10-K – 2026-02-24 – fcnca-20251231.htm

NII and NIM
The table above quantifies the increases or decreases for the current year compared to the prior year for NII and NIM, as well as average balances of interest-earning assets and interest-bearing liabilities, and the respective yields earned and rates paid. The main reasons for the increases and decreases are explained below:
• NII for the current year was $6.81 billion, a decrease of $329 million or 5%, from $7.14 billion for the prior year. NII, excluding PAA, (1) was $6.56 billion for the current year, a decrease of $99 million, from $6.66 billion for the prior year. The main reasons for the decreases in NII and NII, excluding PAA, (1) are explained below:
◦ Interest income on interest-earning deposits at banks for the current year was $992 million, a decrease of $486 million or 33%, from $1.48 billion for the prior year, due to a decline in the federal funds rate and a lower average balance.
◦ Interest income on loans and leases for the current year was $9.10 billion, a decrease of $432 million or 5%, from $9.53 billion for the prior year, mainly due to a lower yield and lower loan PAA, partially offset by the impact of a higher average balance.
• Interest income on loans and leases, excluding loan PAA, (1) was $8.81 billion for the current year, a decrease of $216 million, from $9.02 billion for the prior year .
• Loan PAA was $289 million in the current year, a decrease of $216 million, from $505 million for the prior year.
◦ Interest income on investment securities (including securities purchased under agreements to resell) for the current year was $1.69 billion, an increase of $343 million or 26%, from $1.35 billion for the prior year, mainly due to a higher average balance and a higher yield.
◦ Interest expense on interest-bearing deposits for the current year was $3.56 billion, a decrease of $305 million or 8%, from $3.86 billion for the prior year, as a lower rate paid was partially offset by the impact of a higher average balance.
◦ Interest expense on borrowings for the current year was $1.41 billion, an increase of $59 million or 4%, from $1.35 billion for the prior year, primarily due to a higher rate paid and a higher average balance, reflecting the 2025 Debt Issuances.
• NIM for the current year was 3.25%, a decrease of 29 bps, from 3.54% 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. NIM, excluding PAA, (1) was 3.13% for the current year, a decrease of 17 bps, from 3.30% for the prior year.
◦ The yield on average interest-earning assets for the current year was 5.61%, a decrease of 51 bps, from 6.12% for the prior year, mainly due to a decline in yield on loans and interest-earning deposits at banks, as well as lower loan PAA, partially offset by a higher yield on investment securities.
◦ The rate paid on average interest-bearing liabilities for the current year was 3.15%, a decrease of 35 bps, from 3.50% for the prior year, primarily due to a lower rate paid on interest-bearing deposits, partially offset by the impacts of a higher average balance of interest-bearing deposits, and a higher average balance and rate paid for borrowings as a result of the 2025 Debt Issuances.

(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.

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.
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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. Interest income on loans and leases includes accretion income and loan fees.
(2)     The average balances and yields for loans and leases are calculated net of average credit balances of factoring clients to appropriately reflect the interest-earning portion of factoring receivables.
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The following table shows the types of average interest-earning assets as a percentage of total average interest-earning assets.

Table 6
Average Interest-earning Asset Mix

Year Ended December 31,
2025 2024 2023
Loans and leases 68  % 68  % 69  %
Investment securities 21  18  14 

Interest-earning deposits at banks 11  14  17 
Total interest-earning assets 100  % 100  % 100  %

The following table shows the average interest-bearing liabilities as a percentage of total average interest-bearing liabilities.

Table 7
Average Interest-bearing Liability Mix

Year Ended December 31,
2025 2024 2023
Total interest-bearing deposits 76  % 75  % 74  %

Long-term borrowings 24  25  26 
Total interest-bearing liabilities 100  % 100  % 100  %

Provision for Credit Losses

Table 8
Provision for Credit Losses

dollars in millions Year Ended December 31, Increase (Decrease)
2025 v 2024
2025 2024 2023
Day 2 Provision for Loan and Lease Losses (1)
$ —  $ —  $ 462  $ —  —  %
Provision for loan and lease losses
530  469  703  61  14 
Total provision for loan and lease losses 530  469  1,165  61  14 
Day 2 Provision for Off-Balance Sheet Credit Exposure (1)
—  —  254  —  — 
Benefit for off-balance sheet credit exposure (18) (38) (44) 20  52 
Total (benefit) provision for off-balance sheet credit exposure (18) (38) 210  20  52 

Provision for other receivables 2  —  —  2  100 
Provision for credit losses $ 514  $ 431  $ 1,375  $ 83  19  %

(1) As defined and described in Note 6—Allowance for Loan and Lease Losses

The provision for credit losses for the current year was $514 million, an increase of $83 million or 19%, from $431 million for the prior year. The current year provision for credit losses included a provision for loan and lease losses of $530 million, partially offset by a benefit for off-balance sheet credit exposure of $18 million.
• The provision for loan and lease losses for the current year was $530 million, an increase of $61 million, from $469 million for the prior year, mainly attributable to an increase in net charge-offs of $100 million, which included a charge-off of $82 million on a single supply chain finance client, partially offset by an increase in the ALLL reserve release in the current year of $39 million as a result of a $110 million reserve release in the current year, compared to a $71 million reserve release in the prior year.
◦ The ALLL was $1.57 billion at December 31, 2025, compared to $1.68 billion at December 31, 2024. The decrease of $110 million was 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.
• The benefit for off-balance sheet credit exposure for the current year was $18 million, a decrease of $20 million, compared to $38 million for the prior year. The lower benefit of $20 million was mostly due to trends in the volume of unfunded commitments, partially offset by 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.

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.
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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 main reasons for the increase of $112 million, or 4%, from $2.62 billion for the prior year, are discussed below:
• The increase in rental income on operating lease equipment of $48 million was mainly the result of growth in the railcar portfolio.
• The increase in wealth management services of $18 million was largely due to growth in assets under management.
• The increase in international fees of $17 million reflected higher volumes and commissions on foreign currency exchange transactions.
• The increase in other noninterest income of $12 million was largely due to a increases in income on tax credit investments, the favorable change in the fair value of non-marketable equity securities, and mortgage-related income, partially offset by lower derivative income and a write-down of a held for sale asset in the current year.
• The increase in deposit fees and service charges of $11 million was mostly due to higher customer activity and increased transactions due to deposit growth.

53

Noninterest Expense

The following table presents noninterest expense:

Table 10
Noninterest Expense

dollars in millions Year Ended December 31, Increase (Decrease)
2025 v 2024
2025 2024 2023
Depreciation on operating lease equipment $ 398  $ 394  $ 371  $ 4  1  %
Maintenance and other operating lease expenses 244  219  222  25  12 
Personnel cost 3,294  3,078  2,636  216  7 
Net occupancy expense 238  242  244  (4) (1)
Equipment expense 555  504  422  51  10 
Professional fees 115  121  71  (6) (4)
Third-party processing fees 268  230  205  38  17 
FDIC insurance expense 141  138  158  3  2 
Marketing expense 142  76  102  66  86 
Acquisition-related expenses 141  210  470  (69) (33)
Intangible asset amortization 54  63  57  (9) (15)
Other noninterest expense 466  460  377  6  2 

Total noninterest expense $ 6,056  $ 5,735  $ 5,335  $ 321  6  %

Noninterest expense for the current year was $6.06 billion. The main reasons for the increase of $321 million, or 6%, from $5.74 billion for the prior year, are discussed below:
• The increase in personnel cost of $216 million was mainly due to higher salaries reflecting net staff additions, annual merit increases, promotions, and higher employee benefit costs, partially offset by lower incentive compensation..
• The decrease in acquisition-related expenses of $69 million is summarized in Table 11 below.
• The increase in marketing expense of $66 million was primarily due to marketing for Direct Bank deposits.
• The increase in equipment expense of $51 million was mostly due to higher software-related costs as we continue to scale our technology platforms.
• The increase of $38 million in third-party processing fees was due to higher transaction volume and additional services as we continue to transition to more cloud-based computing services.
• The increase of $25 million in maintenance and other operating lease expenses reflect timing and the number of railcars coming on or off lease as well as asset condition. Refer to the “Results by Segment—Rail” section of this MD&A.

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. 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. These amounts are expensed as incurred.

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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 increase for the current year ETR compared to the prior year was primarily due to the prior year U.S. federal and state provision to return benefit coupled with the revaluation of deferred taxes.

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.

BancShares monitors and evaluates the potential impact of current events on the estimates used to establish income tax expense and income tax liabilities. 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.

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.

BancShares’ segments at December 31, 2025 include the General Bank, the Commercial Bank, and Rail. All other financial information not included in the segments is reported in the Corporate section of the segment disclosures. Under our segment expense allocation methodology, allocated expenses increase noninterest expense of the applicable segment(s), with an offsetting decrease to Corporate noninterest expense. “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.

Refer to Note 21—Segment Information for descriptions of segment products and services.
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General Bank

Table 13
General Bank: Financial Data

dollars in millions Year Ended December 31, Increase (Decrease)
2025 v 2024
Earnings Summary 2025 2024 2023
Net interest income $ 3,299  $ 2,951  $ 2,560  $ 348  12  %
Total noninterest income 664  612  526  52  9 
Total revenue 3,963  3,563  3,086  400  11 
Personnel cost 838  783  734  55  7 

All other noninterest expense 1,493  1,342  1,259  151  11 
Total noninterest expense 2,331  2,125  1,993  206  10 

Provision for credit losses 77  135  53  (58) (43)
Income before income taxes 1,555  1,303  1,040  252  19 
Income tax expense 380  362  279  18  5 
Net income $ 1,175  $ 941  $ 761  $ 234  25 

Select Period End Balances
Loans and leases $ 64,958  $ 64,887  $ 61,245  $ 71  —  %

Deposits 74,796  72,956  68,507  1,840  3 

General Bank segment net income for the current year increased $234 million compared to the prior year, primarily due to higher NII, lower provision for credit losses, and higher noninterest income, partially offset by increases in personnel cost and all other noninterest expense.
• The $348 million increase in NII was mainly due to loan growth and a lower rate paid on interest-bearing deposits, partially offset by the impact of deposit growth.
• The $58 million decrease in provision for credit losses reflects the ALLL build during the prior year, the elimination of reserves related to Hurricane Helene in the current year, and the 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.
• The $52 million increase in total noninterest income was mostly due to increases in wealth management services, deposit fees and service charges, and cardholder services.
• The $151 million increase in all other noninterest expense was spread amongst various accounts, including allocated expenses. Refer to the “Noninterest Expense” discussion in the “Results of Operations” section of this MD&A for further information regarding trends in consolidated noninterest expense.
• The $55 million increase in personnel cost was largely due to annual merit increases and promotions.

General Bank segment loans were $64.96 billion at December 31, 2025, an increase of $71 million compared to $64.89 billion at December 31, 2024, as growth in the Wealth, SBA, and Community Association Banking portfolios was mostly offset by a transfer of $694 million residential mortgage loans to held for sale in December 2025.

The General Bank segment mainly includes deposits in our Branch Network, which deploys a relationship-based approach to deposit gathering. General Bank segment deposits were $74.80 billion at December 31, 2025, an increase of $1.84 billion compared to $72.96 billion at December 31, 2024, as growth was primarily concentrated in our Branch Network. Deposit growth was in money market, partially offset by lower time deposits.

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Commercial Bank

Table 14
Commercial Bank: Financial Data

dollars in millions Year Ended December 31, Increase (Decrease)
2025 v 2024
Earnings Summary 2025 2024 2023
Net interest income $ 3,205  $ 3,403  $ 2,682  $ (198) (6) %
Noninterest Income
Rental income on operating lease equipment 219  227  231  (8) (4)

All other noninterest income 906  882  756  24  3 
Total noninterest income 1,125  1,109  987  16  1 

Total revenue 4,330  4,512  3,669  (182) (4)

Noninterest Expense
Personnel cost 737  741  599  (4) — 

Depreciation on operating lease equipment 175  185  179  (10) (6)
All other noninterest expense 1,686  1,626  1,468  60  4 
Total noninterest expense 2,598  2,552  2,246  46  2 

Provision for credit losses 437  296  606  141  48 
Income before income taxes 1,295  1,664  817  (369) (22)
Income tax expense 320  442  213  (122) (28)
Net income $ 975  $ 1,222  $ 604  $ (247) (20)

Select Period End Balances
Loans and leases $ 82,910  $ 75,272  $ 72,034  $ 7,638  10  %
Operating lease equipment, net 739  750  780  (11) (1)

Deposits 41,532  40,026  38,179  1,506  4 

Table 15
Reconciliation of Net Rental Income on Operating Lease Equipment (non-GAAP)

dollars in millions Year Ended December 31, Increase (Decrease)
2025 v 2024
2025 2024 2023
Rental income on operating leases (GAAP) $ 219  $ 227  $ 231  $ (8) (4) %
Less: depreciation on operating lease equipment 175  185  179  (10) (6)

Net rental income on operating lease equipment (non-GAAP) (1)
$ 44  $ 42  $ 52  $ 2  5 

(1)     Net rental income on operating lease equipment is a non-GAAP measure. 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.

Commercial Bank segment net income for the current year decreased $247 million compared to the prior year, primarily due to lower NII, higher provision for credit losses, and higher all other noninterest expense, partially offset by lower income tax expense and higher noninterest income.
• The $198 million decrease in NII was mostly due to a lower loan yield, partially offset by loan growth and lower deposit cost.
• The $141 million increase in provision for credit losses was mainly due to higher net charge-offs in the current year (largely due to the previously discussed $82 million charge-off on a single supply chain finance client), the impact of loan growth, and a higher benefit for off-balance sheet credit exposure in the prior year, partially offset by the 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.
• The $60 million increase in all other noninterest expense was spread amongst various accounts, including allocated expenses. Refer to the “Noninterest Expense” discussion in the “Results of Operations” section of this MD&A for further information regarding trends in consolidated noninterest expense.
• The $16 million increase in total noninterest income was largely due to higher international fees, client investment fees and lending-related fees, partially offset by lower rental income on operating lease equipment.
• The $10 million decline in depreciation on operating lease equipment was partially offset by a decrease of $8 million in rental income on operating leases, resulting in a $2 million increase in net rental income on operating lease equipment (1) (refer to the footnote to table above).

The increase of $7.64 billion in loans was mainly due to Global Fund Banking and other industry verticals, primarily TMT and Healthcare. The increase of $1.51 billion in deposits was mainly due to growth in Global Fund Banking. Most of the growth was in noninterest-bearing demand and money market, partially offset by a decline in checking with interest.
57

Rail

Table 16
Rail: Financial Data

dollars in millions Year Ended December 31, Increase (Decrease)
2025 v 2024
Earnings Summary 2025 2024 2023
Net interest expense $ (213) $ (186) $ (141) $ (27) 14  %
Noninterest Income
Rental income on operating lease equipment 877  821  740  56  7 

All other noninterest income 16  14  5  2  8 
Total noninterest income 893  835  745  58  7 

Total revenue 680  649  604  31  5 

Noninterest Expense
Personnel cost 26  25  22  1  3 

Depreciation on operating lease equipment 223  209  192  14  7 
Maintenance and other operating lease expenses 244  219  222  25  11 
All other noninterest expense 72  59  50  13  23 
Total noninterest expense 565  512  486  53  10 

Income before income taxes 115  137  118  (22) (16)
Income tax expense 28  36  31  (8) (23)
Net income $ 87  $ 101  $ 87  $ (14) (14)

Select Period End Balances
Loans and leases $ 62  $ 62  $ 23  $ —  —  %
Operating lease equipment, net 8,882  8,573  7,966  309  4 

Deposits 2  18  13  (16) (89)

Table 17
Reconciliation of Net Rental Income on Operating Lease Equipment (non-GAAP)

dollars in millions Year Ended December 31, Increase (Decrease)
2025 v 2024
2025 2024 2023
Rental income on operating leases (GAAP) $ 877  $ 821  $ 740  $ 56  7  %
Less: depreciation on operating lease equipment 223  209  192  14  7 
Less: maintenance and other operating lease expenses 244  219  222  25  11 
Net rental income on operating lease equipment (non-GAAP) (1)
$ 410  $ 393  $ 326  $ 17  4 

(1)     Net rental income on operating lease equipment is a non-GAAP measure. 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.

Rail segment net income for the current year decreased $14 million compared to the prior year, mostly due to higher net interest expense (“NIE”) and higher total noninterest expense, partially offset by higher rental income on operating lease equipment.
• The $27 million increase in NIE was primarily due to higher funding costs, reflective of the increase in operating lease equipment.
• The $13 million increase in all other noninterest expense was primarily due to a charge related to a vendor dispute.
• Depreciation on operating lease equipment increased $14 million, reflective of growth in operating lease equipment, and maintenance and other operating lease expenses increased $25 million. Maintenance and other operating lease expenses tend to be variable due to timing and the number of railcars coming on or off lease as well as asset condition.
• The $56 million increase in rental income on operating lease equipment reflected portfolio growth and strong repricing.
• Net rental income on operating lease equipment (1) (see footnote to table above) increased $17 million as the increase in rental income on operating leases was partially offset by higher depreciation and maintenance on operating lease equipment.

58

Railcar Portfolio
Our fleet is diverse and the average re-pricing of equipment upon lease maturities was 117% of the average prior or expiring lease rate during the fourth quarter. 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. Our total operating lease fleet at December 31, 2025 consisted of approximately 128,400 railcars and locomotives.

The following tables reflect the proportion of railcars by type based on units and net investment, and rail operating lease equipment by obligor industry:

Table 18
Operating Lease Railcar Portfolio by Type (units and net investment)

December 31, 2025 December 31, 2024 December 31, 2023
Railcar Type Total Owned
Fleet - % Total Units Total Owned
Fleet - % Total
Net Investment Total Owned
Fleet - % Total Units Total Owned
Fleet - % Total
Net Investment Total Owned
Fleet - % Total Units Total Owned
Fleet - % Total
Net Investment
Covered hoppers 45  % 41  % 45  % 42  % 45  % 42  %
Tank cars 28  39  27  38  27  38 
Mill/ coil gondolas 8  6  8  6  8  7 
Coal 6  1  7  1  7  1 
Boxcars 5  5  6  6  6  6 
Other 8  8  7  7  7  6 
Total 100  % 100  % 100  % 100  % 100  % 100  %

Table 19
Rail Operating Lease Equipment by Obligor Industry

dollars in millions December 31, 2025 December 31, 2024 December 31, 2023
Manufacturing $ 3,782  43  % $ 3,467  40  % $ 3,281  41  %
Rail 2,047  23  2,003  23  1,889  24 
Wholesale 1,554  18  1,505  18  1,217  15 
Oil and gas extraction / services 487  5  583  7  573  7 
Energy and utilities 206  2  239  3  230  3 
Other 806  9  776  9  776  10 
Total $ 8,882  100  % $ 8,573  100  % $ 7,966  100  %

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Corporate

Table 20
Corporate: Financial Data

dollars in millions Year Ended December 31, Increase (Decrease)
Year to Date
Earnings Summary 2025 2024 2023
Net interest income $ 523  $ 975  $ 1,611  $ (452) (46) %
Total noninterest income 45  59  9,817  (14) (25)
Total revenue 568  1,034  11,428  (466) (45)
Personnel cost 1,693  1,529  1,281  164  11 
Acquisition-related expenses 141  210  470  (69) (33)
All other noninterest expense (1,272) (1,193) (1,141) (79) (7)
Total noninterest expense 562  546  610  16  3 

Provision for credit losses —  —  716  —  — 
Income before income taxes 6  488  10,102  (482) (99)
Income tax expense (benefit) 37  (25) 88  62  247 
Net (loss) income $ (31) $ 513  $ 10,014  $ (544) (106)

Select Period End Balances

Deposits 45,248  42,229  39,155  3,019  7  %

Corporate net income for the current year decreased $544 million compared to the prior year, primarily reflecting lower NII, higher personnel cost, and higher income tax expense, partially offset by lower all other noninterest expense and acquisition-related expenses.
• The $452 million decrease in NII was mainly due to the impacts of a lower average balance of interest-earning deposits at banks, a higher average balance of interest-bearing deposits, and lower loan PAA, partially offset by the impacts of a higher average balance of investment securities and a lower rate paid on interest-bearing deposits.
• The $164 million increase in personnel cost was mainly due to annual merit increases and promotions, as well as net staff additions.
• The $79 million decrease in all other noninterest expense was spread amongst various accounts, including allocated expenses. Refer to the “Noninterest Expense” discussion in the “Results of Operations” section of this MD&A for further information regarding trends in consolidated noninterest expense.
• Components of the $69 million decrease in acquisition-related expenses are presented in Table 11 in the “Noninterest Expense” discussion in the “Results of Operations” section of this MD&A.

Corporate deposits were $45.25 billion at December 31, 2025, an increase of $3.02 billion compared to $42.23 billion at December 31, 2024, due to growth in Direct Bank deposits. Total deposits in Corporate primarily include $44.80 billion of Direct Bank deposits, the vast majority of which are savings accounts, along with time deposits.

BALANCE SHEET ANALYSIS

The following discussion provides additional information about the major components of our balance sheet. Information regarding our ALLL is included in the “Risk Management—Credit Risk—ALLL” and “Critical Accounting Estimates” sections of this MD&A and in Note 6—Allowance for Loan and Lease Losses. 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. 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.

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Interest-earning Deposits at Banks
Interest-earning deposits at banks are primarily comprised of interest-earning deposits at the FRB. Interest-earning deposits at banks as of December 31, 2025 totaled $19.80 billion, a decrease of $1.56 billion or 7% from $21.36 billion at December 31, 2024. The decrease from December 31, 2024 is a function of the balance sheet trends discussed above in “Executive Overview—Financial Performance Summary—Balance Sheet Highlights.”

Securities Purchased Under Agreements to Resell
Securities purchased under agreements to resell at December 31, 2025 totaled $232 million, an increase of $74 million from $158 million at December 31, 2024.

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. Other objectives include acting as a stable source of liquidity, serving as a tool for asset and liability management and maintaining an interest rate risk profile compatible with our objectives. Changes in the total balance of our investment securities portfolio result from trends in balance sheet funding and market performance. Generally, when inflows arising from deposit and treasury services products exceed loan and lease demand, we invest excess funds into the securities portfolio or into interest-earning deposits at banks. Conversely, when loan demand exceeds growth in deposits and short-term borrowings, we allow interest-earning deposits at banks to decline and use proceeds from maturing securities and prepayments to fund loan growth. Refer to Note 3—Investment Securities and “Funding, Liquidity and Capital Overview” in the “Executive Overview” section of this MD&A for additional disclosures regarding investment securities.

The carrying value of investment securities at December 31, 2025 totaled $41.56 billion, a decrease of $2.53 billion or 6% from $44.09 billion at December 31, 2024. The decrease mainly resulted from maturities, sales, and prepayments totaling $17.82 billion, partially offset by purchases of $14.36 billion, which were primarily short duration available for sale U.S. treasury and agency mortgage-backed securities. Investment securities were a primary funding source for the $2.49 billion Partial Prepayment of the Purchase Money Note in December 2025, which contributed to the decrease in investment securities.

Our portfolio of investment securities available for sale consists of mortgage-backed securities issued by government agencies and government sponsored entities, U.S. Treasury securities, corporate bonds, and municipal bonds. Investment securities available for sale are reported at fair value and unrealized gains and losses are included as a component of AOCI, net of deferred taxes. As of December 31, 2025, investment securities available for sale had a pretax net unrealized loss of $162 million, compared to $762 million as of December 31, 2024, primarily reflecting changes in interest rates. The fair value of investment securities is impacted by interest rates, credit spreads, market volatility and liquidity conditions. The fair value of the investment securities portfolio generally increases when interest rates decrease or when credit spreads tighten. Given the consistently strong credit rating of the U.S. Treasury, and the long history of no credit losses on debt securities issued by government agencies and government sponsored entities, no allowance for credit loss was required as of December 31, 2025. 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. 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. 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.

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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. Treasury $ 10,624  $ 10,673  26.4  % $ 13,897  $ 13,903  32.7  %
Government agency 44  43  0.1  79  77  0.2 
Residential mortgage-backed securities 17,683  17,623  43.6  16,161  15,620  36.7 
Commercial mortgage-backed securities 3,444  3,299  8.2  3,869  3,666  8.6 
Corporate bonds 145  140  0.3  489  467  1.1 
Municipal bonds 12  12  —  17  17  — 

Total investment securities available for sale $ 31,952  $ 31,790  78.6  % $ 34,512  $ 33,750  79.3  %
Investment in marketable equity securities $ 83  $ 127  0.3  % $ 79  $ 101  0.2  %
Investment securities held to maturity:
U.S. Treasury $ 388  $ 373  0.9  % $ 483  $ 452  1.1  %
Government agency 1,225  1,170  2.9  1,489  1,374  3.2 
Residential mortgage-backed securities 4,450  3,992  9.9  4,558  3,878  9.1 
Commercial mortgage-backed securities 3,337  2,729  6.8  3,407  2,729  6.5 

Supranational securities 246  226  0.6  300  267  0.6 
Other 1  1  —  2  2  — 
Total investment securities held to maturity $ 9,647  $ 8,491  21.1  % $ 10,239  $ 8,702  20.5  %
Total investment securities $ 41,682  $ 40,408  100.0  % $ 44,830  $ 42,553  100.0  %
(1) Calculated as a percentage of the total fair value of investment securities.

The following table presents the weighted average yields for investment securities available for sale and held to maturity at December 31, 2025, segregated by major category with ranges of contractual maturities. The weighted average yields represent the yields of the underlying securities as of the specified date, December 31, 2025, within the specified maturity range. 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.

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. Treasury 4.34  % 3.88  % —  % —  % 4.09  %
Government agency —  3.77  —  —  3.77 
Residential mortgage-backed securities (1)
—  4.44  4.33  4.15  4.20 
Commercial mortgage-backed securities (1)
4.19  4.73  5.17  2.80  3.99 
Corporate bonds 5.96  7.76  6.03  —  7.47 
Municipal bonds —  —  —  6.28  6.28 

Total investment securities available for sale 4.34  % 4.15  % 4.35  % 4.02  % 4.16  %

Investment securities held to maturity:
U.S. Treasury —  % 1.43  % —  % —  % 1.43  %
Government agency 1.40  1.63  1.95  —  1.61 
Residential mortgage-backed securities (1)
—  —  1.02  2.84  2.66 
Commercial mortgage-backed securities (1)
—  1.83  4.65  2.46  2.47 

Supranational securities —  1.64  —  —  1.64 
Other 3.46  —  —  —  3.46 
Total investment securities held to maturity 1.41  % 1.59  % 1.36  % 2.67  % 2.39  %

(1) Residential mortgage-backed and commercial mortgage-backed securities, which are not due at a single maturity date, have been included in maturity groupings based on the contractual maturity at December 31, 2025. The expected life will differ from contractual maturities because borrowers have the right to prepay the underlying loans.

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Assets Held for Sale
Assets held for sale at December 31, 2025 were $804 million, an increase of $719 million from $85 million at December 31, 2024. Consumer loans held for sale at December 31, 2024, were largely comprised of residential mortgage loans that FCB originated with the intent to sell. In December 2025, FCB management committed to a plan to sell approximately $694 million of residential mortgage loans, which were then transferred from held for investment to held for sale. We did not establish a valuation allowance for the loans transferred to held for sale as the estimated fair value exceeded amortized cost.

The composition of assets held for sale is included in the following table:

Table 23
Assets Held for Sale

dollars in millions December 31, 2025 December 31, 2024 Increase (Decrease)
Loans and leases:
Commercial (1)
$ 18 $ 27 $ (9) (33) %
Consumer 781 55 726 NM

Loans and leases 799 82 717 NM
Operating lease equipment 5 3 2 100  %
Total assets held for sale $ 804 $ 85 $ 719 NM

(1) There were nonaccrual loans held for sale of $10 million at December 31, 2025 and $0 at December 31, 2024.
NM - resulting % not meaningful.

Loans and Leases
The loan and lease disclosures at December 31, 2024 presented in this Form 10-K were recast to reflect the Loan Class Changes summarized in the “Executive Overview—Recent Events” section of this MD&A and further discussed in Note 1—Significant Accounting Policies and Basis of Presentation.

The following table presents loans and leases by loan segment and loan class, and the respective proportion to total loans:

Table 24
Loans and Leases

dollars in millions December 31, 2025 December 31, 2024
Balance % to Total Loans Balance % to Total Loans Increase (Decrease)
Commercial:
Commercial and industrial $ 44,721  30  % $ 43,559  31  % $ 1,162  3  %
Capital call lines 31,791  21  25,501  18  6,290  25 
Owner occupied commercial mortgage 17,660  12  16,842  12  818  5 
Investor dependent 2,778  2  3,193  2  (415) (13)
Commercial real estate 23,784  16  23,282  17  502  2 
Total commercial $ 120,734  81  % $ 112,377  80  % $ 8,357  7  %
Consumer:
Residential mortgage $ 21,861  15  % $ 22,768  16  % $ (907) (4) %
Revolving mortgage 2,863  2  2,567  2  296  12 
Auto 1,416  1  1,523  1  (107) (7)
Other consumer 1,056  1  986  1  70  7 
Total consumer $ 27,196  19  % $ 27,844  20  % $ (648) (2) %
Total loans and leases $ 147,930  100  % $ 140,221  100  % $ 7,709  6  %
Allowance for loan and lease losses (1,566) (1,676)
Net loans and leases $ 146,364  $ 138,545 

Loans and leases at December 31, 2025 were $147.93 billion, an increase of $7.71 billion or 6% from $140.22 billion at December 31, 2024. Loan growth in the Commercial Bank segment of $7.64 billion was mainly in Global Fund Banking and other industry verticals, primarily TMT and Healthcare. Loan growth of $71 million in the General Bank segment was primarily in Wealth, SBA, and Community Association Banking portfolios, partially offset by a transfer of $694 million residential mortgage loans to held for sale in December 2025. Changes in loans and leases within our business segments compared to December 31, 2024 are discussed in the “Results by Segment” section of this MD&A.

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The unamortized discount related to acquired loans was $1.33 billion at December 31, 2025, a decrease of $272 million from $1.60 billion at December 31, 2024.

Refer to Note 5—Loans and Leases for further information.

Operating Lease Equipment, Net

Our operating lease portfolio mostly relates to the Rail segment, with the remainder included in the Commercial Bank segment as summarized in the following table. Refer to the “Results by Segment” section of this MD&A for further details on the operating lease equipment portfolio in Rail.

Table 25
Operating Lease Equipment, Net

dollars in millions
December 31, 2025 December 31, 2024 Increase (Decrease)
Railcars and locomotives $ 8,882  $ 8,573  $ 309  4  %
Other equipment 739  750  (11) (1)
Total (1)
$ 9,621  $ 9,323  $ 298  3  %

(1)     Includes off-lease rail equipment of $257 million at December 31, 2025 and $219 million at December 31, 2024.

Interest-bearing Liabilities

Interest-bearing liabilities include interest-bearing deposits, securities sold under agreements to repurchase, and borrowings. Interest-bearing liabilities at December 31, 2025 totaled $156.93 billion, an increase of $3.29 billion or 2% from $153.65 billion at December 31, 2024. The increase from December 31, 2024 was mainly due to deposit growth, partially offset by lower borrowings as further discussed below.

Deposits
We strive to maintain a strong liquidity position, and therefore, deposit retention remains a key business objective. We believe traditional bank deposit products remain an attractive option for many customers. As economic conditions change, we recognize that our liquidity position could be adversely affected if bank deposits are withdrawn. Our ability to fund future loan growth is significantly dependent on our success in retaining existing deposits and generating new deposits at a reasonable cost.

The following table summarizes the types of deposits:

Table 26
Deposits

dollars in millions
December 31, 2025 December 31, 2024 Increase (Decrease)
Noninterest-bearing $ 40,653  $ 38,633  $ 2,020  5  %
Checking with interest 24,377  25,343  (966) (4)
Money market 38,687  35,722  2,965  8 
Savings 46,625  42,278  4,347  10 
Time 11,236  13,253  (2,017) (15)
Interest-bearing deposits 120,925  116,596  4,329  4 
Total deposits $ 161,578  $ 155,229  $ 6,349  4  %
Noninterest-bearing deposits to total deposits 25.2  % 24.9  %

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. The increase was attributable to deposit growth in Corporate of $3.02 billion (which primarily includes the Direct Bank), the General Bank segment of $1.84 billion and the Commercial Bank segment of $1.51 billion. Noninterest-bearing deposits grew by $2.02 billion or 5% compared to December 31, 2024 and represented 25.2% of total deposits as of December 31, 2025, compared to 24.9% at December 31, 2024.

Deposit changes within our business segments compared to December 31, 2024 are further discussed in the “Executive Overview—Funding, Liquidity and Capital Overview” section and “Results by Segment” section of this MD&A.
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Deposit Concentrations
BancShares operates a 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. 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.

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.

Deposit accounts with balances in excess of $50 million totaled approximately $7.09 billion as of December 31, 2025, compared to approximately $8.01 billion as of December 31, 2024.

Uninsured Deposits
The amount of uninsured deposits is estimated consistent with the methodologies and assumptions utilized in providing information to the FDIC and Federal Reserve. We estimate total uninsured deposits were $61.81 billion, which represented approximately 38.3% of total deposits at December 31, 2025, compared to $59.51 billion or 38.3% of total deposits at December 31, 2024.

Refer to the “Executive Overview—Funding, Liquidity and Capital Overview” and “Results by Segment” sections of this MD&A for further discussion of deposit composition, uninsured deposits, and recent deposit trends.

The following table provides the expected maturity of time deposits with balances in excess of $250,000 as of December 31, 2025:

Table 27
Maturities of Time Deposits In Excess of $250,000

dollars in millions December 31, 2025
Time deposits maturing in:
Three months or less $ 695 
Over three months through six months 404 
Over six months through 12 months 328 
More than 12 months 13 
Total $ 1,440 

Borrowings
Total borrowings at December 31, 2025 were $36.01 billion, a decrease of $1.04 billion or 3% from $37.05 billion at December 31, 2024. The decrease from December 31, 2024 primarily related to the 2025 Debt Redemptions, which included a Partial Prepayment of the Purchase Money Note, partially offset by the 2025 Debt Issuances. Refer to the “Executive Overview—Recent Events” section earlier in this MD&A for further detail on the 2025 Debt Redemptions and 2025 Debt Issuances.

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The following table presents borrowings, net of the respective unamortized purchase accounting adjustments, premiums, discounts, and issuance costs:

Table 28
Borrowings

dollars in millions
December 31, 2025 December 31, 2024 Increase (Decrease)
Securities sold under agreements to repurchase $ 224  $ 367  $ (143) (39) %

Federal Deposit Insurance Corporation
   3.500% fixed rate note due March 2028 (1)
33,385  35,816  (2,431) (7)
Senior Unsecured Borrowings

5.231% fixed-to-floating rate notes due March 2031 (2)
497  —  497  100 
   6.000% fixed rate notes due April 2036 58  58  —  — 
Subordinated debt
6.125% fixed rate notes due March 2028 430  445  (15) (3)

3.375% fixed-to-floating rate notes due March 2030 (3)
—  350  (350) (100)
5.600% fixed rate reset notes due September 2035 (4)
597  —  597  100 
6.254% fixed-to-fixed rate notes due March 2040 (5)
745  —  745  100 

Capital lease obligations 72  15  57  380 
Total borrowings $ 36,008  $ 37,051  $ (1,043) (3) %

(1) Issued in connection with the SVBB Acquisition and secured by collateral. Refer to Note 2—Business Combinations and Note 5—Loans and Leases. The unamortized discount was $115 million and $176 million at December 31, 2025 and December 31, 2024, respectively.
(2) The fixed rate period will end on March 12, 2030, and the notes will thereafter bear a floating interest rate equal to a benchmark rate based on the Compounded Secured Overnight Financing Rate (“SOFR”) Index Rate plus 141 bps per annum until the maturity date (or date of earlier redemption).
(3) The fixed rate period ended on March 15, 2025, and the notes converted to a floating interest rate equal to Three-Month Term SOFR plus 246.5 bps per annum. The notes included a callable feature and were redeemed on June 15, 2025.
(4) The interest rate will reset on September 5, 2030, and the notes will thereafter bear a fixed interest rate equal to the Five-year U.S. Treasury Rate as of the day falling two business days prior to the notes reset date plus 185 bps per annum until the maturity date (or date of earlier redemption).
(5) The interest rate will reset on March 12, 2035, and the notes will thereafter bear a fixed interest rate equal to the Five-year U.S. Treasury Rate as of the day falling two business days prior to the notes reset date plus 197 bps per annum until the maturity date (or date of earlier redemption).

The following summarizes the 2025 Debt Issuances:

Table 29
Parent Company Notes Issued

Issuance Date Amount Description
September 5, 2025 $600 Million $600 million aggregate principal amount of subordinated fixed rate reset notes with a maturity date of September 5, 2035. Interest is payable semi-annually in arrears on March 5 and September 5 of each year, beginning on March 5, 2026, and ending on the maturity date (or date of earlier redemption), at a fixed rate of 5.6000% per annum. The interest rate will reset on September 5, 2030 and the notes will thereafter bear a fixed interest rate equal to the Five-year U.S. Treasury Rate as of the day falling two business days prior to the notes reset date plus 185 bps per annum until the maturity date (or date of earlier redemption).

March 12, 2025 $500 Million $500 million aggregate principal amount of senior fixed-to-floating rate notes with a maturity date of March 12, 2031. Interest is payable semi-annually in arrears on March 12 and September 12 of each year, beginning on September 12, 2025, and ending on March 12, 2030 (or date of earlier redemption), at a fixed rate of 5.231% per annum. The fixed rate period will end on March 12, 2030, and the notes will thereafter bear a floating interest rate equal to a benchmark rate based on the Compounded SOFR plus 141 bps per annum until the maturity date (or date of earlier redemption). During the floating rate period, interest on the notes will be payable quarterly in arrears on June 12, 2030, September 12, 2030, December 12, 2030, and on the maturity date (or date of earlier redemption).
March 12, 2025 $750 Million $750 million aggregate principal amount of subordinated fixed-to-fixed rate notes with a maturity date of March 12, 2040. Interest is payable semi-annually in arrears on March 12 and September 12 of each year and on the maturity date (or date of earlier redemption), commencing on September 12, 2025, at a fixed rate of 6.254% per annum. The interest rate will reset on March 12, 2035, and the notes will thereafter bear a fixed interest rate equal to the Five-year U.S. Treasury Rate as of the day falling two business days prior to the notes reset date plus 197 bps per annum until the maturity date (or date of earlier redemption).

We continually monitor our capital needs and market conditions in an effort to diversify our borrowing base and capital mix when appropriate. Additionally, we continue to monitor the status of the proposed interagency rule for new long term debt that has not been finalized as mentioned in the “Regulatory Considerations—Enhanced Prudential Standards” section in Item 1. Business of this Form 10-K.

Refer to the “Risk Management—Liquidity Risk” section of this MD&A and Note 12—Borrowings for further information regarding liquidity and borrowings.

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Other Assets and Liabilities    

The following table includes the components of other assets:

Table 30
Other Assets

dollars in millions
December 31, 2025 December 31, 2024 Increase (Decrease)
Affordable housing tax credit and other unconsolidated investments (1)
$ 2,955  $ 2,516  $ 439  17  %
Accrued interest receivable 912  902  10  1 
Fair value of derivative financial instruments 534  660  (126) (19)
Pension and other retirement plan assets 784  658  126  19 
Right of use assets for operating leases, net 294  316  (22) (7)
Income tax assets 510  511  (1) — 
Counterparty receivables 124  69  55  80 
Bank-owned life insurance 108  106  2  1 
Nonmarketable investments 167  127  40  32 
Other real estate owned 119  56  63  115 
Mortgage servicing rights 32  27  5  17 
Federal Home Loan Bank stock 20  20  —  — 
Other 964  772  192  25 
Total other assets $ 7,523  $ 6,740  $ 783  12  %

(1)     Refer to Note 10—Variable Interest Entities for additional information.

The following table includes the components of other liabilities:

Table 31
Other Liabilities

dollars in millions
December 31, 2025 December 31, 2024 Increase (Decrease)
Income tax liabilities $ 3,819  $ 3,669  $ 150  4  %
Commitments to fund tax credit investments 1,321  1,214  107  9 
Accrued personnel cost 1,042  1,024  18  2 
Fair value of derivative financial instruments 494  625  (131) (21)
Lease liabilities 329  357  (28) (8)
Reserve for off-balance sheet credit exposure 260  278  (18) (7)
Accrued interest payable 140  134  6  5 
Accounts payable and other 1,321  895  426  47 
Total other liabilities $ 8,726  $ 8,196  $ 530  7  %

A reserve for off-balance sheet credit exposure is established for unfunded commitments and is included in other liabilities. 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. Refer to the “Results of Operations—Provision for Credit Losses” section of this MD&A for further discussion. Refer to Note 22—Commitments and Contingencies for information relating to off-balance sheet commitments.

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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. 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. 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. 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. Our Chief Risk Officer also provides regular reports to the Risk Committee and the Board. Management and independent risk functions make regular reports to the Risk Committee on key risk areas, including credit, market, capital, liquidity, operational, compliance, and strategic risks. The Risk Committee also reviews reports of examination by and communications from regulatory agencies, the results of internal and third-party testing and qualitative and quantitative assessments related to risk management, and any other matters within the scope of the Risk Committee’s oversight responsibilities. The Risk Committee monitors management’s response to certain risk-related regulatory and audit issues. In addition, the Risk Committee may coordinate with the Board’s Audit Committee, Technology Committee and the Compensation, Nominations and Governance Committee for the review of financial statements and related risks, technology and cybersecurity risk, compensation risk management, and other areas of responsibility.

BancShares leverages a Three Lines Model to promote clarity of roles and responsibilities in managing risk. The first line is comprised of organizational functions that own or support the management of risk. The second line is led by the Chief Risk Officer, who reports to the Risk Committee of the Board, and is comprised of organizational functions that make up the Risk Management Department which has the responsibility for establishing risk frameworks, policies, standards, and procedures which support the Framework; providing proactive, transparent, and independent oversight and effective challenge of the first line; and identifying, measuring, monitoring, or controlling for aggregate risks. Internal audit is independent of the first and second lines, reporting directly to the Audit Committee of the Board and constitutes the third line.

In combination with other risk management and monitoring practices, enterprise-wide stress testing activities are conducted within a defined framework. 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.

BancShares has been assessing the emerging impacts of recent and potential U.S. and international tariffs and other retaliatory actions and has continued monitoring the international tensions that could impact the economy and exacerbate headwinds of elevated market volatility, global supply chain disruptions, and recessionary pressures. BancShares also continues to assess operational risks such as those associated with potential cyberattacks for FCB and third parties upon whom it relies. Assessments have not identified material impacts to date, but those assessments will remain ongoing as the conditions continue to exist and develop. BancShares is also assessing the potential risk of an economic slowdown or recession that could create increased credit and market risk having downstream impacts on earnings, capital, and/or liquidity. While economic data continues to be mixed, baseline economic forecasts reflect a decline in CRE property values due to current interest rate levels that impacted the ALLL forecasts. Key indicators will continue to be monitored, and impacts assessed as part of our ongoing Risk Management Framework.

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Credit Risk

Credit risk is the risk arising from a borrower, obligor, or counterparty’s failure to meet the terms of any financial obligation, which can result in financial impact to current or anticipated earnings or capital, or strategic objectives. 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. Our independent credit review function conducts risk reviews and analyses of both originated and acquired loans to ensure compliance with credit policies and to monitor asset quality trends and borrower financial strength. These reviews include portfolio analysis by geographic location, industry, collateral type, and product. We strive to identify potential problem loans as early as possible, to record charge-offs as appropriate and to maintain an appropriate ALLL that accounts for expected losses over the life of the loan and lease portfolios.

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. When commercial loans and leases are graded during underwriting, or when updated periodically thereafter, a model is run to generate a preliminary risk rating. These models incorporate both internal and external historical default and loss data, as well as other borrower and loan characteristics, to assign a risk rating. The preliminary risk rating assigned by the model can be adjusted as a result of borrower specific facts and circumstances that, in management’s judgment, warrant a modification of the modeled risk rating to arrive at the final approved risk ratings.

Consumer Lending
Consumer lending begins with an evaluation of a consumer borrower’s credit profile against published standards. Credit decisions are made after analyzing quantitative and qualitative factors to assess the borrower’s ability to repay the loan, and secondary sources of repayment, such as collateral value.

Consumer products use traditional and measurable standards to document and assess the creditworthiness of a loan applicant. Credit standards follow industry standard documentation requirements. Performance is largely evaluated based on an acceptable pay history along with a quarterly assessment which incorporates current market conditions. Loans may also be monitored during quarterly reviews of the borrower’s refreshed credit score. When warranted, an additional review of the loan-to-value of the underlying collateral may be conducted.

ALLL
The loan and ALLL disclosures for the 2024 and 2023 periods presented in this Form 10-K were recast to reflect the Loan Class Changes summarized in the “Executive Overview—Recent Events” section of this MD&A and further discussed in Note 1—Significant Accounting Policies and Basis of Presentation.

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 ALLL methodology is discussed further in the section entitled “Critical Accounting Estimates” of the MD&A and Note 1—Significant Accounting Policies and Basis of Presentation.
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The following table summarizes the ALLL for commercial, consumer and total loans.

Table 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. The ALLL reserve release was $71 million in the prior year. The ALLL as a percentage of loans was 1.06% at December 31, 2025, a decrease of 14 bps from 1.20% at December 31, 2024.

The following table summarizes the ALLL as a percentage of loans for each loan class:

Table 33
ALLL by Loan Class

dollars in millions December 31, 2025 December 31, 2024
ALLL Loan Balance ALLL as a Percentage of Loans ALLL Loan Balance ALLL as a Percentage of Loans
Commercial
Commercial and industrial $ 807  $ 44,721  1.80  % $ 815  $ 43,559  1.87  %
Capital call lines 29  31,791  0.09  44  25,501  0.17 
Owner occupied commercial mortgage 50  17,660  0.28  51  16,842  0.30 
Investor dependent 181  2,778  6.52  195  3,193  6.10 
Commercial real estate 369  23,784  1.55  413  23,282  1.77 

Total commercial 1,436  120,734  1.19  1,518  112,377  1.35 
Consumer
Residential mortgage 67  21,861  0.31  85  22,768  0.37 
Revolving mortgage 26  2,863  0.89  21  2,567  0.83 
Auto 9  1,416  0.67  5  1,523  0.35 
Other consumer 28  1,056  2.62  47  986  4.75 
Total consumer 130  27,196  0.48  158  27,844  0.56 

Total $ 1,566  $ 147,930  1.06  % $ 1,676  $ 140,221  1.20  %

The ALLL may vary significantly from period to period due to changes in economic conditions, economic forecasts and the composition and credit quality of the loan and lease portfolio, and the related impacts to the ALLL models. We continuously monitor and update our ALLL estimation methodology, as appropriate. During 2025, we updated our PD, LGD, and exposure at default methodology for the capital call lines, investor dependent, residential mortgage, revolving mortgage, auto and consumer other portfolios, which contributed to the changes in the ALLL compared to December 31, 2024 for those portfolios.

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Net Charge-Offs
The following table summarizes net charge-offs for each loan class:

Table 34
Net Charge-Offs

dollars in millions Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023
Charge-offs Recoveries Net
charge-offs (recoveries) Charge-offs Recoveries Net
charge-offs (recoveries) Charge-offs Recoveries Net
charge-offs (recoveries)
Commercial
Commercial and industrial $ 453  $ 52  $ 401  $ 294  $ 51  $ 243  $ 340  $ 51  $ 289 
Capital call lines —  —  —  —  —  —  —  —  — 
Owner occupied commercial mortgage 7  —  7  12  —  12  1  1  — 
Investor dependent 125  35  90  204  49  155  172  12  160 
Commercial real estate 123  1  122  117  3  114  97  1  96 
Total commercial 708  88  620  627  103  524  610  65  545 
Consumer
Residential mortgage 7  5  2  1  5  (4) 2  6  (4)
Revolving mortgage —  1  (1) 1  2  (1) —  1  (1)
Auto 5  2  3  6  2  4  4  1  3 
Other consumer 21  5  16  22  5  17  22  5  17 
Total consumer 33  13  20  30  14  16  28  13  15 
Total $ 741  $ 101  $ 640  $ 657  $ 117  $ 540  $ 638  $ 78  $ 560 

Net charge-offs for the current year were $640 million, an increase of $100 million from $540 million for the prior year, primarily due to an increase of $158 million in commercial and industrial, partially offset by a decrease of $65 million in investor dependent. The increase of $158 million in commercial and industrial net charge-offs mainly includes the previously discussed $82 million charge-off on a single supply chain finance client, and modest increases in the Commercial Finance and Tech and Finance lines of business in the Commercial Bank segment. At December 31, 2025, the total balance of our supply chain finance portfolio was approximately $270 million.

Nonperforming Assets
Nonperforming assets include nonaccrual loans and leases, other real estate owned (“OREO”) and repossessed assets. Accounting policies related to nonperforming assets are discussed in Note 1—Significant Accounting Policies and Basis of Presentation in this Form 10-K.

Table 35
Non-Performing Assets

dollars in millions December 31, 2025 December 31, 2024
Nonaccrual loans:
Commercial loans $ 1,082  $ 1,008 
Consumer loans 225  176 
Total nonaccrual loans 1,307  1,184 
Other real estate owned (1) and repossessed assets
124  64 
Total nonperforming assets $ 1,431  $ 1,248 

Total loans and leases $ 147,930  $ 140,221 
Total loans and leases, other real estate owned, and repossessed assets 148,054  140,285 
ALLL to total loans and leases 1.06  % 1.20  %
Ratio of total nonperforming assets to total loans, leases, other real estate owned and repossessed assets 0.97  0.89 
Ratio of nonaccrual loans and leases to total loans and leases 0.88  0.84 
Ratio of ALLL to nonaccrual loans and leases 119.80  141.58 

(1) Other real estate owned includes former branch property and other non-foreclosed property of $26 million as of December 31, 2025 and 2024.

OREO and repossessed assets were $124 million at December 31, 2025 compared to $64 million at December 31, 2024. The increase of $60 million compared to December 31, 2024 mainly reflects foreclosures on CRE properties. Trends in past due and nonaccrual loans are discussed below.
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Past Due and Nonaccrual Loans
Past due and nonaccrual loans by loan class are summarized in the following table:

Table 36
Delinquencies and Nonaccrual Loans

dollars in millions December 31, 2025 December 31, 2024
Accruing Loans Accruing loans
30-59 Days
Past Due
60-89 Days
Past Due
Total 30-89 Days Past Due 90 Days or
Greater
Nonaccrual Loans 30-59 Days
Past Due
60-89 Days
Past Due
Total 30-89 Days Past Due 90 Days or
Greater
Nonaccrual Loans
Commercial
Commercial and industrial $ 232  $ 56  $ 288  $ 63  $ 456  $ 203  $ 50  $ 253  $ 17  $ 420 
Capital call lines —  —  —  —  —  —  —  —  —  — 
Owner occupied commercial mortgage 78  19  97  1  159  30  9  39  2  62 
Investor dependent 11  1  12  —  49  11  1  12  —  87 
Commercial real estate 221  31  252  171  418  65  30  95  79  439 
Total commercial 542  107  649  235  1,082  309  90  399  98  1,008 
Consumer —  —  —  — 
Residential mortgage 168  42  210  7  179  172  25  197  7  143 
Revolving mortgage 25  4  29  —  35  20  4  24  —  24 
Auto 15  3  18  —  9  12  3  15  —  8 
Other consumer 5  3  8  2  2  5  3  8  3  1 
Total consumer 213  52  265  9  225  209  35  244  10  176 
Total $ 755  $ 159  $ 914  $ 244  $ 1,307  $ 518  $ 125  $ 643  $ 108  $ 1,184 

The increase of $271 million in accruing loans that are 30 to 89 days past due is largely attributable to increases of $157 million in commercial real estate and $58 million in owner occupied commercial mortgage. Accruing loans that are 30 to 89 days past due are early stage delinquencies that are not showing signs of significant credit deterioration. Delinquency status is considered in the estimate of the ALLL.

The increase of $136 million in accruing loans that are 90 days or greater past due is primarily attributable to increases of $92 million in commercial real estate and $46 million in commercial and industrial, partially offset by net decreases in all other loan classes. The increases are mainly due to a small number of larger balance and well-secured loans for which we expect payment of principal and interest. Loans 90 days or greater past due are assigned a more severe PD in accordance with our ALLL methodology.

Nonaccrual loans and leases at December 31, 2025 were $1.31 billion, an increase of $123 million compared to $1.18 billion at December 31, 2024, mainly due to increases of $97 million in owner occupied commercial mortgage, $36 million in commercial and industrial, and $36 million in residential mortgage, partially offset by decreases of $38 million in investor dependent and $21 million in commercial real estate. Nonaccrual loans over an established threshold are individually evaluated for specific ALLL reserves as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation.

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Commercial Real Estate Portfolio Composition
Our CRE portfolio is diversified across various property types. The following table provides an overview of the property type exposures within our CRE portfolio:

Table 37
Commercial Real Estate Portfolio

dollars in millions December 31, 2025
Balance % to Total Loans and Leases
Multi-family $ 5,195  3.5  %
Medical office 3,502  2.4 
Industrial, including warehouses 3,315  2.2 
General office 2,000  1.4 
Retail 1,632  1.1 
Healthcare 1,382  0.9 
Hotel and motel 849  0.6 
Other 5,909  4.0 
Total commercial real estate $ 23,784  16.1  %

Evolving macroeconomic and social conditions (including the shift to hybrid work arrangements) may result in changes for general office demand moving forward. Our general office portfolio has experienced more negative credit quality trends relative to our other CRE portfolios. Our general office portfolio is 1.35% of total loans and leases and 8.41% of total CRE at December 31, 2025. Select metrics for our general office portfolio are summarized in the following table:

Table 38
General Office Portfolio

dollars in millions December 31, 2025

General office as a percentage of total loans and leases 1.35   %
General office as a percentage of CRE loans 8.41   %

Net charge-offs as a percentage of general office 4.44   %
Percentage of general office 30 days or more past due 11.48   %
Nonaccrual loans as a percentage of general office
10.17   %
ALLL as a percentage of general office 3.51   %

Concentration
We strive to minimize the risks associated with large concentrations within specific geographic areas, collateral types or industries. Despite our focus on diversification, several characteristics of our loan portfolio subject us to concentration risk. Loan concentration for our commercial and consumer loans is summarized below.

Commercial Loan Concentration

Industry Concentration
The following table summarizes the industry concentration of our commercial loans and leases based the obligors’ industries:

Table 39
Commercial Loans and Leases - Industry

dollars in millions December 31, 2025 December 31, 2024
Finance and insurance $ 38,417  31.8  % $ 31,162  27.7  %
Real estate 17,911  14.8  17,905  15.9 
Healthcare 11,155  9.2  11,053  9.8 
Information 9,699  8.0  9,569  8.5 
Business services 9,601  8.0  9,089  8.1 
Transportation, communication, gas, utilities 7,567  6.3  8,175  7.3 
Manufacturing 7,137  5.9  7,160  6.4 
Retail 4,329  3.6  4,141  3.7 
Service industries 4,274  3.5  4,124  3.7 
Wholesale 3,571  3.0  3,437  3.1 
Other 7,073  5.9  6,562  5.8 
Total $ 120,734  100.0  % $ 112,377  100.0  %

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Loans to non-depository financial institutions (“NDFIs”)
Loans to borrowers in the finance and insurance industry were $38.42 billion, or 31.8% of commercial loans and leases at December 31, 2025, compared to $31,162 or 27.7% of commercial loans and leases at December 31, 2024. Loans to NDFIs comprise 97.9% of our loans to borrowers in the finance and insurance industry. Our NDFI portfolio composition is described below.

As of December 31, 2025, loans to NDFIs were approximately $37.59 billion. Capital call lines comprise $31.79 billion, or 85%, of the NDFI portfolio. The primary source of repayment for capital call lines is the capital commitments of the underlying limited partner (“LP”) investors in funds managed by certain private equity and venture capital firms. Capital calls are contractual obligations of the LPs and are not subject to the performance of the underlying portfolio of investments. 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. The credit quality is strong for capital call lines based on the structural protection provided by the funds and the underlying investors. Capital call lines have a significantly lower loss rate relative to our other loan portfolios. As of December 31, 2025, the ALLL was 0.09% of capital call lines, compared to 1.06% of total loans.

The loans to NDFIs that are not capital call lines (the “Other NDFI Portfolios”) have balances totaling approximately $5.80 billion at December 31, 2025, and the largest portfolios are described below:
• The net asset value (“NAV”) portfolio ($1.63 billion) consists of: (i) loans to private equity funds collateralized by the funds’ portfolios of direct equity investments in private companies, and (ii) loans to predominantly secondary funds collateralized by the funds’ portfolios of investments in LP interests in private funds and/or co-investment vehicles.
• Leveraged fund lines ($970 million) are lines of credit provided to private credit funds and are collateralized by portfolios of the underlying assets, primarily first lien loans.
• Warehouse lines ($871 million) are asset-based lines of credit that finance cash flows for large pools of assets, such as accounts receivable and loans, that the borrower (or sponsor) typically sell or transfer to special purpose vehicle entities.
• Specialty finance ($726 million) includes asset-based lending facilities to lenders that are primarily investing in first lien senior debt.
The Other NDFI Portfolios are included in commercial and industrial loans and leases. As of December 31, 2025, the ALLL was 1.80% of commercial and industrial loans and leases.

NDFIs could be subject to a less stringent regulatory environment than IDIs or BHCs as further discussed in Item 1A. Risk Factors of this Form 10-K. We strive to mitigate the credit risk of our loans to NDFIs through our underwriting and credit monitoring processes. As discussed above, approximately 85% of our NDFI portfolio at December 31, 2025 is comprised of capital call lines which have strong credit quality based on the structural protection provided by the funds and the underlying investors. Additionally, we establish advance rates (the percentage of the collateral value FCB will lend to the borrower) for loans in the Other NDFI Portfolios commensurate with the risks of the underlying collateral type, structural protection of the funds or investors, diversification of the funds, and financial strength of the borrower (or sponsor).

Real estate secured loans
Our CRE portfolio comprises the vast majority of the real estate industry loans in the table above, which is based on the industry of the obligor. Additionally, we have CRE and owner occupied commercial mortgage loans that are secured by real estate, but are categorized in other industries in the table above. At December 31, 2025, the combined balances of our CRE and owner occupied commercial mortgage loans were $41.44 billion, or 34% of commercial loans and leases, compared to $40.12 billion or 36% at December 31, 2024. We have historically carried a concentration of real estate secured loans, but actively mitigate exposure through underwriting policies, which primarily rely on borrower cash flow rather than underlying collateral values. When we do rely on underlying real property values, we prefer financing secured by owner-occupied real property.

Healthcare and information industries
The healthcare and information industries in the table above largely consist of the healthcare, life sciences, and technology sectors, which include clients in our Commercial Finance, Global Fund Banking, and Tech and Healthcare lines of business within our Commercial Bank segment. 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. Loans and leases to borrowers in the information industry were $9.70 billion as of December 31, 2025, which represents 8.0% of commercial loans and leases, compared to $9.57 billion or 8.5% of commercial loans and leases at December 31, 2024. We actively mitigate credit risk exposure of these industry concentrations through our underwriting policies that emphasize reliance on adequate levels of borrower repayment sources.

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Larger Balance Loans
The following table provides a summary of commercial loans by loan size and loan class as of December 31, 2025:

Table 40
Commercial Loans by Size and Class

dollars in millions Less Than $10 Million $10 Million to $30 Million Greater Than $30 Million Total Commercial Loans
Commercial and industrial $ 16,337  $ 12,077  $ 16,307  $ 44,721 
Capital call lines 1,174  3,330  27,287  31,791 
Owner occupied commercial mortgage 14,792  2,187  681  17,660 
Investor dependent 1,636  896  246  2,778 
Commercial real estate 8,561  6,706  8,517  23,784 
Total $ 42,500  $ 25,196  $ 53,038  $ 120,734 

Most of our loans greater than $30 million at December 31, 2025 are capital call lines which are described above in “Loans to non-depository financial institutions (“NDFIs”).”

Geographic Concentrations
The following table summarizes geographic concentrations based on the location of the real estate collateral for owner occupied commercial mortgage and commercial real estate loans, and based on the obligor address for all other commercial loans.

Table 41
Commercial Loans and Leases - Geography

dollars in millions December 31, 2025 December 31, 2024
State
California $ 26,056  21.6  % $ 24,363  21.7  %
New York 12,193  10.1  10,154  9.0 
North Carolina 11,005  9.1  11,122  9.9 
Texas 8,811  7.3  8,417  7.5 
Massachusetts 7,325  6.1  7,249  6.4 
Florida 6,175  5.1  6,091  5.4 
All other states 46,093  38.2  42,446  37.8 
Total U.S. $ 117,658  97.5  % $ 109,842  97.7  %
Total international 3,076  2.5  2,535  2.3 
Total $ 120,734  100.0  % $ 112,377  100.0  %

Consumer Loan Concentration
Loan concentrations may exist when multiple borrowers could be similarly impacted by economic or other conditions. The following table summarizes state concentrations greater than 5.0% of consumer loans based on customer address:

Table 42
Consumer Loans - Geography

dollars in millions December 31, 2025 December 31, 2024
State
California $ 8,118  29.8  % $ 8,615  31.0  %
North Carolina 6,736  24.8  6,716  24.1 
South Carolina 3,502  12.9  3,509  12.6 
Massachusetts 1,597  5.9  1,683  6.0 
Other states 7,243  26.6  7,321  26.3 
Total $ 27,196  100.0  % $ 27,844  100.0  %

Asset Risk
Asset risk is a form of price risk that is a primary risk of our leasing businesses. This relates to the risk to earning capital arising from changes in the value of owned leasing equipment. Refer to Note 7—Leases . Asset risk in our leasing business is evaluated and managed in the divisions and overseen by risk management processes. In our asset-based lending business, we also use residual value guarantees to mitigate or partially mitigate exposure to end of lease residual value exposure on certain of our finance leases. Our business process consists of: (1) setting residual values at transaction inception, (2) systematic periodic residual value reviews, and (3) monitoring levels of residual realizations. Residual realizations, by business and product, are reviewed as part of the quarterly financial and asset quality review. Reviews for impairment are performed at least annually.
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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. 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. 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.

Interest rate risk management
BancShares is exposed to the risk that changes in market conditions may affect interest rates and negatively impact earnings. The risk arises from the nature of BancShares’ business activities, the composition of BancShares’ balance sheet, and changes in the level or shape of the yield curve. 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. We evaluate and monitor interest rate risk primarily through two metrics.
• Net Interest Income Sensitivity (“NII Sensitivity”) measures the net impact of hypothetical changes in interest rates on forecasted NII; and
• Economic Value of Equity (“EVE”) Sensitivity (“EVE Sensitivity”) measures the net impact of these hypothetical changes on the value of equity by assessing the economic value of assets, liabilities and off-balance sheet instruments.

BancShares uses a holistic process to measure and monitor both short term and long term risks, which includes, but is not limited to, gradual and immediate parallel rate shocks, changes in the shape of the yield curve, and changes in the relationship of various yield curves. NII Sensitivity generally focuses on shorter term earnings risk, while EVE Sensitivity assesses the longer-term risk of the existing balance sheet.

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.

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. Interest rate swaps are the primary type of derivative instrument that we use as part of our interest rate risk management strategy. These derivatives hedge interest income variability of floating rate loans indexed to SOFR. 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. Market rates are the key factors of deposit costs, and we continue to optimize deposit costs by improving our deposit mix. Changes in interest rates, expected funding needs, as well as actions by competitors, can affect our deposit taking activities and deposit pricing. 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. 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. The below simulations assume an immediate 100 and 200 bps parallel increase and decrease from current interest rates.
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Table 43
NII Sensitivity Simulation Analysis

Estimated (Decrease) Increase in NII
Change in interest rate (bps) December 31, 2025 December 31, 2024
-200 (11.3)  % (10.6)  %
-100 (5.8) (6.1)
+100 6.5  6.9 
+200 13.6  11.1 

NII Sensitivity metrics at December 31, 2025, compared to December 31, 2024, were primarily affected by balance sheet growth and compositional changes, as well as impacts from lower market interest rates.

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. 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. Deposit beta is the portion of a change in the federal funds rate that is passed on to the deposit rate. Actual deposit betas may be different than modeled, depending on various factors, including liquidity requirements, deposit mix and competitive pressures. Impacts to NII Sensitivity may change due to actual results differing from modeled expectations.

As noted above, EVE Sensitivity supplements NII simulations as it estimates risk exposures beyond a twelve-month horizon. EVE Sensitivity measures the change in the EVE due to changes in assets, liabilities, and off-balance sheet instruments in response to a change in interest rates. EVE Sensitivity was calculated by estimating the change in the net present value of assets, liabilities, and off-balance sheet items under various rate movements, including utilizing a dynamic rate level dependent modeling approach for our deposit attrition assumption. In addition to interest rate changes, other key assumptions used in our EVE Sensitivity simulations include asset prepayments, as well as balance attrition and pricing of non-maturity deposits.

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. Scenarios that impact balance sheet composition or the sensitivity to key assumptions are also evaluated.

We use results of our various interest rate risk analyses to formulate and implement asset and liability management strategies, in coordination with the Asset and Liability Committee, to achieve the desired risk profile, while managing our objectives for market risk and other strategic objectives. Specifically, we may manage our interest rate risk position through certain pricing strategies and product design for loans and deposits, our investment portfolio, funding portfolio, or by using derivatives to mitigate earnings volatility.

The above sensitivities provide an estimate of our interest rate sensitivity; however, they do not account for potential changes in credit quality, size, mix, or changes in the competition for business in the industries we serve. They also do not account for other business developments and other actions. Accordingly, we can give no assurance that actual results would not differ materially from the estimated outcomes of our simulations.

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Loan Maturity and Loan Interest Rate Sensitivity
The following table provides loan maturity distribution information:

Table 45
Loan Maturity Distribution

dollars in millions At December 31 2025, Maturing
Within
One Year One to Five
Years Five to 15
Years After 15 Years Total
Commercial
Commercial and industrial $ 12,644  $ 25,967  $ 5,306  $ 804  $ 44,721 
Capital call lines 31,650  141  —  —  31,791 
Owner occupied commercial mortgage 1,917  8,938  6,352  453  17,660 
Investor dependent 1,181  1,597  —  —  2,778 
Commercial real estate 5,519  14,162  2,894  1,209  23,784 
Total commercial 52,911  50,805  14,552  2,466  120,734 
Consumer
Residential mortgage 655  2,780  7,460  10,966  21,861 
Revolving mortgage 47  185  1,099  1,532  2,863 
Consumer auto 324  953  139  —  1,416 
Consumer other 320  616  115  5  1,056 
Total consumer 1,346  4,534  8,813  12,503  27,196 
Total loans and leases $ 54,257  $ 55,339  $ 23,365  $ 14,969  $ 147,930 

As noted above, approximately 65% of our total loans have floating contractual reference rates, indexed primarily to SOFR and the U.S. prime rate. The following table provides information regarding fixed and variable interest rate loans and leases maturing one year or after, as of December 31, 2025:

Table 46
Fixed and Variable Interest Rate Loans

dollars in millions Loans Maturing One Year or After with
Fixed Interest Rates Variable Interest Rates
Commercial
Commercial and industrial $ 10,354  $ 21,723 
Capital call lines —  141 
Owner occupied commercial mortgage 13,818  1,925 
Investor dependent 4  1,593 
Commercial real estate 8,207  10,058 
Total commercial 32,383  35,440 
Consumer
Residential mortgage 8,561  12,645 
Revolving mortgage 28  2,788 
Consumer auto 1,092  — 
Consumer other 283  453 
Total consumer 9,964  15,886 
Total loans and leases $ 42,347  $ 51,326 

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Counterparty Risk
We enter into interest rate and foreign exchange derivatives as part of our overall risk management practices and also on behalf of our clients. 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. We seek to control credit risk of derivative agreements through counterparty credit approvals, pre-established exposure limits and monitoring procedures, which are integrated with our cash and issuer related credit processes.

Derivative agreements for BancShares’ risk management purposes and for the hedging of client transactions are primarily executed with investment grade financial institutions, with others cleared through certain central party clearing houses. Credit exposure is mitigated via the exchange of collateral between the counterparties covering mark-to-market valuations. Client related derivative transactions, which are primarily related to lending activities, are incorporated into our loan underwriting and reporting processes.

Liquidity Risk

Liquidity risk is the risk arising from BancShares being unable to meet its obligations as they come due because of an inability to: (i) liquidate assets or obtain adequate funding, or (ii) unwind or offset specific exposures without significantly lowering market prices because of inadequate market depth or market disruptions. This may result in impairment of safety and soundness.

Our liquidity risk management and monitoring process is designed to ensure the availability of adequate cash and collateral resources and funding capacity to meet our obligations. Our overall liquidity management strategy is intended to ensure appropriate liquidity to meet expected and contingent funding needs under both normal and stressed environments. 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.

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. Stress test results inform our business strategy, risk appetite, levels of liquid assets, and contingency funding plans. Also included among our liquidity measurement tools are key risk indicators that assist in identifying potential liquidity risk and stress events.

BancShares maintains a framework to establish liquidity risk tolerances, monitoring, and breach escalation protocol to alert management of potential funding and liquidity risks and to initiate mitigating actions as appropriate. Further, BancShares maintains a contingent funding plan, which details protocols and potential actions to be taken under liquidity stress conditions.

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Liquidity includes available cash and HQLS. At December 31, 2025 we had $56.01 billion of high-quality liquid assets (24.4% of total assets) and $30.74 billion of contingent liquidity sources available. Some of the more significant changes from December 31, 2024 included increased borrowing capacity under agreements with the FRB through expansion of the eligible loan population to targeted loans previously not pledged to the FRB. As noted below, the draw period under the Advance Facility Agreement with the FDIC ended March 27, 2025, as of which date, FCB had no outstanding amounts under the facility. Other significant changes are discussed above in “Executive Overview—Financial Performance Summary—Balance Sheet Highlights.” Investment securities were a primary funding source for the $2.49 billion Partial Prepayment of the Purchase Money Note in December 2025, which contributed to the decline in HQLS.

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, 2025 and December 31, 2024.
(3)     Refer to Table 48 for additional details.
(4)     The Advance Facility Agreement with the FDIC was obtained in connection with SVBB Acquisition and the draw period ended on March 27, 2025.

We fund our operations through deposits and borrowings. Our primary source of liquidity is derived from our various deposit channels, including our Branch Network and Direct Bank. 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. Total borrowings at December 31, 2025 were $36.01 billion, a decrease of $1.04 billion or 3% from $37.05 billion at December 31, 2024. Refer to details of debt redemptions and issuances in the “Executive Overview—Recent Events” section of this MD&A. We continually monitor our capital needs and market conditions in an effort to diversify our borrowing base and capital mix when appropriate.

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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 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.

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.

FRB Capacity
Under borrowing arrangements with the FRB, FCB has access to $12.96 billion on a secured basis at December 31, 2025. During 2025, we pledged additional loan collateral and increased our borrowing capacity under agreements with the FRB. Loans pledged are disclosed in Note 5—Loans and Leases. There were no outstanding borrowings with the FRB Discount Window at December 31, 2025, September 30, 2025 and December 31, 2024.

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. There were no amounts outstanding at the end of the draw period on March 27, 2025.

Refer to Note 2—Business Combinations for further discussion.

Contractual Obligations and Commitments
The following table includes significant contractual obligations and commitments as of December 31, 2025, representing required and potential cash outflows, including impacts from purchase accounting adjustments and deferred fees. Refer to Note 22—Commitments and Contingencies for additional information regarding commitments. Financing commitments, letters of credit and deferred purchase commitments are presented at contractual amounts and do not necessarily reflect future cash outflows, as many are expected to expire unused or partially used.

Table 49
Contractual Obligations and Commitments

dollars in millions Payments Due by Period
Less than 1 year 1-3 years 4-5 years Thereafter Total
Contractual obligations:
Time deposits $ 11,002  $ 190  $ 44  $ —  $ 11,236 
Short-term borrowings 224  —  —  —  224 
Long-term borrowings (1) (2)
(37) 33,850  (2) 1,974  35,785 
Total contractual obligations $ 11,189  $ 34,040  $ 42  $ 1,974  $ 47,245 
Commitments:
Financing commitments
$ 25,899  $ 10,194  $ 8,226  $ 7,407  $ 51,726 
Letters of credit
1,891  541  279  100  2,811 
Deferred purchase agreements 1,723  —  —  —  1,723 
Purchase and funding commitments 102  —  —  —  102 
Affordable housing partnerships (1)
584  662  24  51  1,321 
Total commitments $ 30,199  $ 11,397  $ 8,529  $ 7,558  $ 57,683 

(1)     Long-term borrowings are presented net of purchase accounting adjustments of $78 million. On-balance sheet commitments for affordable housing partnerships are included in other liabilities and presented net of a purchase accounting adjustment of $14 million.
(2)     Balance in parenthesis represents the estimated amortization of the purchase accounting adjustment and deferred costs in excess of any principal balance.

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Long-term Borrowings
As displayed above in Table 49, we do not have any significant long-term debt obligations due until the Purchase Money Note matures. While scheduled principal payments are not required until maturity in March 2028, FCB may voluntarily prepay principal without a premium or penalty. As noted above in “Executive Overview—Recent Events,” FCB made a $2.49 billion Partial Prepayment of the Purchase Money Note in December 2025 and additional prepayments of $500 million in both January and February 2026. 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%. 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. 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.

Strategic Risk

The risk arising from ill-advised business decisions, ineffective implementation, or the failure to adapt to changes in the external and internal operating environment which can result in financial loss or reduced competitiveness and hinder BancShares’ ability to achieve its strategic objectives.

Operational Risk

The risk arising from inadequate or failed internal processes or systems, human errors, or adverse external events which may result in impact to current or projected financial condition and resilience.

Capital Adequacy Risk

The risks associated with maintaining inadequate levels or an unsuitable composition of capital. Refer to the “Capital” section further in this MD&A.

Compliance Risk

The risk arising from a failure to adhere to applicable laws, regulations, internal policies, or other industry standards which can result in financial loss, regulatory sanctions, reputational harm, operational disruptions, and/or strategic objectives.

Refer to the section Item 1A. Risk Factors in this Form 10-K for further discussion of potential risks associated with our business.

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CAPITAL

Capital requirements applicable to BancShares are discussed in the “Regulatory Considerations” section in Item 1. Business of this Form 10-K .

Common and Preferred Stock Dividends
During 2025, we paid quarterly dividends of $1.95 per share during the first three quarters and $2.10 per common share in the fourth quarter, on the Class A common stock and Class B common stock. In January 2026, the Board declared a quarterly dividend on the Class A common stock and Class B common stock of $2.10 per common share. The dividends are payable on March 16, 2026 to stockholders of record as of February 27, 2026.

During 2025, we paid quarterly dividends on our Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock as disclosed in Note 15—Stockholders' Equity. In January 2026, the Board declared dividends on our Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock in accordance with their terms. The dividends are payable on March 16, 2026.

Capital Composition and Ratios
As discussed earlier in the “Executive Overview—Recent Events” section of this MD&A, the Board authorized the 2024 SRP, and the 2025 SRP, which permitted repurchases upon completion of the 2024 SRP. During the current year, we repurchased 1,578,462 shares. Repurchases under the 2025 SRP commenced in September 2025 upon the completion of the 2024 SRP in August 2025. Refer to the “Executive Overview—Recent Events” section above for more information and 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.

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.

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. 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. These amounts are excluded from the calculation of our Regulatory Capital Ratios under current regulatory guidelines.

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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. 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.

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. 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.

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. 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). 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). 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.

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.

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. 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.
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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. Estimates for loan and lease losses are determined by analyzing quantitative and qualitative components present as of the evaluation date.

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. Loans and leases are segregated into pools with similar risk characteristics and each have a model that is utilized to estimate the ALLL.

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. 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.

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.

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.

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.

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. 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.

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. These qualitative adjustments are also used to accommodate for the imprecision of certain assumptions and uncertainties inherent in the model calculations.

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Current economic conditions and forecasts can change which could affect the anticipated amount of estimated credit losses and therefore the appropriateness of the ALLL. 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. 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. 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.

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”). 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”).

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. 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. 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”). 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.
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. This ASU is effective for annual and interim reporting periods beginning after December 15, 2025. We adopted this ASU as of January 1, 2026.

We did not elect the optional practical expedient and adoption of this ASU did not impact our consolidated financial statements and disclosures.

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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. 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.

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. 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. 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. 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. 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. 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.

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. 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. 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. 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.

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. We describe each of these measures below and explain why we believe the measure to be useful.
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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. 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.

The following tables reconcile the most comparable GAAP measures to the non-GAAP measures for the Commercial Bank and Rail segments.

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. 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. 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.

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 

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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. 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.

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 

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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. 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). Refer to the “Capital” section of this MD&A for further discussion.

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  %

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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. 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.

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. 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. Such risks and uncertainties include, among others, general competitive, economic (including the imposition of tariffs, retaliatory tariff measures, or trade barriers on trading partners), political (including impacts of any U.S. government shutdown), geopolitical events (including conflicts or developments in Ukraine, the Middle East, and Latin America), natural disasters and market conditions, including changes in competitive pressures among financial institutions and the impacts related to or resulting from previous bank failures, the risks and impacts of future bank failures and other volatility in the banking industry, public perceptions of our business practices, including our deposit pricing and acquisition activity, the financial success or changing conditions or strategies of BancShares’ vendors or customers, including changes in demand for deposits, loans and other financial services, fluctuations in interest rates, changes in the quality or composition of BancShares’ loan or investment portfolio, actions of government regulators, including interest rate decisions by the Federal Reserve, changes to estimates of future costs and benefits of actions taken by BancShares, BancShares’ ability to maintain adequate sources of funding and liquidity, the potential impact of decisions by the Federal Reserve on BancShares’ capital plans, adverse developments with respect to U.S. or global economic conditions, including significant turbulence in the capital or financial markets, the impact of any sustained or elevated inflationary environment, the impact of any cyberattack, information or security breach, the impact of implementation and compliance with current or proposed laws, regulations and regulatory interpretations, including potential increased regulatory requirements, limitations, and costs, such as FDIC special assessments, increases to FDIC deposit insurance premiums, changes in regulatory capital requirements, or limitations on credit card interest rates, along with the risk that such laws, regulations and regulatory interpretations may change, the availability of capital and personnel, and the risks associated with BancShares’ previously completed acquisition transactions, the pending BMO Branch Acquisition, or any future transactions.

BancShares’ 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. The authorization to repurchase Class A common stock pursuant to the 2025 SRP will be utilized at management’s discretion. The actual timing and amount of Class A common stock that may be repurchased under the plan will depend on a number of factors, including the terms of any Rule 10b5-1 plan then in effect, price, general business and market conditions, regulatory requirements, and alternative investment opportunities or capital needs.

Except to the extent required by applicable laws or regulations, BancShares disclaims any obligation to update forward-looking statements or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Additional factors which could affect the forward-looking statements may be included in BancShares’ other filings with the SEC.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Market risk is the potential economic loss resulting from changes in market prices and interest rates. This risk can either result in diminished current fair values of financial instruments or reduced NII in future periods. 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. Management’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.

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Item 8. Financial Statements and Supplementary Data.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
First Citizens BancShares, Inc.:

Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of First Citizens BancShares, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 24, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Allowance for loans and lease losses and reserve for off-balance sheet credit exposures (ACL)
As discussed in Notes 1 and 6 to the consolidated financial statements, as of December 31, 2025, the Company had an allowance for loan and lease losses (ALLL) of $1.57 billion and a reserve for off-balance sheet credit exposures (AULL) of $260 million. Loans and leases are segregated into pools with similar risk characteristics, where models are utilized to estimate the ALLL. The ALLL models estimate the probability of default (PD) and loss given default (LGD) for individual loans and leases within each risk pool based on historical loss experience, borrower characteristics, collateral type, forecasts of future economic conditions, expected future recoveries, and other factors. The loan and lease level undiscounted ALLL is calculated by applying the modeled PD and LGD to forecasted loan and lease balances which are adjusted for contractual payments, prior defaults, and prepayments. The ALLL models utilize economic variables which are based on macroeconomic scenario forecasts which cover the lives of the loan portfolios. The macroeconomic forecasts utilize weighted baseline, upside and downside scenarios. ALLL model outputs may be adjusted through a qualitative assessment to reflect trends not captured within the models, which could include economic conditions, credit quality, concentrations, and significant policy and underwriting changes. Unfunded commitments are assessed to determine both the probability of funding as well as the expectation of future losses. The Company estimates the expected funding amounts and applies the ALLL PD and LGD models to those expected funding amounts to estimate the AULL.
We identified the assessment of the ACL as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the ACL due to significant measurement uncertainty. Specifically, the assessment encompassed the evaluation of the methodology, including the models used to estimate the PD and LGD, the selection of the economic scenarios, and the weighting of each economic scenario. The assessment also included an evaluation of the conceptual soundness and performance of the ALLL models. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the ACL including controls related to the:
• development and approval of the ACL methodology
• continued use and appropriateness of changes to the ALLL models, including the significant assumptions used in the ALLL models
• development of certain ALLL models
• selection of the economic scenarios and the weighting of each economic scenario
• performance monitoring of the ALLL models
• development of the qualitative adjustments, including the significant assumptions used in the measurement of certain qualitative adjustments
• analysis of the ACL results, trends, and ratios.
We evaluated the Company’s process to develop the ACL by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in:
• evaluating the ACL methodology for compliance with U.S. generally accepted accounting principles
• evaluating judgments made by the Company relative to the development, assessment and performance testing of the ALLL models by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices
• assessing the conceptual soundness of the ALLL models by inspecting the model documentation to determine whether the models are suitable for their intended use
• evaluating the selection of the economic scenarios and the weighting applied to each economic scenario by comparing them to the Company’s business environment and relevant industry practices and
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• evaluating the methodology used to develop certain qualitative adjustments and the effect of those adjustments on the ACL compared with relevant credit risk factors and consistency with credit trends associated with the Company’s portfolio
We also assessed the sufficiency of the audit evidence obtained related to the ACL by evaluating the:
• cumulative results of the audit procedures
• qualitative aspects of the Company’s accounting practices and
• potential bias in the accounting estimate.

/s/ KPMG LLP

We have served as the Company’s auditor since 2021.

Raleigh, North Carolina
February 24, 2026

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
First Citizens BancShares, Inc.:

Opinion on Internal Control Over Financial Reporting
We have audited First Citizens BancShares, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 24, 2026 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Raleigh, North Carolina
February 24, 2026

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First Citizens BancShares, Inc. and Subsidiaries
Consolidated Balance Sheets

dollars in millions, except share data December 31, 2025 December 31, 2024
Assets
Cash and due from banks $ 801   $ 814  
Interest-earning deposits at banks 19,801   21,364  
Securities purchased under agreements to resell 232   158  
Investment in marketable equity securities (cost of $ 83 at December 31, 2025 and $ 79 at December 31, 2024)
127   101  
Investment securities available for sale (cost of $ 31,952 at December 31, 2025 and $ 34,512 at December 31, 2024)
31,790   33,750  
Investment securities held to maturity (fair value of $ 8,491 at December 31, 2025 and $ 8,702 at December 31, 2024)
9,647   10,239  
Assets held for sale 804   85  
Loans and leases 147,930   140,221  
Allowance for loan and lease losses ( 1,566 ) ( 1,676 )
Loans and leases, net of allowance for loan and lease losses 146,364   138,545  
Operating lease equipment, net 9,621   9,323  
Premises and equipment, net 2,447   2,006  
Goodwill 346   346  
Other intangible assets, net 195   249  
Other assets 7,523   6,740  
Total assets $ 229,698   $ 223,720  
Liabilities
Deposits:
Noninterest-bearing $ 40,653   $ 38,633  
Interest-bearing 120,925   116,596  
Total deposits 161,578   155,229  
Credit balances of factoring clients 1,148   1,016  
Borrowings:

Short-term borrowings 224   367  

Long-term borrowings 35,784   36,684  
Total borrowings 36,008   37,051  
Other liabilities 8,726   8,196  
Total liabilities 207,460   201,492  
Stockholders’ equity
Preferred stock - $ 0.01 par value ( 20,000,000 shares authorized at December 31, 2025 and December 31, 2024)
1,375   881  
Common stock:
Class A - $ 1 par value ( 32,000,000 shares authorized at December 31, 2025 and December 31, 2024; 11,133,974 and 12,712,436 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively)
11   13  
Class B - $ 1 par value ( 2,000,000 shares authorized and 1,005,185 shares issued and outstanding at December 31, 2025 and December 31, 2024)
1   1  
Additional paid in capital —   2,417  
Retained earnings 20,768   19,361  
Accumulated other comprehensive income (loss) 83   ( 445 )
Total stockholders’ equity 22,238   22,228  
Total liabilities and stockholders’ equity $ 229,698   $ 223,720  

See accompanying Notes to the Consolidated Financial Statements.

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First Citizens BancShares, Inc. and Subsidiaries
Consolidated Statements of Income

Year Ended December 31,
dollars in millions, except share and per share data 2025 2024 2023
Interest income
Loans and leases $ 9,096   $ 9,528   $ 8,187  
Investment securities 1,690   1,347   648  
Deposits at banks 992   1,478   1,556  
Total interest income 11,778   12,353   10,391  
Interest expense
Deposits 3,559   3,864   2,497  
Borrowings 1,405   1,346   1,182  
Total 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
Rental income on operating lease equipment 1,096   1,048   971  
Lending-related fees 266   257   218  
Deposit fees and service charges 241   230   200  
Client investment fees 217   213   157  
Wealth management services 229   211   188  
International fees 136   119   91  
Factoring commissions 73   75   82  
Cardholder services, net 158   163   139  
Merchant services, net 52   49   48  
Insurance commissions 53   55   54  
Realized gain (loss) on sale of investment securities, net 3   6   ( 26 )
Fair value adjustment on marketable equity securities, net 22   13   ( 11 )
Gain on sale of leasing equipment, net 30   30   20  
Gain on acquisition —   —   9,808  
Loss on extinguishment of debt ( 9 ) ( 2 ) —  
Other noninterest income 160   148   136  
Total noninterest income 2,727   2,615   12,075  
Noninterest expense
Depreciation on operating lease equipment 398   394   371  
Maintenance and other operating lease expenses 244   219   222  
Personnel cost 3,294   3,078   2,636  
Net occupancy expense 238   242   244  
Equipment expense 555   504   422  
Professional fees 115   121   71  
Third-party processing fees 268   230   205  
FDIC insurance expense 141   138   158  
Marketing expense 142   76   102  
Acquisition-related expenses 141   210   470  
Intangible asset amortization 54   63   57  
Other noninterest expense 466   460   377  
Total 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  
Earnings per common share
Basic $ 165.24   $ 189.42   $ 785.14  
Diluted $ 165.24   $ 189.41   $ 784.51  
Weighted average common shares outstanding
Basic 13,002,455 14,341,872 14,527,902
Diluted 13,002,455 14,342,655 14,539,613

See accompanying Notes to the Consolidated Financial Statements.
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First Citizens BancShares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income

Year Ended December 31,
dollars in millions 2025 2024 2023
Net income $ 2,206   $ 2,777   $ 11,466  
Other comprehensive income, net of tax
Net unrealized gain (loss) on securities available for sale 447   ( 7 ) 162  
Net change in unrealized loss on securities available for sale transferred to securities held to maturity —   1   1  
Net change in defined benefit pension items 75   44   81  

Net unrealized gain on cash flow hedge derivatives 6   8   —  
Other comprehensive income, net of tax $ 528   $ 46   $ 244  
Total comprehensive income $ 2,734   $ 2,823   $ 11,710  

See accompanying Notes to the Consolidated Financial Statements.

99

First Citizens BancShares, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity

dollars in millions, except share data Preferred Stock Class A Common Stock Class B Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Stockholders' Equity
Balance at December 31, 2022 $ 881   $ 14   $ 1   $ 4,109   $ 5,392   $ ( 735 ) $ 9,662  
Net income —  —  —  —  11,466   —  11,466  
Other comprehensive income, net of tax —  —  —  —  —  244   244  

Stock based compensation —  —  —  ( 1 ) —  —  ( 1 )

Cash dividends declared ($ 3.89 per common share):

Class A common stock —  —  —  —  ( 53 ) —  ( 53 )
Class B common stock —  —  —  —  ( 4 ) —  ( 4 )
Preferred stock dividends declared:
Series A —  —  —  —  ( 18 ) —  ( 18 )
Series B —  —  —  —  ( 30 ) —  ( 30 )
Series C —  —  —  —  ( 11 ) —  ( 11 )
Balance at December 31, 2023 $ 881   $ 14   $ 1   $ 4,108   $ 16,742   $ ( 491 ) $ 21,255  
Net income —  —  —  —  2,777   —  2,777  
Other comprehensive income, net of tax —  —  —  —  —  46   46  

Stock based compensation —  —  —  ( 12 ) —  —  ( 12 )
Repurchased 814,641 shares of Class A common stock
—  ( 1 ) —  ( 1,679 ) —  —  ( 1,680 )
Cash dividends declared ($ 6.87 per common share):

Class A common stock —  —  —  —  ( 91 ) —  ( 91 )
Class B common stock —  —  —  —  ( 6 ) —  ( 6 )
Preferred stock dividends declared:
Series A —  —  —  —  ( 19 ) —  ( 19 )
Series B —  —  —  —  ( 31 ) —  ( 31 )
Series C —  —  —  —  ( 11 ) —  ( 11 )
Balance at December 31, 2024 $ 881   $ 13   $ 1   $ 2,417   $ 19,361   $ ( 445 ) $ 22,228  
Net income —  —  —  —  2,206   —  2,206  
Other comprehensive income, net of tax —  —  —  —  —  528   528  
Issuance of Series D preferred stock 494   —  —  —  —  —  494  

Repurchased 1,578,462 shares of Class A common stock
—  ( 2 ) —  ( 2,417 ) ( 638 ) —  ( 3,057 )
Cash dividends declared ($ 7.95 per common share):

Class A common stock —  —  —  —  ( 96 ) —  ( 96 )
Class B common stock —  —  —  —  ( 8 ) —  ( 8 )
Preferred stock dividends declared:
Series A —  —  —  —  ( 18 ) —  ( 18 )
Series B —  —  —  —  ( 28 ) —  ( 28 )
Series C —  —  —  —  ( 11 ) —  ( 11 )
Balance at December 31, 2025 $ 1,375   $ 11   $ 1   $ —   $ 20,768   $ 83   $ 22,238  

See accompanying Notes to the Consolidated Financial Statements.
100

First Citizens BancShares, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

                                                                                                                                                                                                                                                              Year Ended December 31,
dollars in millions 2025 2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,206   $ 2,777   $ 11,466  
Adjustments to reconcile net income to cash provided by operating activities:
Provision for credit losses 514   431   1,375  
Deferred tax (benefit) expense ( 111 ) 6   ( 165 )
Depreciation, amortization, and accretion, net 405   130   ( 57 )
Stock based compensation expense —   —   5  
Realized (gain) loss on sale of investment securities, net ( 3 ) ( 6 ) 26  
Fair value adjustment on marketable equity securities, net ( 22 ) ( 13 ) 11  
(Gain) loss on sale of loans, net ( 21 ) ( 7 ) 2  
Gain on sale of operating lease equipment, net ( 30 ) ( 30 ) ( 20 )

Gain on other real estate owned, net ( 2 ) ( 7 ) ( 4 )
Gain on acquisition —   —   ( 9,808 )

Loss on extinguishment of debt 9   2   —  
Origination of loans held for sale ( 1,401 ) ( 1,078 ) ( 740 )
Proceeds from sale of loans held for sale 1,553   1,289   693  
Impairment of premises and equipment and other assets 6   22   70  
Net change in other assets ( 282 ) ( 495 ) 206  
Net change in other liabilities 170   ( 34 ) ( 379 )
Other operating activities ( 68 ) 1   ( 21 )
Net cash provided by operating activities 2,923   2,988   2,660  
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in interest-earning deposits at banks 1,563   12,245   5,416  
Purchases of marketable equity securities ( 5 ) ( 6 ) —  
Proceeds from sales of investments in marketable equity securities 1   15   —  
Purchases of investment securities available for sale ( 13,969 ) ( 22,490 ) ( 12,839 )
Proceeds from maturities of investment securities available for sale 12,989   7,445   2,084  
Proceeds from sales of investment securities available for sale 3,817   1,493   495  
Purchases of investment securities held to maturity ( 389 ) ( 792 ) ( 213 )
Proceeds from maturities of investment securities held to maturity 1,010   562   545  
Net (increase) decrease in securities purchased under agreements to resell ( 74 ) 315   ( 473 )
Net (increase) decrease in loans ( 9,111 ) ( 7,484 ) 6,057  
Proceeds from sales of loans 399   354   317  
Net decrease (increase) in credit balances of factoring clients 212   ( 73 ) 94  
Purchases of operating lease equipment ( 852 ) ( 1,106 ) ( 1,023 )
Proceeds from sales of operating lease equipment 285   250   243  
Purchases of premises and equipment ( 710 ) ( 429 ) ( 405 )

Proceeds from sales of other real estate owned 29   19   19  
Cash acquired, net of cash paid as consideration for acquisition —   —   810  
Proceeds from surrender of bank-owned life insurance policies —   —   1,094  
Other investing activities ( 806 ) ( 473 ) 208  
Net cash (used in) provided by investing activities ( 5,611 ) ( 10,155 ) 2,429  
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in time deposits ( 2,015 ) ( 3,169 ) 5,634  
Net increase (decrease) in demand and other interest-bearing deposits 8,539   12,630   ( 5,369 )
Net (decrease) increase in securities sold under agreements to repurchase ( 143 ) ( 118 ) 39  
Repayment of short-term borrowings —   —   ( 2,250 )
Proceeds from issuance of short-term borrowings —   —   500  
Repayment of long-term borrowings ( 2,850 ) ( 450 ) ( 13,120 )
Net proceeds from issuance of long-term borrowings 1,838   —   9,991  
Net proceeds from issuance of preferred stock 494   —   —  
Repurchase of Class A common stock ( 3,027 ) ( 1,648 ) —  
Cash dividends paid ( 161 ) ( 158 ) ( 117 )
Other financing activities —   ( 14 ) ( 7 )
Net cash provided by (used in) financing activities 2,675   7,073   ( 4,699 )

Change in cash and due from banks ( 13 ) ( 94 ) 390  
Cash and due from banks at beginning of period 814   908   518  
Cash and due from banks at end of period $ 801   $ 814   $ 908  

101

Year Ended December 31,
dollars in millions 2025 2024 2023
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 4,810   $ 5,079   $ 3,686  
Income taxes 315   763   514  
Significant non-cash investing and financing activities:
Transfers of loans to other real estate 86   —   —  

Net settlement with FDIC for Purchase Money Note —   80   —  

Transfer of assets from held for investment to held for sale 1,296   606   336  
Transfer of assets from held for sale to held for investment 31   —   —  

Commitments extended during the period on affordable housing investment credits 648   710   224  

Purchase Money Note as consideration for SVBB Acquisition —   —   35,808  

See accompanying Notes to the Consolidated Financial Statements.

102

First Citizens BancShares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Nature of Operations
First Citizens BancShares, Inc. (the “Parent Company” and, when including all of its subsidiaries on a consolidated basis, “we,” “us,” “our,” “BancShares”) is a financial holding company organized under the laws of Delaware that conducts operations through its banking subsidiary, First-Citizens Bank & Trust Company (“FCB”), which is headquartered in Raleigh, North Carolina. BancShares operates a network of branches and offices, predominantly located in the Southeast, Mid-Atlantic, Midwest and Western United States. BancShares provides various types of commercial and consumer banking services, including lending, leasing, and wealth management services. Deposit services include checking, savings, money market, and time deposit accounts.

BASIS OF PRESENTATION

Principles of Consolidation and Basis of Presentation
The accounting and reporting policies of BancShares are in accordance with United States generally accepted accounting principles (“GAAP”) and general practices within the banking industry.

The consolidated financial statements of BancShares include the accounts of BancShares and its subsidiaries, certain partnership interests, and variable interest entities (“VIEs”) where BancShares is the primary beneficiary, if applicable. All significant intercompany accounts and transactions are eliminated upon consolidation. Assets held in agency or fiduciary capacity are not included in the consolidated financial statements.

VIEs are legal entities that either do not have sufficient equity to finance their activities without the support from other parties or whose equity investors lack a controlling financial interest. BancShares has investments in certain partnerships and limited liability entities that have been evaluated and determined to be VIEs. Consolidation of a VIE is appropriate if a reporting entity holds a controlling financial interest in the VIE and is the primary beneficiary. BancShares is not the primary beneficiary and does not hold a controlling interest in the VIEs as we do not have the power to direct the activities that most significantly impact the VIEs’ economic performance or the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. As such, assets and liabilities of these entities are not consolidated into the financial statements of BancShares. The recorded investment in these entities is reported within other assets.

Refer to Note 10—Variable Interest Entities for additional information regarding VIEs.

Reclassifications

Financial Statements
In certain instances, amounts reported in the 2024 and 2023 consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had no effect on previously reported stockholders’ equity or net income.

Changes to Reportable Segments
As of December 31, 2025, our reportable segments included the General Bank, the Commercial Bank, and Rail. All other financial information not included in the segments is reported in the Corporate section of the segment disclosures. We made the following changes to our segment reporting during 2025 (the “Segment Reporting Updates”):
• All components previously reported in the Silicon Valley Bank (“SVB”) Commercial segment and certain components of the General Bank segment were consolidated into the Commercial Bank segment.
• We made minor updates to our segment expense allocations.

Segment disclosures for the years ended December 31, 2024 and 2023 included in this Form 10-K were recast to conform with the Segment Reporting Updates summarized above. Refer to Note 21—Segment Information for additional information.

103

Loan Class Changes
At December 31, 2025, our commercial loan classes included: commercial and industrial, capital call lines, owner occupied commercial mortgage, investor dependent, and commercial real estate, while our consumer loan classes included: residential mortgage, revolving mortgage, auto, and other consumer.

During 2025, we changed our loan classes (the “Loan Class Changes”) from the loan classes in the Annual Report on Form 10-K as of and for the year ended December 31, 2024 (the “2024 Form 10-K”). The Loan Class Changes recast capital call lines and commercial real estate into separate loan classes, and recast SVB loan classes into the commercial loan classes. Additionally, investor dependent - early stage and investor dependent - growth stage were combined into a single investor dependent loan class, and leases were recast into commercial and industrial. The following table summarizes the recast of the 2024 Form 10-K loan classes to the loan classes in this Annual Report on Form 10-K.

2025 Loan Class Changes

2024 Form 10-K Loan Class Loan Class in this Annual Report on Form 10-K
Commercial
Commercial construction Commercial real estate
Owner occupied commercial mortgage Owner occupied commercial mortgage
Non-owner occupied commercial mortgage Commercial real estate
Commercial and industrial Commercial and industrial, commercial real estate (1)

Leases Commercial and industrial

Consumer
Residential mortgage Residential mortgage, commercial real estate (2)

Revolving mortgage Revolving mortgage
Consumer auto Auto
Consumer other Other consumer

SVB
Global fund banking (3)
Capital call lines, commercial and industrial (3)

Investor dependent - early stage Investor dependent
Investor dependent - growth stage Investor dependent
Innovation C&I and cash flow dependent Commercial and industrial

(1)     Loans for the purpose of acquiring, constructing or developing real estate were included in commercial and industrial in the 2024 Form 10-K, and are included in commercial real estate in this Form 10-K.
(2)     Residential construction loans were included in residential mortgage in the 2024 Form 10-K, and are included in commercial real estate in this Form 10-K.
(3) In the 2024 Form 10-K, the global fund banking loan class included capital call lines and other commercial loans in the Global Fund Banking line of businesses (a component of the Commercial Bank segment). Capital call lines are a separate loan class, and the other commercial loans in the Global Fund Banking line of business are included in commercial and industrial in this Form 10-K.

Our loan classes as of December 31, 2025 are further described in the “Loans and Leases” discussion of this Note 1—Significant Accounting Policies and Basis of Presentation. Loan and lease and allowance for loan and lease losses (“ALLL”) disclosures for all periods presented in this Form 10-K were recast to reflect the Loan Class Changes. Refer to Note 5—Loans and Leases and Note 6—Allowance for Loan and Lease Losses.

Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions impact the amounts reported in the consolidated financial statements and accompanying notes and the disclosures provided, and actual results could differ from those estimates. The significant estimate related to the determination of the ALLL is considered a critical accounting estimate.

SIGNIFICANT ACCOUNTING POLICIES

Interest-Earning Deposits at Banks
Interest-earning deposits at banks are primarily comprised of interest-bearing deposits with the Federal Reserve Bank (“FRB”) and other banks. Interest-earning deposits at banks have maturities of three months or less. The carrying value of interest-earning deposits at banks approximates its fair value due to its short-term nature.

104

Securities Purchased Under Agreements to Resell
Securities purchased under agreements to resell are accounted for as collateralized financing transactions as the terms of such purchase agreements do not qualify for sale accounting and are therefore recorded at the amount of cash advanced. The securities purchased under agreements to resell are primarily collateralized by U.S. Treasury and U.S. agency mortgage-backed securities. Accrued interest receivables are recorded in other assets. Interest earned is recorded in interest income.

Investments

Debt Securities
BancShares classifies debt securities as held to maturity or available for sale. Debt securities are classified as held to maturity when BancShares has the intent and ability to hold the securities to maturity. Held to maturity securities are reported at amortized cost. Debt securities classified as available for sale are reported at estimated fair value, with unrealized gains and losses, net of income taxes, reported in Accumulated Other Comprehensive Income (“AOCI”). Amortization of premiums and accretion of discounts for debt securities are recorded in interest income. Realized gains and losses from the sale of debt securities are included in noninterest income. BancShares performs pre-purchase due diligence and evaluates the credit risk of available for sale and held to maturity debt securities purchased directly into BancShares' portfolio or via acquisition. If securities have evidence of more than insignificant credit deterioration since issuance, they are designated as purchased credit deteriorated (“PCD”).

For available for sale debt securities, management performs a quarterly analysis of the investment portfolio to evaluate securities currently in an unrealized loss position for potential credit-related impairment. If BancShares intends to sell a security, or does not have the intent and ability to hold a security before recovering the amortized cost, the entirety of the unrealized loss is immediately recorded in earnings to the extent that it exceeds the associated allowance for credit losses previously established. For the remaining securities, an analysis is performed to determine if any portion of the unrealized loss recorded relates to credit impairment. If credit-related impairment exists, the amount is recorded through the allowance for credit losses and related provision. This review includes indicators such as changes in credit rating, delinquency, bankruptcy, or other significant events impacting the issuer.

Debt securities are classified as past due when the payment of principal and interest based upon contractual terms is 30 days delinquent or greater. Management reviews all debt securities with delinquent interest and immediately charges off any accrued interest determined to be uncollectible.

Refer to Note 3—Investment Securities for additional information.

Equity Securities
Investments in equity securities having readily determinable fair values are stated at fair value. Realized and unrealized gains and losses on these securities are included in noninterest income. Dividends on marketable equity securities are included in interest on investment securities.

Nonmarketable equity securities that do not meet the criteria to be accounted for under the equity method and that do not have readily determinable fair values are measured at cost under the measurement alternative with adjustments for impairment and observable price changes if applicable. Dividends from these investments are included in noninterest income.

BancShares evaluates its nonmarketable equity securities for impairment and recoverability of the recorded investment based on analysis of the facts and circumstances of each investment, including asset quality of the issuer, dividend payment history and recent redemption experience. Any impairment is recorded in noninterest income.