation, and the U.S.
BancShares has implemented a threat awareness program that includes cross-organizational information sharing capabilities for threat intelligence and membership and engagement with intelligence communities, including but not limited to, the Financial Services Information Sharing and Analysis Center, the Financial Services Sector Coordinating Council, the Federal Bureau of Investigation, and the U.S. Department of Homeland Security.
Department of Homeland Security. BancShares also utilizes external experts and third-party assessors to maximize its risk intelligence coverage and to enhance risk detection and remediation. BancShares engages internal auditors, external assessors, and consultants to benchmark, scale, manage, and identify cybersecurity threats. Consultants also assess BancShares’ cybersecurity systems and complete vulnerability testing.
BancShares also utilizes external experts and third-party assessors to maximize its risk intelligence coverage and to enhance risk detection and remediation capabilities. BancShares engages internal audit, external assessors, and consultants to independently assess, benchmark, and support scaling of its cybersecurity risk management and detection capabilities.
Item 1C. Cybersecurity Risk Management and Strategy BancShares maintains robust processes for assessing, identifying, and managing material risks from cybersecurity threats that are integrated with our overall risk management program. As part of its cybersecurity risk management framework, BancShares leverages a Three Lines of Defense model (the “Three Lines Model”) to promote clarity of roles and responsibilities in managing risk.
As part of its cybersecurity risk management framework, BancShares leverages a Three Lines of Defense model (the “Three Lines Model”) to promote clarity of roles and responsibilities in managing risk.
ECSO remains committed to maintaining and improving preventative and detective controls and enhancing our defenses in response to the evolving threat landscape.
BancShares follows a defense-in-depth strategy implemented through a layered control framework to protect the organization against cybersecurity threats and attacks. ECSO remains committed to maintaining and improving preventative and detective controls and enhancing our defenses in response to the evolving threat landscape.
The Risk Appetite Framework requires the cybersecurity organization to document the current risk landscape and the activities undertaken to mitigate risk that exceeds enterprise risk tolerance. The third-line in the Three Lines Model is our internal audit team, which assesses the effectiveness of related controls.
The Risk Appetite Policy requires the first line to annually document and align business strategies and key indicators with risk appetite thresholds. The third-line in the Three Lines Model is our internal audit team, which provides independent assurance that enterprise cybersecurity controls are designed appropriately and operating effectively.
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Oversight of cybersecurity and the ECSO organization is the responsibility of the Risk Committee.
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Item 1C. Cybersecurity Risk Management and Strategy BancShares maintains a robust framework for identifying, assessing, monitoring, and managing material risks from cybersecurity threats, integrating processes and controls within our overall risk management program.
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The Risk Committee oversees cybersecurity and other risks through reporting from management, including the Enterprise Risk Oversight Committee (“EROC”), as well as additional management-level subcommittees beneath the Risk Committee including the Technology & Security Risk Committee (“TSRC”) and the Operational Risk Committee (“ORC” and, together with the EROC and TSRC, the “Management Committees”).
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Our CISO reports to our Chief Information and Operations Officer (“CIOO”), who reports directly to our Chief Executive Officer.
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Management Committees are informed by EIM following the incident management process as per internal policies and standards. The Board may from time to time create informal working groups to enable deeper and more detailed discussions related to our technology needs and investments and inform the Board on cybersecurity risks, among other topics.
Added
This mission is supported by policy, standards, and procedures which align to industry frameworks, including the National Institute of Standards and Technology Cybersecurity Framework.
Added
Additionally, the Board receives regular reports from the respective board committees and regular program updates. 37 Board oversight of cybersecurity and the ECSO organization is delegated to the Technology Committee of the Board. The Technology Committee oversees cybersecurity and other risks through reporting from management and regular program updates.
Added
The Risk Committee of the Board is responsible for our operational risk management, including oversight of the operation of our risk management framework and its application to cybersecurity and other categories of operational risk.
Added
Management Committees are informed by EIM following the incident management process. The CISO is responsible for assessing and managing material cyber risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe addition of SVBB in 2023 and CIT in 2022 primarily increased leased space, as both occupied office space and a branch network. As of December 31, 2024, FCB operated more than 500 branches and offices throughout the United States. FCB owns many of our branch buildings and leases other facilities from third parties.
Biggest changeAs of December 31, 2025, FCB operated more than 500 branches and offices throughout the United States. FCB owns many of our branch buildings and leases other facilities from third parties. We believe that these properties are in good condition, are well maintained, and are suitable and adequate for our business needs.
Additional information relating to leased office space is set forth in Note 6—Leases and additional information relating to premises and equipment is set forth in Note 7—Premises and Equipment of the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data.
Additional information relating to leased office space is set forth in Note 7—Leases and additional information relating to premises and equipment is set forth in Note 8—Premises and Equipment of the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data.
Item 2. Properties We are headquartered in a nine-story building with approximately 163,000 square feet that is located in Raleigh, North Carolina, which is owned by FCB. In addition, FCB owns and occupies two separate facilities in Raleigh as well as a facility in Columbia, South Carolina, which serve as data and operations centers.
Item 2. Properties We are headquartered in a nine-story building with approximately 163,000 square feet that is located in Raleigh, North Carolina, which is owned by FCB. FCB also owns and occupies two separate facilities in Raleigh as well as a facility in Columbia, South Carolina, which serve as data or operations centers.
Removed
We believe that these properties are in good condition, are well maintained, and are suitable and adequate for our business needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough the amount of any ultimate liability with respect to those matters cannot be determined, in the opinion of management, no legal actions currently exist that would be material to BancShares’ consolidated financial statements. Additional information relating to legal proceedings is set forth in Note 23—Commitments and Contingencies of the Notes to Consolidated Financial Statements contained in Item 8.
Biggest changeItem 3. Legal Proceedings. Information relating to legal proceedings is set forth in Note 22—Commitments and Contingencies of the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data, and is incorporated herein by reference. 38 PART II—OTHER INFORMATION Item 5.
Removed
Item 3. Legal Proceedings. The Parent Company and certain of its subsidiaries are named as defendants in various legal actions arising from our normal business activities in which damages in various amounts were claimed.
Added
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Parent Company has two classes of common stock—Class A and Class B common stock. Shares of Class A common stock have one vote per share, while shares of Class B common stock have 16 votes per share.
Removed
Financial Statements and Supplementary Data. 45 PART II
Added
The Class A common stock is listed on the Nasdaq Global Select Market under the symbol FCNCA. The Class B common stock is traded on the over-the-counter market and quoted on the OTC Pink Market under the symbol FCNCB.
Added
As of February 13, 2026, there were 838 and 115 holders of record with respect to the Class A common stock and Class B common stock, respectively. The market volume for Class B common stock is extremely limited. On many days there is no trading and, to the extent there is trading, it is generally low volume.
Added
Over-the-counter market quotations for the Parent Company’s Class B common stock represent inter-dealer prices without retail markup, markdown or commissions, and may not represent actual transaction prices. The average monthly trading volume for the Class A common stock was 2,250,289 shares during the fourth quarter of 2025 and 2,160,372 shares for the year ended December 31, 2025.
Added
The Class B common stock monthly trading volume averaged 1,503 shares during the fourth quarter of 2025 and 1,861 shares for the year ended December 31, 2025.
Added
On July 25, 2025, BancShares announced that the Board authorized a new share repurchase program (the “2025 SRP”), which allows BancShares to repurchase shares of its Class A common stock in an aggregate amount up to $4.0 billion through December 31, 2026.
Added
Repurchases under the 2025 SRP commenced in September 2025 upon the completion of the $3.5 billion share repurchase program announced in July 2024 (the “2024 SRP”). During 2025, BancShares repurchased approximately $3.03 billion of its Class A common stock in aggregate under the 2024 SRP and the 2025 SRP.
Added
The total capacity remaining under the 2025 SRP was $2.81 billion as of December 31, 2025. During the fourth quarter of 2025, we repurchased 479,470 shares of our Class A common stock for approximately $900 million and paid a dividend of $2.10 per share on our Class A and Class B common stock.
Added
Shares repurchased during the fourth quarter of 2025 represented 4.13% of Class A common stock and 3.80% of total Class A and Class B common stock outstanding at September 30, 2025.
Added
From inception of the 2024 SRP and 2025 SRP through December 31, 2025, we have repurchased 2,393,103 shares of our Class A common stock for approximately $4.69 billion, representing 17.69% of Class A common stock and 16.47% of total Class A and Class B common stock outstanding as of June 30, 2024.
Added
From January 1, 2026 through February 13, 2026, BancShares repurchased additional shares of Class A common stock for a total of $443 million and has total capacity remaining under the 2025 SRP of $2.37 billion as of February 13, 2026.
Added
Under the 2025 SRP, shares of BancShares’ Class A common stock may be purchased from time to time on the open market or in privately negotiated transactions, including through a Rule 10b5-1 plan, but the Board’s action does not obligate BancShares to repurchase any minimum or particular number of shares, and repurchases may be suspended or discontinued at any time (subject to the terms of any Rule 10b5-1 plan in effect) without prior notice.
Added
The following table summarizes our monthly Class A common stock repurchase activity during the fourth quarter of 2025.
Added
Issuer Repurchases of Class A Common Stock dollars in millions, except per share data Total Number of Class A Shares Purchased Average Price Paid per Share Total Number of Shares Repurchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet be Purchased Under Plan Repurchases from October 1 - 31, 2025 183,077 $ 1,757.16 183,077 $ 3,389 Repurchases from November 1 - 30, 2025 146,134 1,834.03 146,134 3,121 Repurchases from December 1 - 31, 2025 150,259 2,065.04 150,259 2,811 Total 479,470 $ 1,877.07 479,470 $ 2,811 39 The graph and table below compare the cumulative total shareholder return (“CTSR”) of our Class A common stock to selected industry and broad-market indices.
Added
The broad-market index comparison is to the Nasdaq US Benchmark Total Return Index and the industry index comparison is to the KBW Nasdaq Bank Total Return Index, which includes banking stocks representing large U.S. national money centers, regional banks and thrift institutions. Each trend line assumes $100 was invested on December 31, 2020, and dividends were reinvested for additional shares.
Added
The performance graph represents past performance and should not be considered to be an indication of future performance. 2020 2021 2022 2023 2024 2025 FCNCA $ 100 $ 145 $ 133 $ 248 $ 371 $ 378 Nasdaq US Benchmark Total Return Index 100 126 101 128 159 187 KBW Nasdaq Bank Total Return Index 100 138 109 108 148 196

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnder the authorized SRP, shares of BancShares’ Class A common stock may be purchased from time to time on the open market or in privately negotiated transactions, including through a Rule 10b5-1 plan, but the Board’s action does not obligate BancShares to repurchase any minimum or particular number of shares, and repurchases may be suspended or discontinued at any time (subject to the terms of any Rule 10b5-1 plan in effect) without prior notice.
Biggest changeBancShares’ 2025 SRP allows BancShares to repurchase shares of its Class A common stock through 2026. BancShares is not obligated under the 2025 SRP to repurchase any minimum or particular number of shares, and repurchases may be suspended or discontinued at any time (subject to the terms of any Rule 10b5-1 plan in effect) without prior notice.
Removed
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Parent Company has two classes of common stock—Class A and Class B common stock. Shares of Class A common stock have one vote per share, while shares of Class B common stock have 16 votes per share.
Added
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities for fourth quarter 2025 monthly repurchase activity. The following table summarizes the change in outstanding Class A common stock through December 31, 2025. Refer to Note 15—Stockholders' Equity for additional information.
Removed
The Class A common stock is listed on the Nasdaq Global Select Market under the symbol FCNCA. The Class B common stock is traded on the over-the-counter market and quoted on the OTC Pink Market under the symbol FCNCB.
Added
Table 50 Changes in Shares of Class A Common Stock Outstanding Year Ended December 31, 2025 Class A common stock shares outstanding at beginning of period 12,712,436 Shares repurchased under authorized repurchase plan (1,578,462) Class A common stock shares outstanding at end of period 11,133,974 We also had 1,005,185 Class B common stock outstanding at December 31, 2025 and December 31, 2024.
Removed
As of February 14, 2025, there were 906 and 128 holders of record with respect to the Class A common stock and Class B common stock, respectively. The market volume for Class B common stock is extremely limited. On many days there is no trading and, to the extent there is trading, it is generally low volume.
Added
We are committed to effectively managing our capital to protect our depositors, creditors and stockholders. We continually monitor the capital levels and ratios for BancShares and FCB to ensure they exceed the minimum requirements imposed by regulatory authorities and to ensure they are appropriate given growth projections, risk profile and potential changes in the regulatory or external environment.
Removed
Over-the-counter market quotations for BancShares Class B common stock represent inter-dealer prices without retail markup, markdown or commissions, and may not represent actual transaction prices. The average monthly trading volume for the Class A common stock was 1,881,852 shares during the fourth quarter of 2024 and 1,832,633 shares for the year ended December 31, 2024.
Added
Failure to meet certain capital requirements may result in actions by regulatory agencies that could have a material impact on our operations or consolidated financial statements. In accordance with GAAP, the unrealized gains and losses on certain assets and liabilities, net of deferred taxes, are included in AOCI within stockholders’ equity.
Removed
The Class B common stock monthly trading volume averaged 2,296 shares during the fourth quarter of 2024 and 2,411 shares for the year ended December 31, 2024.
Added
These amounts are excluded from the calculation of our Regulatory Capital Ratios under current regulatory guidelines. 83 Table 51 Analysis of Capital Adequacy dollars in millions Basel III Requirements PCA Well Capitalized Thresholds December 31, 2025 December 31, 2024 Amount Ratio Amount Ratio Adjusted Ratio (1) BancShares Risk-based capital ratios Total risk-based capital 10.50 % 10.00 % $ 24,945 13.71 % $ 24,610 15.04 % 14.27 % Tier 1 risk-based capital 8.50 8.00 21,660 11.91 22,137 13.53 12.84 Common equity Tier 1 7.00 6.50 20,285 11.15 21,256 12.99 12.33 Tier 1 leverage ratio 4.00 5.00 21,660 9.29 22,137 9.90 n/a (2) FCB Risk-based capital ratios Total risk-based capital 10.50 % 10.00 % $ 24,739 13.62 % $ 23,975 14.66 % 13.91 % Tier 1 risk-based capital 8.50 8.00 22,796 12.55 21,852 13.37 12.68 Common equity Tier 1 7.00 6.50 22,796 12.55 21,852 13.37 12.68 Tier 1 leverage ratio 4.00 5.00 22,796 9.79 21,852 9.78 n/a (2) (1) Adjusted capital ratios exclude the impact of the FDIC Shared-Loss Agreement and are considered non-GAAP measures.
Removed
On July 25, 2024, BancShares announced that the Board authorized an SRP, which allows BancShares to repurchase shares of its Class A common stock in an aggregate amount up to $3.50 billion through December 31, 2025.
Added
Refer to the “Non-GAAP Financial Measurements” section of this MD&A for a reconciliation from the most comparable GAAP measure to the non-GAAP measure. (2) The adjusted tier 1 leverage ratio is not applicable because the FDIC Shared-Loss Agreement did not impact the tier 1 leverage ratio.
Removed
During the fourth quarter of 2024, we repurchased 461,583 shares of our Class A common stock for $963 million and paid a dividend of $1.95 per share on our Class A and Class B common stock.
Added
A s of December 31, 2025, BancShares and FCB had total risk-based capital ratio conservation buffers of 5.71% and 5.62%, respectively, which are in excess of the Basel III conservation buffer of 2.50%. As of December 31, 2024, BancShares and FCB’s total risk-based capital ratio conservation buffers were 7.04% and 6.66%, respectively.
Removed
Shares repurchased during the fourth quarter of 2024 represented 3.50% of Class A common shares and 3.26% of total Class A and Class B common shares outstanding at September 30, 2024.
Added
The capital ratio conservation buffers represent the excess of the regulatory capital ratios as of December 31, 2025 and December 31, 2024 over the Basel III minimum for the applicable ratio. Additional Tier 1 capital for BancShares includes perpetual preferred stock. Additional Tier 2 capital for BancShares and FCB primarily consists of qualifying ALLL and qualifying subordinated debt.
Removed
From inception of the SRP through December 31, 2024, we have repurchased 814,641 shares of our Class A common stock for $1.66 billion, representing 6.02% of Class A common shares and 5.61% of total Class A and Class B common shares outstanding as of June 30, 2024.
Added
Refer to Note 17—Regulatory Capital for additional information. Termination of the Shared-Loss Agreement with the FDIC FCB and the FDIC entered into the Shared-Loss Termination Agreement on April 7, 2025 (the “Shared-Loss Termination Date”) as further discussed in the “Executive Overview—Recent Events” section of this MD&A.
Removed
The total capacity remaining under the SRP was $1.84 billion as of December 31, 2024. Subsequent to December 31, 2024, BancShares purchased an additional 140,373 shares of Class A common stock through February 14, 2025. The following table summarizes our monthly Class A common stock repurchase activity during the fourth quarter of 2024.
Added
The risk-based capital ratios of FCB and BancShares for periods in which the Shared-Loss Agreement (as defined in Note 2—Business Combinations) was effective were calculated using favorable RWA assumptions permissible for Covered Assets (as defined in Note 2—Business Combinations).
Removed
Issuer Repurchases of Class A Common Stock dollars in millions, except per share data Total Number of Class A Shares Purchased Average Price Paid per Share Total Number of Shares Repurchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet be Purchased Under Plan Repurchases from October 1 - 31, 2024 189,709 $ 1,974.90 189,709 $ 2,425 Repurchases from November 1 - 30, 2024 129,796 2,191.22 129,796 2,141 Repurchases from December 1 - 31, 2024 142,078 2,139.11 142,078 1,837 Total 461,583 $ 2,086.30 461,583 $ 1,837 46 The graph and table below compare the cumulative total shareholder return (“CTSR”) of our Class A common stock to selected industry and broad-market indices.
Added
After the Shared-Loss Termination Date, FCB and BancShares are not permitted to apply the favorable RWA assumptions to assets that were previously Covered Assets. As of December 31, 2024, the table above presents risk-based capital ratios (which include the impact of the Shared-Loss Agreement) and adjusted ratios (which exclude the impact of the Shared-Loss Agreement).
Removed
The broad-market index comparison is to the Nasdaq US Benchmark Total Return Index and the industry index comparison is to the KBW Nasdaq Bank Total Return Index, which includes banking stocks representing large U.S. national money centers, regional banks and thrift institutions. Each trend line assumes $100 was invested on December 31, 2019, and dividends were reinvested for additional shares.
Added
Refer to the “Non-GAAP Financial Measurements” section of this MD&A for further discussion. CRITICAL ACCOUNTING ESTIMATES The accounting and reporting policies of BancShares are in accordance with GAAP and are described in Note 1—Significant Accounting Policies and Basis of Presentation.
Removed
The performance graph represents past performance and should not be considered to be an indication of future performance. 2019 2020 2021 2022 2023 2024 FCNCA $ 100 $ 108 $ 157 $ 144 $ 268 $ 400 Nasdaq US Benchmark Total Return Index 100 121 153 123 155 193 KBW Nasdaq Bank Total Return Index 100 90 124 98 97 133
Added
The preparation of financial statements in conformity with GAAP requires us to exercise judgment in determining many of the estimates and assumptions utilized to arrive at the carrying value of assets and liabilities and amounts reported for revenues and expenses. Our financial condition and results of operations could be materially affected by changes to these estimates and assumptions.
Added
We consider accounting estimates to be critical to reported financial results if (i) the accounting estimate requires management to make assumptions about matters that are highly uncertain and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on our financial statements.
Added
The accounting estimate related to the determination of the ALLL is considered to be a critical accounting estimate because considerable judgment and estimation is applied by management. 84 ALLL The ALLL represents management’s best estimate of credit losses expected over the life of the loan or lease, adjusted for expected contractual payments and the impact of prepayment expectations.
Added
Estimates for loan and lease losses are determined by analyzing quantitative and qualitative components present as of the evaluation date.
Added
The ALLL is calculated based on a variety of considerations, including, but not limited to actual net loss history of the various loan and lease pools, delinquency trends, changes in forecasted economic conditions, loan growth, estimated loan life, and changes in portfolio credit quality.
Added
Loans and leases are segregated into pools with similar risk characteristics and each have a model that is utilized to estimate the ALLL.
Added
Macroeconomic Forecasts Utilized in the Estimate of the ALLL While management utilizes its best judgment and information available, the ultimate adequacy of our ALLL is dependent upon a variety of factors beyond our control which are inherently difficult to predict, the most significant being the macroeconomic scenario forecasts that determine the economic variables, including the U.S. unemployment rate, U.S. real GDP, home price index (“HPI”), and CRE price index utilized in the ALLL models.
Added
These economic variables are based on macroeconomic scenario forecasts with a forecast horizon that covers the reasonable and supportable period. Due to the inherent uncertainty in the macroeconomic forecasts, BancShares utilizes baseline, upside, and downside macroeconomic scenarios and probability weights the scenarios based on review of variable forecasts for each scenario and comparison to expectations.
Added
The potential impacts of new trade, tariff and other economic policies in the United States were more prevalently reflected in the baseline macroeconomic scenario, which resulted in a modest shift in our weighting from the downside to baseline economic scenario in the second quarter of 2025. The scenario weighting at December 31, 2025 was unchanged since the second quarter shift.
Added
At December 31, 2025, ALLL estimates ranged from approximately $1.33 billion, when weighing the upside scenario 100%, to approximately $1.98 billion when weighting the downside scenario 100%. BancShares management determined that an ALLL of $1.57 billion was appropriate as of December 31, 2025.
Added
The following table presents the U.S. unemployment rate, U.S. real GDP, HPI, and CRE price index based on the weighted-average scenario forecasts used in determining the ALLL at December 31, 2025 and December 31, 2024. The projected trends in the macroeconomic variables below may fluctuate depending on the underlying scenarios and our scenario weighting assumptions utilized for the applicable period.
Added
Table 52 Select Variables in ALLL Weighted-average Scenarios Assumptions as of December 31, 2025 2026 2027 2028 U.S. unemployment rate (1) 5.2 % 5.4 % 5.1 % U.S. real GDP (2) 1.5 % 1.6 % 2.0 % HPI (2) (1.4) % 2.2 % 3.5 % CRE price index (2) (3.4) % (1.6) % 4.1 % Assumptions as of December 31, 2024 2025 2026 2027 U.S. unemployment rate (1) 5.0 % 5.1 % 4.7 % U.S. real GDP (2) 1.4 % 1.7 % 2.3 % HPI (2) (1.3) % 2.0 % 2.8 % CRE price index (2) (3.6) % 0.4 % 8.8 % (1) Assumptions as of December 31, 2025 represent the projected quarterly averages for the years ending December 31, 2026, 2027, and 2028.
Added
Assumptions as of December 31, 2024 represent the projected quarterly averages for the years ending December 31, 2025, 2026, and 2027. (2) Represents the projected year-over-year percent changes.
Added
Qualitative Component of the ALLL ALLL model outputs may be adjusted through a qualitative assessment to reflect trends that may not be adequately reflected within the models, which could include economic conditions, uncertainty in macroeconomic forecasts, credit quality, risk to specific industry concentrations, and any significant policy and underwriting changes.
Added
These qualitative adjustments are also used to accommodate for the imprecision of certain assumptions and uncertainties inherent in the model calculations. 85 Current economic conditions and forecasts can change which could affect the anticipated amount of estimated credit losses and therefore the appropriateness of the ALLL.
Added
It is difficult to estimate how potential changes in any one economic factor or input might affect the overall ALLL because a wide variety of factors and inputs are considered in estimating the ALLL and changes in those factors and inputs considered may not occur at the same rate and may not be consistent across all product types.
Added
Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others. Accounting policies related to the ALLL are discussed in Note 1—Significant Accounting Policies and Basis of Presentation.
Added
For more information regarding the ALLL, refer to the “Risk Management—Credit Risk— ALLL” section of this MD&A and Note 6—Allowance for Loan and Lease Losses.
Added
RECENT ACCOUNTING PRONOUNCEMENTS BancShares adopted the following FASB Accounting Standards Updates (“ASUs”) as of January 1, 2026: ASU Summary Effective Date and Expected Impact ASU 2025-08—Financial Instruments — Credit Losses (Topic 326): Purchased Loans Issued November 2025 Under this ASU, purchased seasoned loans (“PSLs” as described below) must be recognized at the purchase price, plus the ALLL at the acquisition date (the “Gross-Up Approach”).
Added
Since the ALLL at the acquisition date is established through the Gross-Up Approach, there is no corresponding increase to the provision for credit losses (“Day 2 Provision for Loan and Lease Losses”).
Added
Prior to this ASU, the Gross-Up Approach was only permitted for PCD loans, while the initial ALLL for Non-PCD loans was established through the Day 2 Provision for Loan and Lease Losses.
Added
Under this ASU, the Gross-Up Approach applies to PCD loans and the following Non-PCD loans which qualify as PSLs: (i) non-credit card loans acquired in a business combination and (ii) non-credit card loans purchased more than 90 days after origination in a non-business combination transaction, provided the acquirer was not involved in the original lending.
Added
This ASU specifically excludes credit card loans from the definition of PSLs. This ASU is effective for annual and interim periods beginning after December 15, 2026. Early adoption is permitted as of the beginning of an interim or annual reporting period. This ASU must be applied prospectively. We early adopted this ASU on January 1, 2026 (the “Adoption Date”).
Added
We are currently evaluating the impact of this ASU on our consolidated financial statements and disclosures. For business combinations or loan acquisitions that close after the Adoption Date, this ASU could reduce the Day 2 Provision for Loan and Lease Losses, and the subsequent credit-related loan PAA that was prevalent for Non-PCD loans acquired prior the Adoption Date.
Added
ASU 2025-05—Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets Issued July 2025 This ASU provides an optional practical expedient which permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when estimating the ALLL for accounts receivable.
Added
This ASU is effective for annual and interim reporting periods beginning after December 15, 2025. We adopted this ASU as of January 1, 2026.
Added
We did not elect the optional practical expedient and adoption of this ASU did not impact our consolidated financial statements and disclosures. 86 The following ASUs issued by the FASB have not been adopted BancShares as of January 1, 2026: ASU Summary Effective Date and Expected Impact ASU 2024-03—Income Statement—Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses Issued November 2024 This ASU enhances expense disclosures, primarily by requiring footnote disaggregation of specified expenses in a tabular format.
Added
This ASU does not change the requirements for the presentation of expenses on the consolidated statements of income. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. This ASU may be applied prospectively or retrospectively.
Added
We are currently evaluating the impact of this ASU on our notes to the consolidated financial statements. We do not plan to early adopt this ASU. ASU 2025-06—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software Issued September 2025 This ASU amends certain aspects of the accounting for internal-use software.
Added
This ASU eliminated references to software development stages, which were previously determinants of whether internal-use software costs should be capitalized. This ASU also provided more specific criteria to assess when determining whether internal-use software costs should be capitalized. This ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.
Added
Early adoption is permitted as of the beginning of an annual reporting period. This ASU may be applied using either a prospective, retrospective, or modified transition approach. We are currently evaluating the impact of this ASU on our consolidated financial statements.
Added
We do not plan to early adopt this ASU on January 1, 2026, but are considering whether we may early adopt on January 1, 2027. ASU 2025-09—Derivatives and Hedging (Topic 815)—Hedge Accounting Improvements Issued November 2025 This ASU clarified certain aspects of hedge accounting to better reflect the economics of risk management activities.
Added
For example, this ASU eliminated the requirement that a group of interest payments be based on the same index in order to be hedged as a group, and provided more flexibility for grouping transactions with similar risks for cash flow hedges.
Added
This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted on any date on or after the issuance date of this ASU. Entities are required to apply this ASU on a prospective basis for all hedging relationships.
Added
We are currently evaluating the impact of this ASU on our consolidated financial statements and considering whether we may early adopt during 2026. NON-GAAP FINANCIAL MEASUREMENTS BancShares provides certain non-GAAP information in reporting its financial results to give investors additional data to evaluate its operations.
Added
A non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance or financial position that may either exclude or include amounts, or is adjusted in some way to the effect of including or excluding amounts, as compared to the most directly comparable measure calculated and presented in accordance with GAAP financial statements.
Added
BancShares’ management believes that non-GAAP financial measures, when reviewed in conjunction with GAAP financial information, can provide transparency about, or an alternate means of assessing, its operating results and financial position to its investors, analysts and management.
Added
These non-GAAP measures should be considered in addition to, and not superior to or a substitute for, GAAP measures presented in BancShares’ consolidated financial statements and other publicly filed reports. In addition, our non-GAAP measures may be different from or inconsistent with non-GAAP financial measures used by other institutions.
Added
Whenever we refer to a non-GAAP financial measure we will generally define and present the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation between the GAAP financial measure and the non-GAAP financial measure.
Added
We describe each of these measures below and explain why we believe the measure to be useful. 87 Net Rental Income on Operating Lease Equipment for Commercial Bank and Rail Segments Commercial Bank segment net income, rental income on operating lease equipment, and net rental income on operating lease equipment are utilized to measure profitability.
Added
Net rental income on operating lease equipment is a non-GAAP measure calculated as rental income on operating lease equipment less depreciation on operating lease equipment, as well as maintenance and other operating lease expenses, if any. This measure is meaningful because it enables management to monitor the performance and profitability of operating leases after deducting direct expenses.
Added
The following tables reconcile the most comparable GAAP measures to the non-GAAP measures for the Commercial Bank and Rail segments.
Added
Table 53 Commercial Bank Segment dollars in millions Year Ended December 31, 2025 2024 2023 Rental income on operating leases (GAAP) $ 219 $ 227 $ 231 Less: depreciation on operating lease equipment 175 185 179 Net rental income on operating lease equipment (non-GAAP) $ 44 $ 42 $ 52 Rail segment net income, rental income on operating lease equipment and net rental income on operating lease equipment are utilized to measure profitability.
Added
Net rental income on operating lease equipment is calculated as rental income on operating lease equipment reduced by depreciation, maintenance and other operating lease expenses. This measure is meaningful because it enables management to monitor the performance and profitability of operating leases after deducting direct expenses.
Added
Due to the nature of the Rail segment portfolio, which is essentially all operating lease equipment, certain financial measures commonly used by banks, such as NII, are not as meaningful for the Rail segment. NII is not used because it includes the impact of debt costs funding our operating lease assets but excludes the associated net rental income.
Added
Table 54 Rail Segment dollars in millions Year Ended December 31, 2025 2024 2023 Rental income on operating leases (GAAP) $ 877 $ 821 $ 740 Less: depreciation on operating lease equipment 223 209 192 Less: maintenance and other operating lease expenses 244 219 222 Net rental income on operating lease equipment (non-GAAP) $ 410 $ 393 $ 326 88 NII, NIM, and Interest Income on Loans and Leases, Excluding PAA NII and NIM, excluding PAA, and interest income on loans and leases, excluding loan PAA are meaningful metrics as they allow management to analyze NII, NIM and loan and lease interest income trends more directly related to the rates of the underlying interest-earning assets and interest-bearing liabilities.
Added
Loan PAA is primarily related to the loan discount in the SVBB Acquisition. Other PAA is primarily related to the discount on the Purchase Money Note and the premium on deposits assumed in the merger with CIT Group Inc.
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The following table reconciles NII to NII, excluding PAA, NIM to NIM, excluding PAA, and interest income on loans and leases to interest income on loans and leases, excluding loan PAA: Table 55 NII, NIM, and Interest Income on Loans and Leases, Excluding PAA dollars in millions Year Ended December 31, 2025 2024 2023 NII (GAAP) a $ 6,814 $ 7,143 $ 6,712 Loan PAA b 289 505 733 Other PAA c (38) (24) 7 PAA d = (b+c) 251 481 740 NII, excluding PAA (non-GAAP) e = (a-d) $ 6,563 $ 6,662 $ 5,972 Average interest-earning assets f $ 209,658 $ 201,578 $ 170,771 NIM (GAAP) a/f 3.25 % 3.54 % 3.92 % NIM, excluding PAA (non-GAAP) e/f 3.13 3.30 3.50 Interest income on loans and leases (GAAP) $ 9,096 $ 9,528 $ 8,187 Less: loan PAA b 289 505 733 Interest income on loans and leases, excluding loan PAA (non-GAAP) $ 8,807 $ 9,023 $ 7,454 89 Adjusted Risk-Based Capital Ratios FCB and the FDIC entered into the Shared-Loss Termination Agreement on April 7, 2025, after which time FCB and BancShares were no longer permitted to apply favorable RWA assumptions to the Covered Assets.
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Adjusted risk-based capital ratios exclude the favorable RWA assumptions related to the Shared-Loss Agreement. Adjusted risk-based capital ratios as of December 31, 2024 are meaningful metrics for comparison to risk-based capital ratios as of December 31, 2025 (which exclude the impacts of the Shared-Loss Agreement as a result of the Shared-Loss Termination Agreement).
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Refer to the “Capital” section of this MD&A for further discussion.
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The following table reconciles the Shared-Loss Agreement impact to the total risk-based, CET1 and tier 1 capital ratios of BancShares and FCB: Table 56 Adjusted Risk-Based Capital Ratios December 31, 2024 BancShares FCB Risk-weighted assets (GAAP) a $ 163,615 $ 163,493 Plus: impact of FDIC Shared-Loss Agreement 8,813 8,813 Adjusted risk-weighted assets (non-GAAP) b $ 172,428 $ 172,306 Total Risk-Based Capital Ratio Total risk-based capital c $ 24,610 $ 23,975 Total risk-based capital ratio (GAAP) c/a 15.04 % 14.66 % Less: impact of FDIC Shared-Loss Agreement 0.77 0.75 Adjusted total risk-based capital ratio (non-GAAP) c/b 14.27 % 13.91 % CET1 Capital Ratio CET1 capital d $ 21,256 $ 21,852 CET1 capital ratio (GAAP) d/a 12.99 % 13.37 % Less: impact of FDIC Shared-Loss Agreement 0.66 0.69 Adjusted CET1 capital ratio (non-GAAP) d/b 12.33 % 12.68 % Tier 1 Risk-Based Capital Ratio Tier 1 risk-based capital e $ 22,137 $ 21,852 Tier 1 risk-based capital ratio (GAAP) e/a 13.53 % 13.37 % Less: impact of FDIC Shared-Loss Agreement 0.69 0.69 Adjusted tier 1 risk-based capital ratio (non-GAAP) e/b 12.84 % 12.68 % 90 Forward-Looking Statements Statements in this Annual Report on Form 10-K contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans, asset quality, future performance, and other strategic goals of BancShares.
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Words such as “anticipates,” “believes,” “estimates,” “expects,” “predicts,” “forecasts,” “intends,” “plans,” “projects,” “targets,” “designed,” “could,” “may,” “should,” “will,” “potential,” “continue,” “aims,” “strives” or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on BancShares’ current expectations and assumptions regarding BancShares’ business, the economy, and other future conditions.
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Because forward-looking statements relate to future results and occurrences, they are subject to inherent risks, uncertainties, changes in circumstances and other factors that are difficult to predict.
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Many possible events or factors could affect BancShares’ future financial results and performance and could cause actual results, performance or achievements of BancShares to differ materially from any anticipated results expressed or implied by such forward-looking statements.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

166 edited+140 added−196 removed22 unchanged
Biggest changeOur ALLL methodology is discussed further in the section entitled “Critical Accounting Estimates” of this MD&A and Note 1—Significant Accounting Policies and Basis of Presentation. 76 Table 29 ALLL for Loans and Leases dollars in millions Year Ended December 31, 2024 Commercial Consumer SVB Total Balance at beginning of period $ 1,126 $ 166 $ 455 $ 1,747 Total provision for loan and lease losses 298 8 163 469 Charge-offs (407) (30) (220) (657) Recoveries 46 14 57 117 Balance at end of period $ 1,063 $ 158 $ 455 $ 1,676 Net charge-off ratio 0.39 % Net charge-offs $ 361 $ 16 $ 163 $ 540 Average loans $ 137,456 Percent of loans in each category to total loans 51 % 20 % 29 % 100 % Year Ended December 31, 2023 Commercial Consumer SVB Total Balance at beginning of period $ 789 $ 133 $ — $ 922 Initial PCD ALLL 14 3 203 220 Day 2 Provision for Loan and Lease Losses 39 43 380 462 Provision for loan and lease losses 651 2 50 703 Total provision for loan and lease losses 690 45 430 1,165 Charge-offs (414) (28) (196) (638) Recoveries 47 13 18 78 Balance at end of period $ 1,126 $ 166 $ 455 $ 1,747 Net charge-off ratio 0.47 % Net charge-offs $ 367 $ 15 $ 178 $ 560 Average loans $ 119,176 Percent of loans in each category to total loans 50 % 21 % 29 % 100 % Year Ended December 31, 2022 Commercial Consumer SVB Total Balance at beginning of period $ 80 $ 98 $ — $ 178 Initial PCD ALLL 258 14 — 272 Day 2 Provision for Loan and Lease Losses 432 22 — 454 Provision (benefit) for loan and lease losses 101 (4) — 97 Total provision for loan and lease losses 533 18 — 551 Charge-offs (126) (20) — (146) Recoveries 44 23 — 67 Balance at end of period $ 789 $ 133 $ — $ 922 Net charge-off ratio 0.12 % Net charge-offs (recoveries) $ 82 $ (3) $ — $ 79 Average loans $ 67,730 Percent of loans in each category to total loans 76 % 24 % — % 100 % Net charge-offs during the Current Year were $540 million, a decrease of $20 million from $560 million during the Prior Year.
Biggest changeTable 32 ALLL dollars in millions Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 Commercial Consumer Total Commercial Consumer Total Commercial Consumer Total Balance at beginning of period $ 1,518 $ 158 $ 1,676 $ 1,581 $ 166 $ 1,747 $ 789 $ 133 $ 922 Initial PCD ALLL — — — — — — 217 3 220 Day 2 Provision for Loan and Lease Losses — — — — — — 419 43 462 Provision (benefit) for loan and lease losses 538 (8) 530 461 8 469 701 2 703 Total provision (benefit) for loan and lease losses 538 (8) 530 461 8 469 1,120 45 1,165 Charge-offs (708) (33) (741) (627) (30) (657) (610) (28) (638) Recoveries 88 13 101 103 14 117 65 13 78 Balance at end of period $ 1,436 $ 130 $ 1,566 $ 1,518 $ 158 $ 1,676 $ 1,581 $ 166 $ 1,747 Net charge-off ratio 0.45 % 0.39 % 0.47 % Net charge-offs $ 620 $ 20 $ 640 $ 524 $ 16 $ 540 $ 545 $ 15 $ 560 Average loans $ 143,110 $ 137,456 $ 119,176 Percent of loans in each category to total loans 81 % 19 % 100 % 80 % 20 % 100 % 79 % 21 % 100 % The ALLL was $1.57 billion at December 31, 2025, compared to $1.68 billion at December 31, 2024, resulting in an ALLL reserve release of $110 million in the current year, mainly driven by loan growth concentrated in capital call lines which have a lower loss rate relative to our other loan portfolios, elimination of the reserves related to Hurricane Helene, a modest shift in our weighting from the downside to baseline economic scenario (as further discussed in the “Critical Accounting Estimates” section of this MD&A), improvements in the economic outlook and credit quality, and lower specific reserves for individually evaluated loans.
At a high level, demand for equipment is correlated with Gross Domestic Product growth trends for the markets the equipment serves, as well as the more immediate conditions of those markets. Cyclicality in the economy and shifts in trade flows due to specific events represent risks to the earnings that can be realized by these businesses.
At a high level, demand for equipment is correlated with gross domestic product (“GDP”) growth trends for the markets the equipment serves, as well as the more immediate conditions of those markets. Cyclicality in the economy and shifts in trade flows due to specific events represent risks to the earnings that can be realized by these businesses.
We establish risk metrics and evaluate and manage the counterparty risk associated with these derivative instruments in accordance with the comprehensive Risk Management Framework and Risk Appetite Framework and Statement. Counterparty credit exposure or counterparty risk is a primary risk of derivative instruments, relating to the ability of a counterparty to perform its financial obligations under the derivative contract.
We establish risk metrics and evaluate and manage the counterparty risk associated with these derivative instruments in accordance with the comprehensive Risk Management Framework and Risk Appetite Policy and Statement. Counterparty credit exposure or counterparty risk is a primary risk of derivative instruments, relating to the ability of a counterparty to perform its financial obligations under the derivative contract.
Changes in NII due to changes in (i) volume (average balances of interest-earning assets and interest-bearing liabilities) and (ii) yields or rates are based on the following: • The change in NII due to volume is calculated as the change in average balance multiplied by the yield or rate from the prior period. • The change in NII due to yield or rate is calculated as the change in yield or rate multiplied by the average balance from the prior period. • The change in NII due to changes in both volume and yield or rate (i.e., portfolio mix) is calculated as the change in rate multiplied by the change in volume.
Changes in interest income and expense due to changes in (i) volume (average balances of interest-earning assets and interest-bearing liabilities) and (ii) yields or rates are based on the following: • The change in NII due to volume is calculated as the change in average balance multiplied by the yield or rate from the prior period. • The change in NII due to yield or rate is calculated as the change in yield or rate multiplied by the average balance from the prior period. • The change in NII due to changes in both volume and yield or rate (i.e., portfolio mix) is calculated as the change in rate multiplied by the change in volume.
On a periodic basis, we evaluate our income tax positions based on current tax law and positions taken by various tax auditors within the jurisdictions where BancShares is required to file income tax returns, as well as potential or pending audits or assessments by tax auditors. Refer to Note 20—Income Taxes for additional information.
On a periodic basis, we evaluate our income tax positions based on current tax law and positions taken by various tax auditors within the jurisdictions where BancShares is required to file income tax returns, as well as potential or pending audits or assessments by tax auditors. Refer to Note 19—Income Taxes for additional information.
The composition of our interest rate sensitive assets and liabilities generally results in a net asset-sensitive position for NII Sensitivity, whereby our assets will reprice faster than our liabilities. A component of our interest rate risk management strategy is the use of derivative instruments to manage fluctuations in earnings caused by changes in market interest rates.
The composition of our interest rate sensitive assets and liabilities generally results in a net asset-sensitive position for NII Sensitivity, whereby our assets will reprice faster than our liabilities. A component of our interest rate risk management strategy is the use of derivative instruments to mitigate fluctuations in earnings caused by changes in market interest rates.
Through the comprehensive Risk Management Framework and Risk Appetite Framework and Statement, senior management has primary responsibility for day-to-day management of the risks we face with accountability of and support from all associates. Senior management applies various strategies to reduce the risks to which BancShares may be exposed, with effective challenge and oversight by management committees.
Through the comprehensive Risk Management Framework and Risk Appetite Policy and Statement, senior management has primary responsibility for day-to-day management of the risks we face with accountability of and support from all associates. Senior management applies various strategies to reduce the risks to which BancShares may be exposed, with effective challenge by independent risk management and oversight by Management Committees.
Although certain amounts for prior years have been reclassified to conform with financial statement presentations for 2024, the reclassifications had no effect on stockholders’ equity or net income as previously reported. Refer to Note 1—Significant Accounting Policies and Basis of Presentation.
Although certain amounts for prior years have been reclassified to conform with financial statement presentations for 2025, the reclassifications had no effect on stockholders’ equity or net income as previously reported. Refer to Note 1—Significant Accounting Policies and Basis of Presentation.
Our ALLL estimate as of December 31, 2024 included extensive reviews of the changes in credit risk associated with the uncertainties around macroeconomic forecasts. These loss estimates consider industry risk and the actual net losses incurred during prior periods of economic stress as well as recent credit trends.
Our ALLL estimate as of December 31, 2025 included extensive reviews of the changes in credit risk associated with the uncertainties around macroeconomic forecasts. These loss estimates consider industry risk and the actual net losses incurred during prior periods of economic stress as well as recent credit trends.
Our exposure to NII Sensitivity is guided by the Risk Appetite Framework and Statement and a range of risk metrics and BancShares may utilize tools across the balance sheet to adjust its interest rate risk exposures, including through business line actions and actions within the investment, funding and derivative portfolios.
Our exposure to NII Sensitivity is guided by the Risk Appetite Policy and Statement and a range of risk metrics, and BancShares may utilize tools across the balance sheet to adjust its interest rate risk exposures, including through business line actions and actions within the investment, funding and derivative portfolios.
As of December 31, 2024, BancShares continues to have an asset sensitive interest rate risk profile and the potential exposure to forecasted earnings was largely due to the composition of the balance sheet (primarily due to floating rate commercial loans and cash), as well as estimates of modest future deposit betas.
As of December 31, 2025, BancShares continues to have an asset sensitive interest rate risk profile and the potential exposure to forecasted earnings was largely due to the composition of the balance sheet (primarily due to floating rate commercial loans and cash), as well as estimates of modest future deposit betas.
Stress tests are performed for various risks to ensure the financial institution can support continued operations during stressed periods. BancShares monitors and stress tests its capital and liquidity consistent with the safety and soundness expectations of the federal regulators. Refer to the “Regulatory Considerations” section of Item 1. Business included in this Annual Report on Form 10-K for further discussion.
Stress tests are performed for various risks to ensure the financial institution can support continued operations during stressed periods. BancShares monitors and stress tests its capital and liquidity consistent with the safety and soundness expectations of the federal regulators. Refer to the “Regulatory Considerations” section of Item 1. Business included in this Form 10-K for further discussion.
Loans and leases we originate are underwritten in accordance with our credit policies and procedures and are subject to periodic ongoing reviews. Acquired loans, regardless of whether PCD or Non-PCD, are recorded at fair value as of the acquisition date and are subject to periodic reviews to identify any further credit deterioration.
Loans and leases we originate are underwritten in accordance with our credit policies and procedures and are subject to periodic ongoing reviews. Acquired loans, regardless of whether purchased credit deteriorated (“PCD”) or Non-PCD, are recorded at fair value as of the acquisition date and are subject to periodic reviews to identify any further credit deterioration.
FDIC Credit Facility FCB and the FDIC entered into the Advance Facility Agreement, dated as of March 27, 2023, and effective as of November 20, 2023, providing total advances available through March 27, 2025 of up to $70 billion (subject to the limits described below) solely to provide liquidity to offset deposit withdrawal or runoff of former SVBB deposit accounts and to fund the unfunded commercial lending commitments acquired in the SVBB Acquisition.
FDIC Credit Facility FCB and the FDIC entered into the Advance Facility Agreement, dated as of March 27, 2023, and effective as of November 20, 2023, providing total advances available through March 27, 2025 of up to $70 billion solely to provide liquidity to offset deposit withdrawal or runoff of former SVBB deposit accounts and to fund the unfunded commercial lending commitments acquired in the SVBB Acquisition.
Treasury and the Supranational Entities & Multilateral Development Banks, and the long history of no credit losses on debt securities issued by government agencies and government sponsored entities, we determined that no allowance for credit loss was required for investment securities held to maturity at December 31, 2024. 69 The following table presents the investment securities portfolio, segregated by major category: Table 21 Investment Securities dollars in millions December 31, 2024 December 31, 2023 December 31, 2022 Composition (1) Amortized Cost Fair Value Composition (1) Amortized Cost Fair Value Composition (1) Amortized Cost Fair Value Investment securities available for sale: U.S.
Treasury and the Supranational Entities & Multilateral Development Banks, and the long history of no credit losses on debt securities issued by government agencies and government sponsored entities, we determined that no allowance for credit loss was required for investment securities held to maturity at December 31, 2025. 61 The following table presents the investment securities portfolio, segregated by major category: Table 21 Investment Securities dollars in millions December 31, 2025 December 31, 2024 Amortized Cost Fair Value Composition (1) Amortized Cost Fair Value Composition (1) Investment securities available for sale: U.S.
Comparisons of the financial data as of and for the years ended December 31, 2023 and 2022 are contained in Item 7.
Comparisons of the financial data as of and for the years ended December 31, 2024 and 2023 are contained in Item 7.
These amounts are recognized over the requisite service period, if any. Professional fees mainly include consulting, legal and accounting costs associated with business combinations and the related integration, optimization, and business process reengineering, including enhancements to technology. These amounts are expensed as incurred.
These amounts are recognized over the requisite service period, if any. Acquisition-related professional fees mainly include consulting, legal and accounting costs associated with business combinations and the related integration, optimization, and business process reengineering, including enhancements to technology.
Approximately 64% of our loans have floating contractual reference rates, indexed primarily to SOFR and the U.S. prime rate. Deposit betas are currently modeled to have a portfolio average of approximately 35%-45% over the twelve-month forecast horizon, including 50%-60% for interest-bearing non-maturity deposits.
Approximately 65% of our loans have floating contractual reference rates, indexed primarily to SOFR and the U.S. prime rate. Deposit betas are currently modeled to have a portfolio average of approximately 35%-40% over the twelve-month forecast horizon, including 50%-55% for interest-bearing non-maturity deposits.
Our strategic priorities center around the themes summarized below. • Client Focus ▪ Expand and grow our capabilities and products while harnessing the scale of the enterprise and maintaining a client-first focus. • Talent and Culture ▪ Attract, retain and develop associates who align with our long-term direction and culture while scaling for continued growth. • Operational Efficiency ▪ Enhance processes and systems to reduce organizational complexity and maximize productivity. ▪ Continue to streamline systems to simplify our information technology operating environment and improve our data infrastructure. • Balance Sheet Optimization ▪ Manage our balance sheet prudently to optimize our funding and liquidity profile while driving core deposit growth and enhancing returns. 48 Recent Events Share Repurchase Program On July 25, 2024, BancShares announced that the Board authorized an SRP, which allows BancShares to repurchase shares of its Class A common stock in an aggregate amount up to $3.50 billion through 2025.
Our strategic priorities center around the themes summarized below. • Client Focus ▪ Expand and grow our capabilities and products while harnessing the scale of the enterprise and maintaining a client-first focus. • Talent and Culture ▪ Attract, retain and develop associates who align with our long-term direction and culture while scaling for continued growth. • Operational Efficiency ▪ Optimize processes and systems to reduce organizational complexity and maximize productivity. ▪ Continue to streamline systems to simplify our information technology operating environment and improve our data infrastructure. • Balance Sheet Optimization ▪ Manage our balance sheet prudently to optimize our funding and liquidity profile while driving core deposit growth and enhancing returns. 41 Recent Events Equity Transactions Share Repurchase Programs On July 25, 2025, BancShares announced that the Board authorized the 2025 SRP, which allows BancShares to repurchase shares of its Class A common stock in an aggregate amount up to $4.0 billion through December 31, 2026.
At the time of voluntary prepayment or maturity, the interest rates for the potential interest-bearing sources of repayment could be higher than the 3.50% rate on the Purchase Money Note. Refer to the respective “Deposits” and “Borrowings” discussions in the “Interest-bearing Liabilities” section of this MD&A for further details. The Purchase Money Note is discussed further in Note 2—Business Combinations.
At the time of any further voluntary prepayment or maturity, the interest rates for the potential interest-bearing sources of prepayment could be higher than the 3.50% rate. Refer to the respective “Deposits” and “Borrowings” discussions in the “Balance Sheet Analysis—Interest-bearing Liabilities” section of this MD&A for further details. The Purchase Money Note is discussed further in Note 2—Business Combinations.
The below simulations assume an immediate 100 and 200 bps parallel increase and decrease from current interest rates and the estimated impact on our EVE profile based on our current modeling approach: Table 41 Economic Value of Equity Modeling Analysis Estimated Increase (Decrease) in EVE Change in interest rate (bps) December 31, 2024 September 30, 2024 June 30, 2024 -200 5.4 % 4.2 % 5.2 % -100 3.1 3.2 2.7 +100 (3.2) (3.2) (2.5) +200 (7.0) (5.2) (4.6) In addition to the above reported sensitivities, a wide variety of potential interest rate scenarios are simulated within our asset/liability management system.
The below simulations assume an immediate 100 and 200 bps parallel increase and decrease from current interest rates and the estimated impact on our EVE profile based on our current modeling approach: Table 44 EVE Modeling Analysis Estimated Increase (Decrease) in EVE Change in interest rate (bps) December 31, 2025 December 31, 2024 -200 6.7 % 5.4 % -100 4.3 3.1 +100 (4.2) (3.2) +200 (8.2) (7.0) In addition to the above reported sensitivities, a wide variety of potential interest rate scenarios are simulated within our asset/liability management system.
Funding, Liquidity and Capital Overview Deposit Composition and Trends We fund our business primarily through deposits. Deposits represented approximately 81% of total funding at December 31, 2024.
Funding, Liquidity and Capital Overview Deposit Composition and Trends We fund our business primarily through deposits. Deposits represented approximately 82% of total funding at December 31, 2025.
We manage debt security market risk by monitoring the average duration of our investment securities portfolio. The duration of our investment securities was approximately 2.8 years at December 31, 2024. The investment securities available for sale portfolio had an average duration of 2.4 years and the held to maturity portfolio had an average duration of 4.4 years.
We manage debt security market risk by monitoring the average duration of our investment securities portfolio. The duration of our investment securities was approximately 2.7 years at December 31, 2025. The investment securities available for sale portfolio had an average duration of 2.3 years and the held to maturity portfolio had an average duration of 4.1 years.
These facilities are generally governed by financial covenants oriented towards ensuring that the funds’ remaining callable capital is sufficient to repay the loan, and larger commitments (typically provided to larger private equity funds) are typically secured by an assignment of the general partner's right to call capital from the fund's limited partner investors.
Capital call lines are typically governed by financial covenants oriented towards ensuring that the funds’ remaining callable capital is sufficient to repay the loan, and larger commitments (typically provided to larger private equity funds) are typically secured by an assignment of the general partner's right to call capital from the fund's LP investors.
Railcar utilization, including commitments to lease, was 97.6% at December 31, 2024 and 98.7% at December 31, 2023. Portfolio Rail segment customers include all of the U.S. and Canadian Class I railroads (i.e., railroads with annual revenues of approximately $500 million and greater) and other railroads, as well as manufacturers and commodity shippers.
Railcar utilization, including commitments to lease, was 96.2% at December 31, 2025, compared to 97.6% at December 31, 2024. Rail segment customers include all of the U.S. and Canadian Class I railroads (i.e., railroads with annual revenues of approximately $500 million and greater) and other railroads, as well as manufacturers and commodity shippers.
Throughout this MD&A, references to a specific “Note” refer to the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data. Intercompany accounts and transactions have been eliminated.
This MD&A should be read in conjunction with the audited consolidated financial statements and Notes to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data. Throughout this MD&A, references to a specific “Note” refer to the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data. Intercompany accounts and transactions have been eliminated.
In combination with other risk management and monitoring practices, asset risk is monitored through reviews of the equipment markets, including utilization rates and traffic flows; the evaluation of supply and demand dynamics; the impact of new technologies; and changes in regulatory requirements on different types of equipment.
Reviews for impairment are performed at least annually. 75 In combination with other risk management and monitoring practices, asset risk is monitored through reviews of the equipment markets, including utilization rates and traffic flows; the evaluation of supply and demand dynamics; the impact of new technologies; and changes in regulatory requirements on different types of equipment.
Higher-risk investments typically carry a higher interest rate, but expose us to higher levels of market and/or credit risk. We strive to maintain a high level of interest-earning assets relative to total assets while keeping non-earning assets at a minimum. Interest-earning Deposits at Banks Interest-earning deposits at banks are primarily comprised of interest-bearing deposits with the FRB.
Higher-risk investments typically carry a higher interest rate, but could expose us to higher levels of market and/or credit risk. We strive to maintain a high level of interest-earning assets relative to total assets. 60 Interest-earning Deposits at Banks Interest-earning deposits at banks are primarily comprised of interest-earning deposits at the FRB.
Potential sources that could fund voluntary prepayments of the Purchase Money Note or the amount due at maturity include excess liquidity (primarily comprised of interest-earning deposits at banks and proceeds from maturities and paydowns of investment securities), FHLB advances, deposit growth, and issuance of unsecured debt or other borrowings.
Potential sources that could fund voluntary prepayments or the amount due at maturity include excess liquidity (primarily comprised of interest-earning deposits at banks and proceeds from maturities and paydowns of investment securities), FHLB advances, deposit growth, loan portfolio sales, and issuance of perpetual preferred stock, unsecured debt or other borrowings.
Potential sources that could fund voluntary prepayments of the Purchase Money Note or the amount due at maturity include excess liquidity (primarily comprised of interest-earning deposits at banks and proceeds from maturities and paydowns of investment securities), FHLB advances, deposit growth, and issuance of unsecured debt or other borrowings.
Potential sources that could fund voluntary prepayments or the amount due at maturity include excess liquidity (primarily comprised of interest-earning deposits at banks and proceeds from maturities and paydowns of investment securities), FHLB advances, deposit growth, loan portfolio sales, and issuance of perpetual preferred stock, unsecured debt or other borrowings.
For corporate bonds, we analyzed the changes in interest rates relative to when the investment securities were purchased or acquired, and considered other factors including changes in credit ratings, delinquencies, and other macroeconomic factors. We determined no allowance for credit loss was required as of December 31, 2024.
For corporate bonds, we analyzed the changes in interest rates relative to when the investment securities were purchased or acquired, and considered other factors including changes in credit ratings, delinquencies, and other macroeconomic factors. We determined no allowance for credit loss was required as of December 31, 2025. Our portfolio of investment securities held to maturity consists of U.S.
We will continue to monitor the interest rate environment and assess whether any voluntary prepayments are prudent considering the fixed rate of 3.50% on the Purchase Money Note.
We will continue to monitor the interest rate environment and FCB’s collateral position for the Purchase Money Note and assess whether any further voluntary prepayments are prudent considering the fixed rate of 3.50%.
We will continue to monitor the interest rate environment and assess whether any voluntary prepayments are prudent considering the fixed rate of 3.50% on the Purchase Money Note.
We will continue to monitor the interest rate environment and FCB’s collateral position for the Purchase Money Note and assess whether any further voluntary prepayments are prudent considering the fixed rate of 3.50%.
Earnings per diluted common share for the Current Year was $189.41, a decrease from $784.51 for the Prior Year.
Earnings per diluted common share for the current year was $165.24, a decrease from $189.41 for the prior year.
Table 44 Liquidity dollars in millions December 31, 2024 Available cash $ 20,545 High-quality liquid securities (1) 38,794 High-quality liquid assets $ 59,339 Credit Facilities: Current Capacity (2) FDIC facility (3) $ 5,291 FHLB facility (4) 16,423 FRB facility 5,475 Line of credit 100 Total contingent sources $ 27,289 Total liquid assets and contingent sources $ 86,628 Total uninsured deposits $ 59,510 Coverage ratio of total liquid assets and contingent sources to uninsured deposits 146 % (1) Consists of readily-marketable, unpledged securities, as well as securities pledged but not drawn against at the FHLB and available for sale, and generally is comprised of U.S.
Table 47 Liquidity dollars in millions December 31, 2025 December 31, 2024 Available cash $ 19,111 $ 20,545 High-quality liquid securities (1) 36,895 38,794 High-quality liquid assets $ 56,006 $ 59,339 Current Capacity (2) of Credit Facilities: FHLB facility (3) $ 17,775 $ 16,423 FRB facility 12,962 5,475 FDIC facility (4) — 5,291 Line of credit — 100 Total contingent sources $ 30,737 $ 27,289 Total liquid assets and contingent sources $ 86,743 $ 86,628 Total uninsured deposits $ 61,809 $ 59,510 Coverage ratio of total liquid assets and contingent sources to uninsured deposits 140 % 146 % (1) Consists of readily marketable, unpledged securities, as well as securities pledged but not drawn against at the FHLB and available for sale, and generally is comprised of U.S.
Treasury and U.S. Agency investment securities held outright or via reverse repurchase agreements. (2) Current capacity is based on the amount of collateral pledged and available for use at December 31, 2024.
Treasury and U.S. agency investment securities held outright or via reverse repurchase agreements. (2) Current capacity is based on the amount of collateral pledged and available for use at December 31, 2025 and December 31, 2024. (3) Refer to Table 48 for additional details.
At the time of voluntary prepayment or maturity, the interest rates for the potential interest-bearing sources of repayment could be higher than the 3.50% rate on the Purchase Money Note. 54 Investment Securities Duration At December 31, 2024, our investment securities portfolio primarily consisted of debt securities available for sale and held to maturity as summarized below.
At the time of any further voluntary prepayment or maturity, the interest rates for the potential interest-bearing sources of prepayment could be higher than the 3.50% rate. Investment Securities Duration At December 31, 2025, our investment securities portfolio primarily consisted of debt securities available for sale and held to maturity as summarized below.
Refer to the “Interest-earning Assets—Investment Securities” section of this MD&A and Note 3—Investment Securities for further information.
Refer to the “Balance Sheet Analysis—Interest-earning Assets—Investment Securities” section of this MD&A and Note 3—Investment Securities for further information.
Commercial Lending and Leasing BancShares employs a credit ratings system where each commercial loan is assigned a probability of obligor default (“PD”), loss given default (“LGD”), and/or overall credit rating using scorecards developed to rate each type of transaction incorporating assessments of both quantitative and qualitative factors.
Commercial Lending and Leasing BancShares employs a credit ratings system where each commercial loan is assigned a PD, LGD, and/or overall credit rating using scorecards developed to rate each type of transaction incorporating assessments of both quantitative and qualitative factors.
Our Board strives to ensure that risk management is a part of our business culture and that our policies and procedures for identifying, assessing, monitoring, and managing risk are part of the decision-making process. The Board’s role in risk oversight is an integral part of our overall Risk Management Framework and Risk Appetite Framework.
The Board strives to ensure that risk management is a part of our business culture and that our policies and procedures to identify, assess, respond, and monitor risk are part of the decision-making process. The Board’s role in risk oversight is an integral part of our overall Risk Management Framework and Risk Appetite Policy.
SVB Commercial segment deposits as of December 31, 2024 were $36.64 billion or 23.6% of total deposits and are primarily concentrated in online banking. Deposits in the SVB Commercial segment include large dollar accounts with private equity and venture capital clients, primarily in the technology, life science and healthcare industries.
Commercial Bank segment deposits as of December 31, 2025 were $41.53 billion or 25.7% of total deposits and are primarily concentrated in online banking. Deposits in the Commercial Bank segment include large dollar accounts with private equity and venture capital clients, primarily in the technology, life science and healthcare industries.
We believe our targeted non-maturity deposit customer retention is strong and we remain focused on optimizing our mix of deposits. We regularly assess the effect of deposit rate changes on our balances and seek to achieve optimal alignment between assets and liabilities. The following table summarizes the results of 12-month NII Sensitivity simulations produced by our asset/liability management system.
We regularly assess the effect of deposit rate changes on our balances and seek to achieve optimal alignment between assets and liabilities. The following table summarizes the results of 12-month NII Sensitivity simulations produced by our asset/liability management system.
The following table presents the major components of acquisition-related expenses: Table 12 Acquisition-related expenses dollars in millions Year Ended December 31, 2024 2023 2022 Personnel cost $ 78 $ 275 $ 167 Professional fees 109 92 36 Asset impairment 9 67 9 Other acquisition-related expense 14 36 19 Total acquisition-related expense $ 210 $ 470 $ 231 Personnel cost primarily includes severance and retention costs for employees associated with business combinations.
Table 11 Acquisition-related Expenses dollars in millions Year Ended December 31, 2025 2024 2023 Personnel cost $ 57 $ 78 $ 275 Professional fees 77 109 92 Asset impairment — 9 67 Other acquisition-related expense 7 14 36 Total acquisition-related expense $ 141 $ 210 $ 470 Acquisition-related personnel cost primarily includes severance and retention costs for employees associated with business combinations.
Based on branch location, our top state deposit concentrations as of December 31, 2024 were in North Carolina, California, and South Carolina, which represented approximately 26.1%, 8.5%, and 7.8%, respectively, of total deposits. The Direct Bank had $41.09 billion or 26.5% of our total deposits as of December 31, 2024. The Direct Bank deposits mainly consist of savings deposit accounts.
Based on branch location, our top state deposit concentrations as of December 31, 2025 were in North Carolina, South Carolina, and California, which represented approximately 25.7%, 7.7%, and 6.9%, respectively, of total deposits. The Direct Bank had $44.80 billion or 27.7% of our total deposits as of December 31, 2025. The Direct Bank deposits mainly consist of savings.
RESULTS BY SEGMENT We made changes to our segment reporting during the first quarter of 2024 as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation. Segment disclosures for 2023 and 2022 periods included in this Form 10-K were recast to reflect the segment reporting changes.
RESULTS BY SEGMENT We made Segment Reporting Updates during 2025 as discussed in Note 1—Significant Accounting Policies and Basis of Presentation and in the “Executive Overview—Recent Events” section earlier in this MD&A. Segment disclosures for the 2024 and 2023 periods included in this Form 10-K were recast to reflect the changes.
BALANCE SHEET ANALYSIS Interest-earning Assets Interest-earning assets include interest-earning deposits at banks, securities purchased under agreements to resell, investment securities, loans held for sale, and loans and leases, all of which reflect varying interest rates based on the risk level and repricing characteristics of the underlying asset.
Information regarding our capital and regulatory capital is included in the “Capital” section of this MD&A. Interest-earning Assets Interest-earning assets include interest-earning deposits at banks, securities purchased under agreements to resell, investment securities, loans held for sale, and loans and leases, all of which reflect varying interest rates based on the risk level and repricing characteristics of the underlying asset.
The Board administers its risk oversight function primarily through its Risk Committee. The Risk Committee structure is designed to allow for information flow, effective challenge and timely escalation of risk-related issues.
The Board administers its risk oversight function primarily through its Risk Committee. The Risk Committee structure is designed to allow for information flow, effective challenge and timely escalation of risk-related issues. The Risk Committee monitors adherence to our Risk Management Framework and Risk Appetite Policy and Statement and provides quarterly updates to the Board on risk management.
These simulations assume static balance sheet replacement with like products and implied forward market rates, and also incorporate additional internal models and assumptions, including rate dependent prepayment for certain loans and securities and repricing of interest-bearing non-maturity deposits. The below simulations assume an immediate 100 and 200 bps parallel increase and decrease from current interest rates.
These simulations assume static balance sheet replacement with like products and implied forward market rates, and also incorporate additional internal models and assumptions, which we may update periodically, including rate dependent prepayment for certain loans and securities and repricing of interest-bearing non-maturity deposits.
Income Statement Highlights • Net income for the Current Year was $2.78 billion, a decrease of $8.69 billion or 76% from $11.47 billion for the Prior Year. Net income available to common stockholders for the Current Year was $2.72 billion, a decrease of $8.69 billion from $11.41 billion for the Prior Year.
Income Statement Highlights • Net income for the current year was $2.21 billion, a decrease of $571 million or 21%, from $2.78 billion for the prior year. Net income available to common stockholders for the current year was $2.15 billion, a decrease of $567 million or 21%, from $2.72 billion for the prior year.
BancShares estimates the expected funding amounts and applies its PD and LGD models to those expected funding amounts to estimate the reserve. The reserve for off-balance sheet credit exposure was $278 million at December 31, 2024, a decrease of $38 million compared to $316 million at December 31, 2023.
BancShares estimates the expected funding amounts and applies its probability of obligor default (“PD”) and loss given default (“LGD”) models to those expected funding amounts to estimate the reserve. The reserve for off-balance sheet credit exposure was $260 million at December 31, 2025, a decrease of $18 million compared to $278 million at December 31, 2024.
This component is allocated between the changes due to volume and yield or rate based on the ratio each component bears to the absolute dollar amounts of their total. • Tax equivalent NII was not materially different from NII, therefore we present NII in our analysis. 55 Table 5 Average Balances and Yields/Rates dollars in millions Year Ended December 31, 2024 December 31, 2023 Change in NII Due to: Average Balance Income / Expense Yield / Rate Average Balance Income / Expense Yield / Rate Volume (1) Yield /Rate (1) Total Change Loans and leases (1)(2) $ 136,026 $ 9,528 7.00 % $ 117,708 $ 8,187 6.95 % $ 1,278 $ 63 $ 1,341 Investment securities 37,029 1,334 3.60 23,112 640 2.77 462 232 694 Securities purchased under agreements to resell 247 13 5.18 161 8 5.20 5 — 5 Interest-earning deposits at banks 28,276 1,478 5.23 29,790 1,556 5.22 (79) 1 (78) Total interest-earning assets (2) $ 201,578 $ 12,353 6.12 % $ 170,771 $ 10,391 6.08 % $ 1,666 $ 296 $ 1,962 Operating lease equipment, net $ 9,003 $ 8,495 Cash and due from banks 753 879 Allowance for loan and lease losses (1,748) (1,495) All other noninterest-earning assets 10,214 15,631 Total assets $ 219,800 $ 194,281 Interest-bearing deposits Checking with interest $ 24,199 $ 526 2.17 % $ 22,296 $ 402 1.80 % $ 36 $ 88 $ 124 Money market 33,107 1,031 3.11 27,583 618 2.24 140 273 413 Savings 38,997 1,663 4.26 26,104 963 3.69 532 168 700 Time deposits 15,202 644 4.23 14,947 514 3.44 10 120 130 Total interest-bearing deposits 111,505 3,864 3.47 90,930 2,497 2.75 718 649 1,367 Borrowings: Securities sold under customer repurchase agreements 392 2 0.51 455 2 0.35 — — — Short-term FHLB borrowings — — — 108 5 4.79 (6) 1 (5) Short-term borrowings 392 2 0.51 563 7 1.20 (6) 1 (5) Federal Home Loan Bank borrowings — — — 2,307 120 5.22 (74) (46) (120) Senior unsecured borrowings 292 8 2.63 608 14 2.21 (8) 2 (6) Subordinated debt 889 29 3.18 1,043 39 3.65 (5) (5) (10) Other borrowings 35,826 1,307 3.65 27,322 1,002 3.67 310 (5) 305 Long-term borrowings 37,007 1,344 3.63 31,280 1,175 3.75 223 (54) 169 Total borrowings 37,399 1,346 3.60 31,843 1,182 3.71 217 (53) 164 Total interest-bearing liabilities $ 148,904 $ 5,210 3.50 % $ 122,773 $ 3,679 3.00 % $ 935 $ 596 $ 1,531 Noninterest-bearing deposits $ 39,499 $ 39,660 Credit balances of factoring clients 1,192 1,166 Other noninterest-bearing liabilities 7,908 12,745 Stockholders' equity 22,297 17,937 Total liabilities and stockholders’ equity $ 219,800 $ 194,281 Interest rate spread (2) 2.62 % 3.08 % Net interest income and net interest margin (2) $ 7,143 3.54 % $ 6,712 3.92 % (1) Loans and leases include nonaccrual loans and loans held for sale.
Refer to the “Executive Overview—Financial Performance Summary—Balance Sheet Highlights,” “Balance Sheet Analysis—Interest-earning Assets,” and “Balance Sheet Analysis—Interest-bearing Liabilities” sections of this MD&A for discussions of balance sheet trends that impact average interest-earning assets, average interest-bearing liabilities, and the related yields and rates paid. 50 Table 5 Average Balances, Yields and Rates, NII, and NIM dollars in millions Average Balance Yield / Rate Interest Income / Expense Year Ended Increase (Decrease) Year Ended Year Ended Increase (Decrease) due to: Dec 31, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Increase (decrease) bps Dec 31, 2024 Dec 31, 2023 Increase (Decrease) Volume (1) Yield /Rate (1) Loans and leases (1) (2) $ 136,026 $ 117,708 $ 18,318 16 % 7.00 % 6.95 % 5 $ 9,528 $ 8,187 $ 1,341 $ 1,278 $ 63 Investment securities 37,029 23,112 13,917 60 3.60 2.77 83 1,334 640 694 462 232 Securities purchased under agreements to resell 247 161 86 53 5.18 5.20 (2) 13 8 5 5 — Interest-earning deposits at banks 28,276 29,790 (1,514) (5) 5.23 5.22 1 1,478 1,556 (78) (79) 1 Total interest-earning assets (2) $ 201,578 $ 170,771 $ 30,807 18 6.12 6.08 4 $ 12,353 $ 10,391 $ 1,962 $ 1,666 $ 296 Noninterest-earning assets 18,222 23,510 (5,288) (22) Total assets $ 219,800 $ 194,281 $ 25,519 13 Interest-bearing deposits Checking with interest $ 24,199 $ 22,296 $ 1,903 9 2.17 % 1.80 % 37 $ 526 $ 402 $ 124 $ 36 $ 88 Money market 33,107 27,583 5,524 20 3.11 2.24 87 1,031 618 413 140 273 Savings 38,997 26,104 12,893 49 4.26 3.69 57 1,663 963 700 532 168 Time deposits 15,202 14,947 255 2 4.23 3.44 79 644 514 130 10 120 Total interest-bearing deposits 111,505 90,930 20,575 23 3.47 2.75 72 3,864 2,497 1,367 718 649 Borrowings: Securities sold under customer repurchase agreements 392 455 (63) (14) 0.51 0.35 16 2 2 — — — Short-term FHLB borrowings — 108 (108) (100) — 4.79 (479) — 5 (5) (6) 1 Short-term borrowings 392 563 (171) (30) 0.51 1.20 (69) 2 7 (5) (6) 1 FHLB borrowings — 2,307 (2,307) (100) — 5.22 (522) — 120 (120) (74) (46) Senior unsecured borrowings 292 608 (316) (52) 2.63 2.21 42 8 14 (6) (8) 2 Subordinated debt 889 1,043 (154) (15) 3.18 3.65 (47) 29 39 (10) (5) (5) Other borrowings 35,826 27,322 8,504 31 3.65 3.67 (2) 1,307 1,002 305 310 (5) Long-term borrowings 37,007 31,280 5,727 18 3.63 3.75 (12) 1,344 1,175 169 223 (54) Total borrowings 37,399 31,843 5,556 17 3.60 3.71 (11) 1,346 1,182 164 217 (53) Total interest-bearing liabilities $ 148,904 $ 122,773 $ 26,131 21 3.50 3.00 50 $ 5,210 $ 3,679 $ 1,531 $ 935 $ 596 Noninterest-bearing liabilities $ 48,599 $ 53,571 $ (4,972) (9) Stockholders' equity 22,297 17,937 4,360 24 Total liabilities and stockholders’ equity $ 219,800 $ 194,281 $ 25,519 13 Net interest spread (2) 2.62 % 3.08 % (46) Net interest margin and net interest income (2) 3.54 % 3.92 % (38) $ 7,143 $ 6,712 $ 431 ((1) Loans and leases include nonaccrual loans and loans held for sale.
Income Taxes Table 13 Income Tax Data dollars in millions Year Ended December 31, 2024 2023 2022 Income before income taxes $ 3,592 $ 12,077 $ 1,362 Income tax expense $ 815 $ 611 $ 264 Effective income tax rate 22.7 % 5.1 % 19.4 % The effective income tax rate (“ETR”) was 22.7% for the Current Year compared to 5.1% for the Prior Year.
These amounts are expensed as incurred. 54 Income Taxes Table 12 Income Tax Data dollars in millions Year Ended December 31, 2025 2024 2023 Income before income taxes $ 2,971 $ 3,592 $ 12,077 Income tax expense $ 765 $ 815 $ 611 Effective income tax rate 25.7 % 22.7 % 5.1 % The effective income tax rate (“ETR”) was 25.7% for the current year compared to 22.7% for the prior year.
The total weighted average yields for investment securities available for sale and held to maturity are based on the underlying weighted average amortized cost. Table 22 Weighted Average Yield on Investment Securities December 31, 2024 Within One Year One to Five Years Five to 10 Years After 10 Years Total Investment securities available for sale: U.S.
Table 22 Weighted Average Yield on Investment Securities December 31, 2025 Within One Year One to Five Years Five to 10 Years After 10 Years Total Investment securities available for sale: U.S.
We use borrowings to diversify the funding of our business operations. In addition to the Purchase Money Note and FHLB advances, borrowings also include senior unsecured notes, securities sold under customer repurchase agreements, and subordinated notes. Total borrowings at December 31, 2024 were $37.05 billion, a decrease of $603 million from $37.65 billion at December 31, 2023.
Total deposits at December 31, 2025 were $161.58 billion, an increase of $6.35 billion or 4% from $155.23 billion at December 31, 2024. We use borrowings to diversify the funding of our business operations. In addition to the Purchase Money Note and FHLB advances, borrowings also include senior unsecured notes, securities sold under customer repurchase agreements, and subordinated notes.
Our portfolio of investment securities held to maturity consists of similar mortgage-backed securities, U.S. Treasury securities and government agency securities described above, as well as securities issued by the Supranational Entities & Multilateral Development Banks and FDIC guaranteed certificates of deposit with other financial institutions. Given the consistently strong credit rating of the U.S.
Treasury and government agency mortgage-backed securities similar to those described above, as well as securities issued by the Supranational Entities & Multilateral Development Banks. Given the consistently strong credit rating of the U.S.
Loans and leases to borrowers in medical, dental or other healthcare fields were $10.25 billion as of December 31, 2024, which represents 14.3% of commercial loans and leases, compared to $9.26 billion or 14.0% of commercial loans and leases at December 31, 2023.
Loans and leases to borrowers in medical, dental or other healthcare fields were $11.16 billion as of December 31, 2025, which represents 9.2% of commercial loans and leases, compared to $11.05 billion or 9.8% of commercial loans and leases at December 31, 2024.
Interest rate risk can arise from many of BancShares’ business activities, such as lending, leasing, investing, deposit taking, derivatives, and funding activities.
BancShares manages this inherent risk strategically based on prescribed guidelines and approved limits. Interest rate risk can arise from many of BancShares’ business activities, such as lending, leasing, investing, deposit taking, derivatives, and funding activities.
Refer to Note 13—Derivative Financial Instruments for further information on our derivative portfolio. Our funding sources consist primarily of deposits, and we also support our funding needs through wholesale funding sources (including unsecured and secured borrowings). The deposit rates we offer are influenced by market conditions and competitive factors.
Our funding sources consist primarily of deposits, and we also support our funding needs through wholesale funding sources (including unsecured and secured borrowings). The deposit rates we offer are influenced by market conditions and competitive factors. Market rates are the key factors of deposit costs, and we continue to optimize deposit costs by improving our deposit mix.
“All other noninterest expense” in the segment reporting tables below are presented net of Allocated Expenses, resulting in a reduction to expense (or “Contra Expense”) for Corporate. Refer to Note 22—Segment Information for descriptions of segment products and services.
“All other noninterest expense” in the segment reporting tables below includes the effect of allocated expenses, resulting in a reduction to expense (or “Contra Expense”) for Corporate.
Table 45 FHLB Balances dollars in millions December 31, 2024 December 31, 2023 December 31, 2022 Total borrowing capacity $ 17,873 $ 15,072 $ 14,918 Less: Advances — — 4,250 Letters of credit (1) 1,450 1,450 1,450 Available capacity $ 16,423 $ 13,622 $ 9,218 Pledged Non-PCD loans $ 30,421 $ 25,370 $ 23,491 (1) Letters of credit were established with the FHLB to collateralize public funds.
Table 48 FHLB Balances dollars in millions December 31, 2025 December 31, 2024 Total borrowing capacity $ 19,225 $ 17,873 Less: Advances — — Letters of credit (1) 1,450 1,450 Available capacity $ 17,775 $ 16,423 Pledged Non-PCD loans $ 31,713 $ 30,421 (1) Letters of credit were established with the FHLB to collateralize public funds.
We primarily focus the discussion of our financial position by comparing balances as of December 31, 2024 to December 31, 2023, but the tables also provide December 31, 2022 balances. 50 The following table summarizes BancShares’ results: Table 1 Selected Financial Data dollars in millions, except share data Year Ended December 31, 2024 2023 2022 Results of Operations: Interest income $ 12,353 $ 10,391 $ 3,413 Interest expense 5,210 3,679 467 Net interest income 7,143 6,712 2,946 Provision for credit losses 431 1,375 645 Net interest income after provision for credit losses 6,712 5,337 2,301 Noninterest income 2,615 12,075 2,136 Noninterest expense 5,735 5,335 3,075 Income before income taxes 3,592 12,077 1,362 Income tax expense 815 611 264 Net income 2,777 11,466 1,098 Preferred stock dividends 61 59 50 Net income available to common stockholders $ 2,716 $ 11,407 $ 1,048 Per Common Share Information: Weighted average common shares outstanding (diluted) 14,342,655 14,539,613 15,549,944 Diluted earnings per common share $ 189.41 $ 784.51 $ 67.40 Key Performance Metrics: Return on average assets 1.26 % 5.90 % 1.01 % Net interest margin (1) 3.54 3.92 3.16 Net interest margin, excluding purchase accounting accretion (1)(3) 3.30 3.50 3.05 Select Average Balances: Investment securities $ 37,029 $ 23,112 $ 19,166 Total loans and leases (2) 137,546 119,234 67,787 Operating lease equipment, net 9,003 8,495 7,982 Total assets 219,800 194,281 108,915 Total deposits 151,004 130,590 89,916 Total stockholders’ equity 22,297 17,937 10,276 Select Ending Balances: Investment securities $ 44,090 $ 29,999 $ 19,369 Total loans and leases 140,221 133,302 70,781 Operating lease equipment, net 9,323 8,746 8,156 Total assets 223,720 213,758 109,298 Total deposits 155,229 145,854 89,408 Total stockholders’ equity 22,228 21,255 9,662 Loan to deposit ratio 90.33 % 91.39 % 79.17 % Noninterest-bearing deposits to total deposits 24.89 27.29 27.87 Capital Ratios: Total risk-based capital 15.04 % 15.75 % 13.18 % Tier 1 risk-based capital 13.53 13.94 11.06 Common equity Tier 1 12.99 13.36 10.08 Tier 1 leverage 9.90 9.83 8.99 Asset Quality: Ratio of nonaccrual loans to total loans 0.84 % 0.73 % 0.89 % Allowance for loan and lease losses to loans ratio 1.20 1.31 1.30 Net charge off ratio 0.39 0.47 0.12 (1) Calculated net of average credit balances and deposits of factoring clients.
Percent changes within this MD&A are based on unrounded amounts and may not recalculate precisely using the displayed rounded balances. 43 Table 1 Selected Financial Data dollars in millions, except share data Year Ended December 31, 2025 2024 2023 Results of Operations: Interest income $ 11,778 $ 12,353 $ 10,391 Interest expense 4,964 5,210 3,679 Net interest income 6,814 7,143 6,712 Provision for credit losses 514 431 1,375 Net interest income after provision for credit losses 6,300 6,712 5,337 Noninterest income 2,727 2,615 12,075 Noninterest expense 6,056 5,735 5,335 Income before income taxes 2,971 3,592 12,077 Income tax expense 765 815 611 Net income 2,206 2,777 11,466 Preferred stock dividends 57 61 59 Net income available to common stockholders $ 2,149 $ 2,716 $ 11,407 Per Common Share Information: Weighted average common shares outstanding (diluted) 13,002,455 14,342,655 14,539,613 Diluted earnings per common share $ 165.24 $ 189.41 $ 784.51 Key Performance Metrics: Return on average assets 0.96 % 1.26 % 5.90 % Net interest margin (1) 3.25 3.54 3.92 Net interest margin, excluding purchase accounting accretion or amortization (1) (2) 3.13 3.30 3.50 Select Average Balances: Investment securities $ 44,160 $ 37,029 $ 23,112 Total loans and leases (3) 143,227 137,546 119,234 Operating lease equipment, net 9,432 9,003 8,495 Total assets 229,266 219,800 194,281 Total deposits 159,486 151,004 130,590 Total borrowings 38,061 37,399 31,843 Total stockholders’ equity 22,357 22,297 17,937 Select Ending Balances: Investment securities $ 41,564 $ 44,090 $ 29,999 Total loans and leases 147,930 140,221 133,302 Operating lease equipment, net 9,621 9,323 8,746 Total assets 229,698 223,720 213,758 Total deposits 161,578 155,229 145,854 Total borrowings 36,008 37,051 37,654 Total stockholders’ equity 22,238 22,228 21,255 Loan to deposit ratio 91.55 % 90.33 % 91.39 % Noninterest-bearing deposits to total deposits 25.16 24.89 27.29 Capital Ratios: Total risk-based capital 13.71 % 15.04 % 15.75 % Tier 1 risk-based capital 11.91 13.53 13.94 Common equity Tier 1 11.15 12.99 13.36 Tier 1 leverage 9.29 9.90 9.83 Select Asset Quality Metrics: Ratio of nonaccrual loans to total loans 0.88 % 0.84 % 0.73 % Allowance for loan and lease losses to loans ratio 1.06 1.20 1.31 (1) Calculated net of average credit balances of factoring clients to appropriately reflect the interest-earning portion of factoring receivables.
Refer to the “NII, NIM, and Interest and Fees on Loans, Excluding PAA” discussion in the “Non-GAAP Financial Measurements” section of this MD&A for further discussion. • Interest income on loans and leases for the Current Year was $9.53 billion, an increase of $1.34 billion or 16% from $8.19 billion for the Prior Year.
(1) Refer to the “NII, NIM, and Interest Income on Loans and Leases, Excluding PAA” discussion in the “Non-GAAP Financial Measurements” section of this MD&A for further information.
The ETR in future periods may vary from the Current Year ETR due to changes in these factors. BancShares monitors and evaluates the potential impact of current events on the estimates used to establish income tax expense and income tax liabilities.
BancShares monitors and evaluates the potential impact of current events on the estimates used to establish income tax expense and income tax liabilities.
Refer to the “Non-GAAP Financial Measurements” section of this MD&A for a reconciliation from the most comparable GAAP measure to the non-GAAP measure. (2) Total noninterest income and total noninterest expense include depreciation on operating lease equipment.
Refer to the “Non-GAAP Financial Measurements” section of this MD&A for a reconciliation from the most comparable GAAP measure to the non-GAAP measure.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of BancShares’ Annual Report on Form 10-K as of and for the year ended December 31, 2023 filed with the SEC on February 23, 2024 and included in a Current Report on Form 8-K filed on August 14, 2024 to reflect segment reporting changes summarized in Note 1—Significant Accounting Policies and Basis of Presentation and available through our investor relations website ir.firstcitizens.com or the SEC’s EDGAR database.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of BancShares’ Annual Report on Form 10-K as of and for the year ended December 31, 2024 (the “2024 Form 10-K”) filed with the SEC on February 21, 2025 and available through our investor relations website ir.firstcitizens.com or the SEC’s EDGAR database.
On-balance sheet commitments for affordable housing partnerships are included in other liabilities and presented net of a purchase accounting adjustment of $33 million. (2) Balances in parenthesis represent the estimated amortization of the purchase accounting adjustment and deferred costs in excess of any principal balance.
On-balance sheet commitments for affordable housing partnerships are included in other liabilities and presented net of a purchase accounting adjustment of $14 million.
Securities Purchased Under Agreements to Resell Securities purchased under agreements to resell at December 31, 2024 totaled $158 million, a decrease of $315 million from $473 million at December 31, 2023. 68 Investment Securities The primary objective of the investment portfolio is to generate incremental income by deploying excess funds into securities that have minimal liquidity risk and low to moderate interest rate risk and credit risk.
Investment Securities The primary objective of the investment portfolio is to generate incremental income by deploying excess funds into securities that have minimal liquidity risk and low to moderate interest rate risk and credit risk.
The higher Current Year ETR compared to the Prior Year was mostly due to the non-taxable nature of the gain on the SVBB Acquisition in the Prior Year. 62 The ETR is impacted by a number of factors, including the relative mix of domestic and international earnings, effects of changes in enacted tax laws, adjustments to valuation allowances, and discrete items.
The ETR is impacted by a number of factors, including the relative mix of domestic, state, and international earnings, effects of changes in enacted tax laws, adjustments to valuation allowances, and discrete items. The ETR in future periods may vary from the current year ETR due to changes in these factors.
Table 10 Noninterest Income dollars in millions Year Ended December 31, 2024 2023 2022 Rental income on operating lease equipment $ 1,048 $ 971 $ 864 Other noninterest income: Lending-related fees 257 218 103 Deposit fees and service charges 230 200 142 Client investment fees 213 157 — Wealth management services 211 188 142 International fees 119 91 8 Factoring commissions 75 82 104 Cardholder services, net 163 139 102 Merchant services, net 49 48 35 Insurance commissions 55 54 47 Realized gain (loss) on sale of investment securities, net 6 (26) — Fair value adjustment on marketable equity securities, net 13 (11) (3) Gain on sale of leasing equipment, net 30 20 15 Gain on acquisition — 9,808 431 (Loss) gain on extinguishment of debt (2) — 7 Other noninterest income 148 136 139 Total other noninterest income 1,567 11,104 1,272 Total noninterest income $ 2,615 $ 12,075 $ 2,136 Rental Income on Operating Lease Equipment Rental income on operating lease equipment was $1.05 billion for the Current Year, an increase of $77 million or 8% from $971 million for the Prior Year.
The ALLL and net charge-offs are further discussed in the “Risk Management—Credit Risk” section of this MD&A and in Note 6—Allowance for Loan and Lease Losses. 52 Noninterest Income The following table presents noninterest income: Table 9 Noninterest Income dollars in millions Year Ended December 31, Increase (Decrease) 2025 v 2024 2025 2024 2023 Rental income on operating lease equipment $ 1,096 $ 1,048 $ 971 $ 48 5 % Lending-related fees 266 257 218 9 3 Deposit fees and service charges 241 230 200 11 5 Client investment fees 217 213 157 4 2 Wealth management services 229 211 188 18 8 International fees 136 119 91 17 14 Factoring commissions 73 75 82 (2) (2) Cardholder services, net 158 163 139 (5) (3) Merchant services, net 52 49 48 3 4 Insurance commissions 53 55 54 (2) (2) Realized gain (loss) on sale of investment securities, net 3 6 (26) (3) (46) Fair value adjustment on marketable equity securities, net 22 13 (11) 9 70 Gain on sale of leasing equipment, net 30 30 20 — — Gain on acquisition — — 9,808 — — Loss on extinguishment of debt (9) (2) — (7) (351) Other noninterest income 160 148 136 12 8 Total noninterest income $ 2,727 $ 2,615 $ 12,075 $ 112 4 % Noninterest income for the current year was $2.73 billion.
The weighted average yield on the portfolio was calculated using security-level annualized yields based on book yield to maturity and takes into account amortization of premiums and accretion of discounts, but does not include the effects of hedging.
The weighted average yield on the portfolio was calculated using security-level annualized yields based on book yield to maturity and takes into account amortization of premiums and accretion of discounts. The total weighted average yields for investment securities available for sale and held to maturity are based on the underlying weighted average amortized cost.
Business in the section entitled “Regulatory Considerations.” Financial Performance Summary The following tables in this MD&A include financial data as of and for the year ended December 31, 2024 (“Current Year”), December 31, 2023 (“Prior Year”) and December 31, 2022.
Financial Performance Summary The following tables in this MD&A include financial data as of and for the year ended December 31, 2025 (the “current year”), December 31, 2024 (the “prior year”) and December 31, 2023. We focus the discussion of our financial position by comparing balances as of December 31, 2025 to December 31, 2024.
Refer to the “Non-GAAP Financial Measurements” section of this MD&A for a reconciliation from the most comparable GAAP measure to the non-GAAP measure. (2) Total noninterest income and total noninterest expense include depreciation and maintenance on operating lease equipment.
Refer to the “Non-GAAP Financial Measurements” section of this MD&A for a reconciliation from the most comparable GAAP measure to the non-GAAP measure.
We continually monitor our capital needs and market conditions in an effort to diversify our borrowing base when appropriate. 87 FHLB Capacity A source of available funds is advances from the FHLB of Atlanta. We may pledge assets for secured borrowing transactions, which include borrowings from the FHLB and/or FRB, or for other purposes as required or permitted by law.
We continually monitor our capital needs and market conditions in an effort to diversify our borrowing base and capital mix when appropriate. 80 FHLB Capacity A source of available funds is advances from the FHLB of Atlanta.
The decline was due to a higher average balance of interest-bearing deposits and the Purchase Money Note, a higher average rate paid on deposits, and lower PAA, partially offset by higher average balances and yields on loans and investment securities. NIM, excluding PAA, was 3.30% for the Current Year compared to 3.50% for the Prior Year.
The decline in NIM was mainly due to lower yields on loans, lower average balance and yields on interest-earning deposits at banks, and lower PAA, partially offset by the impacts of a decline in the rate paid on interest-bearing deposits and a higher average balance of loans and investment securities.
In the Rail segment, BancShares seeks to mitigate these risks by maintaining a relatively young fleet of assets, which can bolster attractive lease and utilization rates. 83 Market Risk Interest rate risk management BancShares is exposed to the risk that changes in market conditions may affect interest rates and negatively impact earnings.
In the Rail segment, BancShares seeks to mitigate these risks by maintaining a relatively young fleet of assets, which can bolster attractive lease and utilization rates. Market Risk Market risk is the risk arising from changes in interest rates, foreign exchange, fixed income, commodity, or equity prices which can result in financial loss, or adverse impact to earnings and capital.
The debt issued in conjunction with these transactions is collateralized by certain discrete receivables, securities, loans, leases and/or underlying equipment. Certain related cash balances are restricted.
We may pledge assets for secured borrowing transactions, which include borrowings from the FHLB or FRB, or for other purposes as required or permitted by law. The debt issued in conjunction with these transactions is collateralized by certain discrete receivables, securities, loans, leases and underlying equipment. Certain related cash balances are restricted.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Management’s discussion and analysis (“MD&A”) of earnings and related financial data is presented to assist in understanding BancShares’ financial condition and results of operations. Unless otherwise noted, the terms “we,” “us,” “our,” and “BancShares” in this MD&A refer to our consolidated financial condition and results of operations.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Management’s discussion and analysis (“MD&A”) of earnings and related financial data is presented to assist in understanding the financial condition and results of operations of BancShares.
We measure and forecast liquidity and liquidity risks under different hypothetical scenarios and across different horizons. We use a liquidity stress testing framework to better understand the range of potential risks and their impacts to which BancShares is exposed. Stress test results inform our business strategy, risk appetite, levels of liquid assets, and contingency funding plans.
We utilize measurement tools to assess and monitor the level and adequacy of our liquidity position, liquidity conditions and trends. We measure and forecast liquidity and liquidity risks under different hypothetical scenarios and across different horizons. We use a liquidity stress testing framework to better understand the range of potential risks and their impacts to which BancShares is exposed.
Refer to the “Liquidity Risk” section of this MD&A and Note 12—Borrowings for further information regarding liquidity and borrowings. RISK MANAGEMENT Risk is inherent in any business. BancShares has defined a moderate risk appetite and a balanced approach to risk taking with a philosophy that does not preclude higher risk business activities commensurate with acceptable returns while meeting regulatory objectives.
BancShares has defined a moderate risk appetite and a balanced approach to risk taking with a philosophy that does not preclude higher risk business activities commensurate with acceptable returns while meeting regulatory objectives.
Additional sources of liquidity include committed credit facilities, repurchase agreements, brokered certificates of deposit issuances, unsecured debt issuances, and cash collections generated by portfolio asset sales to third parties. We utilize measurement tools to assess and monitor the level and adequacy of our liquidity position, liquidity conditions and trends.
Consistent with this strategy, we maintain sufficient amounts of available cash and HQLS. Additional sources of liquidity include committed credit facilities, repurchase agreements, brokered certificates of deposit issuances, unsecured debt issuances, and cash collections generated by portfolio asset sales to third parties.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations within the “Risk Management” section and in Item 8. Financial Statements and Supplementary Data within Note 1—Significant Accounting Policies and Basis of Presentation, Note 13—Derivative Financial Instruments and Note 15—Fair Value. 95
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations within the “Risk Management” section and in Item 8. Financial Statements and Supplementary Data within Note 13—Derivative Financial Instruments and Note 14—Fair Value of this Form 10-K. 91
Changes in fair value that result from movement in market rates cannot be predicted with any degree of certainty. Therefore, the impact that future changes in market rates will have on the fair values of financial instruments is uncertain. Market risk information is set forth in Item 7.
Changes in fair value that result from movement in market rates cannot be predicted with any degree of certainty. Therefore, the impact that future changes in market rates will have on the fair values of financial instruments is uncertain. The information required by this Item 7A. Quantitative and Qualitative Disclosures about Market Risk is set forth in Item 7.

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