10-Q – 2025-11-07 – fcnca-20250930.htm

General Bank segment net income for the current YTD increased $212 million compared to the prior YTD, 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 $284 million increase in NII was mainly due to a lower rate paid on interest-bearing deposits, as well as the impact of loan growth , partially offset by the impact of deposit growth.
• The $53 million decrease in provision for credit losses reflects the ALLL build during the prior YTD, the elimination of reserves related to Hurricane Helene in the current YTD, and the modest shift in our weighting from the downside to baseline economic scenario in the linked quarter as further discussed in the “ALLL Methodology” section of this MD&A.
• The $48 million increase in total noninterest income was mostly due to increases in wealth management services, deposit fees and service charges, and cardholder services.
• The $112 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 $33 million increase in personnel cost was mainly due to annual merit increases and promotions.

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Commercial Bank
Table 16
Commercial Bank: Financial Data

dollars in millions Three Months Ended Increase (Decrease) from Linked Quarter Nine Months Ended Increase (Decrease)
Year to Date
Earnings Summary September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Net interest income $ 303  $ 299  $ 305  $ 4  1  % $ 895  $ 916  $ (21) (2) %
Noninterest Income
Rental income on operating lease equipment 54  54  57  —  —  164  172  (8) (4)
Less: depreciation on operating lease equipment 43  44  47  (1) (2) 131  141  (10) (6)

Net rental income on operating lease equipment (1)
11  10  10  1  10  33  31  2  6 
All other noninterest income 101  98  79  3  4  268  239  29  12 
Total noninterest income (2)
155  152  136  3  3  432  411  21  5 
Noninterest income, net of depreciation (1)
112  108  89  4  4  301  270  31  11 
Total revenue 458  451  441  7  2  1,327  1,327  —  — 
Revenue, net of depreciation (1)
415  407  394  8  2  1,196  1,186  10  1 
Noninterest Expense
Personnel cost 74  69  68  5  7  215  205  10  4 

All other noninterest expense 149  154  150  (5) (4) 462  425  37  9 
Total noninterest expense (3)
266  267  265  (1) (1) 808  771  37  5 
Noninterest expense, net of depreciation (1)
223 223 218 —  —  677 630 47 7 

Provision for credit losses 168  47  11  121  257  300  70  230  330 
Income before income taxes 24  137  165  (113) (82) 219  486  (267) (55)
Income tax expense 6  35  41  (29) (83) 56  127  (71) (56)
Net income $ 18  $ 102  $ 124  $ (84) (82) $ 163  $ 359  $ (196) (54)
PPNR (1)
$ 192  $ 184  $ 176  $ 8  5  % $ 519  $ 556  $ (37) (7) %
Select Period End Balances
Loans and leases $ 38,841  $ 38,691  $ 37,281  $ 150  —  % $ 38,841  $ 37,281  $ 1,560  4  %
Operating lease equipment, net 737  750  767  (13) (2) 737  767  (30) (4)

Deposits 2,978  2,899  3,126  79  3  2,978  3,126  (148) (5)

(1)     Net rental income on operating lease equipment; noninterest income, net of depreciation; revenue, net of depreciation; noninterest expense, net of depreciation; and PPNR are 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) Total noninterest income includes rental income on operating lease equipment and all other noninterest income.
(3) Total noninterest expense includes depreciation on operating lease equipment.

Commercial Bank segment net income for the current quarter decreased $84 million compared to the linked quarter, mostly due to a higher provision for credit losses.
• The $121 million increase in provision for credit losses was mainly due to higher net charge-offs compared to the linked quarter, including an $82 million charge-off on a single supply chain finance client.
• The $29 million decrease in income tax expense reflected lower income before income taxes.

Commercial Bank segment loans were $38.84 billion at September 30, 2025, an increase of $150 million compared to $38.69 billion at June 30, 2025, primarily due to growth in the Working Capital Solutions portfolio, partially offset by a decline in Real Estate Finance.

Commercial Bank segment deposits were $2.98 billion at September 30, 2025, an increase of $79 million from $2.90 billion at June 30, 2025.

Commercial Bank segment net income for the current YTD decreased $196 million compared to the prior YTD, primarily due to a higher provision for credit losses, higher noninterest expense, and lower NII, partially offset by higher noninterest income and lower income tax expense.
• The $230 million increase in provision for credit losses was mainly due to higher net charge-offs in the current YTD, the impact of loan growth, and a higher reserve release in the prior YTD, partially offset by the modest shift in our
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weighting from the downside to baseline economic scenario in the linked quarter as further discussed in the “ALLL Methodology” section of this MD&A.
• The $37 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 $21 million decrease in NII was mostly due to a lower loan yield, partially offset by the impact of loan growth and lower deposit costs.
• The $21 million increase in total noninterest income is largely due to lending fees, including capital markets fees, partially offset by lower rental income on operating lease equipment.
• The $71 million decrease in income tax expense reflected lower income before income taxes.

SVB Commercial

Table 17
SVB Commercial: Financial Data

dollars in millions Three Months Ended Increase (Decrease) from Linked Quarter Nine Months Ended Increase (Decrease)
Year to Date
Earnings Summary September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Net interest income $ 493  $ 490  $ 560  $ 3  1  % $ 1,476  $ 1,636  $ (160) (10) %
Total noninterest income 135  130  137  5  3  397  405  (8) (2)
Total revenue 628  620  697  8  1  1,873  2,041  (168) (8)
Personnel cost 106  110  112  (4) (3) 330  354  (24) (7)

All other noninterest expense 267  272  272  (5) (2) 804  765  39  5 
Total noninterest expense 373  382  384  (9) (2) 1,134  1,119  15  1 

Provision for credit losses 22  55  51  (33) (62) 100  93  7  7 
Income before income taxes 233  183  262  50  28  639  829  (190) (23)
Income tax expense 58  47  75  11  26  162  235  (73) (31)
Net income $ 175  $ 136  $ 187  $ 39  28  % $ 477  $ 594  $ (117) (20) %
PPNR (1)
$ 255  $ 238  $ 313  $ 17  7  % $ 739  $ 922  $ (183) (20) %
Select Period End Balances
Loans and leases $ 40,629  $ 37,529  $ 37,098  $ 3,100  8  % $ 40,629  $ 37,098  $ 3,531  10  %

Deposits 39,891  37,798  35,844  2,093  6  39,891  35,844  4,047  11 

(1)     PPNR 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.

SVB Commercial segment net income for the current quarter increased $39 million compared to the linked quarter, mainly due to a lower provision for credit losses, higher noninterest income, and lower noninterest expense, partially offset by higher income tax expense.
• The $33 million decrease in provision for credit losses was largely due to a reserve release related to both off-balance sheet credit exposures and loans and leases, as well as lower specific reserves for individually evaluated investor dependent loans.
• The $5 million increase in total noninterest income was primarily in client investment fees.
• The $5 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.
• The $11 million increase in income tax expense reflected the increase in income before income taxes.

SVB Commercial segment loans were $40.63 billion at September 30, 2025, an increase of $3.10 billion compared to $37.53 billion at June 30, 2025, primarily related to growth in Global Fund Banking.

SVB Commercial segment deposits were $39.89 billion at September 30, 2025, an increase of $2.09 billion compared to $37.80 billion at June 30, 2025, mainly due to deposit growth in Global Fund Banking. Most of the growth was in noninterest-bearing checking accounts.

SVB Commercial segment net income for the current YTD decreased $117 million compared to the prior YTD, mainly due to lower NII, higher total noninterest expense, lower noninterest income, and higher provision for credit losses, partially offset by lower income tax expense .
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• The $160 million decrease in NII was largely due to a lower loan yield, partially offset by a lower rate paid on interest-bearing deposits, as well as the impact of loan growth.
• The $39 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 $8 million decrease in noninterest income was mainly in lending-related fees and cardholder services, partially offset by higher international fees, reflecting higher volumes and commissions on foreign currency exchange transactions, and client investment fees, due to a higher average balance of client funds.
• The $7 million increase in provision for credit losses primarily reflected an increase in net charge-offs, partially offset by a modest shift in our weighting from the downside to baseline economic scenario in the linked quarter as further discussed in the “ALLL Methodology” section of this MD&A.
• The $73 million decrease in income tax expense reflected the decrease in income before income taxes.

Rail

Table 18
Rail: Financial Data

dollars in millions Three Months Ended Increase (Decrease) from Linked Quarter Nine Months Ended Increase (Decrease)
Year to Date
Earnings Summary September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Net interest income (expense) $ (55) $ (53) $ (48) $ 2  2  % $ (160) $ (136) $ (24) 18  %
Noninterest Income
Rental income on operating lease equipment 219  218  205  1  1  651  604  47  8 
Less: depreciation on operating lease equipment 55  56  52  (1) 1  165  152  13  8 
Less: maintenance and other operating lease expenses 67  55  59  12  20  180  164  16  10 
Net rental income on operating lease equipment (1)
97  107  94  (10) (9) 306  288  18  6 
All other noninterest income 2  3  2  (1) (67) 7  8  (1) (20)
Total noninterest income (2)
221  221  207  —  —  658  612  46  7 
Noninterest income, net of depreciation and maintenance (1)
99  110  96  (11) (10) 313  296  17  6 
Total revenue 166  168  159  (2) (1) 498  476  22  4 
Revenue, net of depreciation and maintenance (1)
44  57  48  (13) (23) 153  160  (7) (4)
Noninterest Expense
Personnel cost 6  6  6  —  —  20  20  —  — 

All other noninterest expense 16  26  14  (10) (42) 56  43  13  28 
Total noninterest expense (3)
144  143  131  1  1  421  379  42  11 
Noninterest expense, net of depreciation and maintenance (1)
22  32  20  (10) (31) 76  63  13  21 

Provision for credit losses —  —  —  —  —  —  —  —  — 
Income before income taxes 22  25  28  (3) (12) 77  97  (20) (20)
Income tax expense 5  6  8  (1) (13) 19  27  (8) (27)
Net income $ 17  $ 19  $ 20  $ (2) (12) % $ 58  $ 70  $ (12) (18) %
PPNR (1)
$ 22  $ 25  $ 28  $ (3) (12) % $ 77  $ 97  $ (20) (21) %
Select Period End Balances
Loans and leases $ 63  $ 62  $ 62  $ 1  —  % $ 63  $ 62  $ 1  —  %
Operating lease equipment, net 8,709  8,716  8,419  (7) —  8,709  8,419  290  3 

Deposits 2  3  14  (1) (28) 2  14  (12) (86)

(1)     Net rental income on operating lease equipment; noninterest income, net of depreciation and maintenance; noninterest expense, net of depreciation and maintenance; revenue, net of depreciation and maintenance; and PPNR are 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) Total noninterest income includes rental income on operating lease equipment and all other noninterest income.
(3) Total noninterest expense includes depreciation on operating lease equipment.
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Rail segment net income for the current quarter decreased $2 million compared to the linked quarter, mostly due to higher maintenance and other operating lease expenses, partially offset by lower all other noninterest expense, largely due to the linked quarter including an accrual for the previously discussed vendor dispute.

Rail segment net income for the current YTD decreased $12 million compared to the prior YTD, mostly due to lower NII and higher total noninterest expense, partially offset by higher rental income on operating lease equipment.
• The $24 million decrease in NII 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 the previously mentioned vendor dispute.
• Depreciation on operating lease equipment increased $13 million, reflective of growth in operating lease equipment, and maintenance and other operating lease expenses increased $16 million.
• The $47 million increase in rental income on operating lease equipment reflected higher rental income on portfolio growth and strong repricing.
• The $8 million decrease in income tax expense reflected the decrease in income before income taxes.

Railcar Portfolio
Our fleet is diverse and the average re-pricing of equipment upon lease maturities was 118% of the average prior or expiring lease rate during the current quarter. Railcar utilization, including commitments to lease, was 96.8% at September 30, 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 September 30, 2025 consisted of approximately 127,600 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 19
Operating Lease Railcar Portfolio by Type (units and net investment)

September 30, 2025 June 30, 2025 December 31, 2024
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  % 41  % 45  % 42  %
Tank cars 27  39  28  39  27  38 
Mill/ coil gondolas 8  6  8  6  8  6 
Coal 7  1  7  1  7  1 
Boxcars 5  5  6  5  6  6 
Other 8  8  6  8  7  7 
Total 100  % 100  % 100  % 100  % 100  % 100  %

Table 20
Rail Operating Lease Equipment by Obligor Industry

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024
Manufacturing $ 3,706  43  % $ 3,659  42  % $ 3,467  40  %
Rail 1,975  23  2,011  23  2,003  23 
Wholesale 1,532  18  1,550  18  1,505  18 
Oil and gas extraction / services 493  6  483  5  583  7 
Energy and utilities 213  2  222  3  239  3 
Other 791  8  791  9  776  9 
Total $ 8,710  100  % $ 8,716  100  % $ 8,573  100  %

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Corporate

Table 21
Corporate: Financial Data

dollars in millions Three Months Ended Increase (Decrease) from Linked Quarter Nine Months Ended Increase (Decrease)
Year to Date
Earnings Summary September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Net interest income $ 147  $ 135  $ 219  $ 12  9  % $ 423  $ 844  $ (421) (50) %
Total noninterest income 22  11  21  11  117  31  42  (11) (26)
Total revenue 169  146  240  23  17  454  886  (432) (49)
Personnel cost 418  415  390  3  1  1,243  1,094  149  14 
Acquisition-related expenses 28  38  46  (10) (27) 108  148  (40) (27)
All other noninterest expense (320) (325) (313) 5  2  (957) (875) (82) 9 
Total noninterest expense 126  128  123  (2) —  394  367  27  8 

Provision for credit losses —  —  —  —  —  —  —  —  — 
Income before income taxes 43  18  117  25  146  60  519  (459) (88)
Income tax expense (benefit) 5  (6) 11  11  176  (1) 120  (121) (101)
Net income $ 38  $ 24  $ 106  $ 14  60  % $ 61  $ 399  $ (338) (85) %
PPNR (1)
$ 43  $ 18  $ 117  $ 25  145  % $ 60  $ 519  $ (459) (88) %
Select Period End Balances

Deposits 45,723  45,736  40,692  (13) —  45,723  40,692  5,031  12 

(1)     PPNR 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.

Corporate net income increased $14 million compared to the linked quarter, mainly due to higher NII and noninterest income, as well as lower acquisition-related costs, partially offset by higher income tax expense.
• The $12 million increase in NII reflected higher interest income on investment securities and interest-earning deposits at banks, partially offset by higher interest expense on deposits, and lower loan PAA.
• The $11 million increase in noninterest income was largely due to favorable changes in the fair value of marketable equity securities.
• The $10 million decrease in acquisition-related expenses is presented in Table 13 in the “Noninterest Expense” section of this MD&A.
• The $11 million increase in income tax expense reflected higher income before income taxes.

Corporate deposits were $45.72 billion at September 30, 2025, a decrease of $13 million compared to $45.74 billion at June 30, 2025, as a modest increase in Direct Bank deposits was offset by a decline in other deposits. Total deposits in Corporate primarily include $45.15 billion of Direct Bank deposits, with the remaining balance consisting of brokered and other deposits.

Corporate net income for the current YTD decreased $338 million compared to the prior YTD, primarily reflecting lower NII and higher personnel cost, partially offset by lower all other noninterest expense, acquisition-related expenses and income tax expense.
• The $421 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 $149 million increase in personnel cost was mainly due to annual merit increases and promotions, as well as net staff additions.
• The $82 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.
• The $40 million decrease in acquisition-related expenses is presented in Table 13 in the “Noninterest Expense” section of this MD&A.
• The $121 million decrease in income tax expense reflected lower income before income taxes.

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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 Methodology” section of this MD&A and in Note 5—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.

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 September 30, 2025 totaled $24.80 billion, an increase of $3.43 billion or 16% from $21.36 billion at December 31, 2024. The increase from December 31, 2024 reflected deposit growth and net increases in debt, partially offset by the impacts of Class A common share repurchases, loan growth, and net purchases of investment securities.

Securities Purchased Under Agreements to Resell
Securities purchased under agreements to resell at September 30, 2025 totaled $83 million, a decrease of $75 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. Additionally, purchases of equities and corporate bonds in other financial institutions have been made under a long-term earnings optimization strategy. 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 September 30, 2025 totaled $45.12 billion, an increase of $1.03 billion or 2% from $44.09 billion at December 31, 2024. The increase from December 31, 2024 resulted from purchases of $7.87 billion, which were primarily U.S agency residential mortgage-backed and short-duration U.S. Treasury investment securities partially offset by maturities, sales, and payments of $7.60 billion, and non-cash items, such as fair value changes for investment securities available for sale and marketable equity securities, along with amortization and accretion.

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 accumulated other comprehensive income (“AOCI”), net of deferred taxes. As of September 30, 2025, investment securities available for sale had a net pretax unrealized loss of $224 million, compared to $762 million as of December 31, 2024, primarily reflecting changes in interest rates and maturities. 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 September 30, 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 September 30, 2025.

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Our portfolio of investment securities held to maturity consists of similar mortgage-backed securities, U.S. Treasury securities and government agency securities described above, as well as securities issued by the Supranational Entities & Multilateral Development Banks and FDIC guaranteed certificates of deposit with other financial institutions. Given the consistently strong credit rating of the U.S. Treasury and 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 September 30, 2025.

The following table presents the investment securities portfolio, segregated by major category:

Table 22
Investment Securities

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024
Amortized Cost Fair Value
Composition (1)
Amortized Cost Fair
Value
Composition (1)
Amortized Cost Fair Value
Composition (1)

Investment securities available for sale:
U.S. Treasury $ 13,729  $ 13,781  31.4  % $ 12,125  $ 12,170  29.0  % $ 13,897  $ 13,903  32.7  %
Government agency 53  52  0.1  62  60  0.1  79  77  0.2 
Residential mortgage-backed securities 17,550  17,435  39.7  17,118  16,924  40.3  16,161  15,620  36.7 
Commercial mortgage-backed securities 3,582  3,428  7.8  3,695  3,536  8.4  3,869  3,666  8.6 
Corporate bonds 256  250  0.6  364  353  0.8  489  467  1.1 
Municipal bonds 17  17  —  17  17  —  17  17  — 

Total investment securities available for sale $ 35,187  $ 34,963  79.6  % $ 33,381  $ 33,060  78.6  % $ 34,512  $ 33,750  79.3  %
Investment in marketable equity securities $ 78  $ 110  0.3  % $ 78  $ 97  0.2  % $ 79  $ 101  0.2  %
Investment securities held to maturity:
U.S. Treasury $ 387  $ 369  0.8  % $ 486  $ 465  1.1  % $ 483  $ 452  1.1  %
Government agency 1,459  1,395  3.2  1,493  1,415  3.4  1,489  1,374  3.2 
Residential mortgage-backed securities 4,568  4,083  9.3  4,548  4,002  9.5  4,558  3,878  9.1 
Commercial mortgage-backed securities 3,358  2,733  6.2  3,359  2,726  6.5  3,407  2,729  6.5 

Supranational securities 277  256  0.6  302  279  0.7  300  267  0.6 
Other 2  2  —  1  1  —  2  2  — 
Total investment securities held to maturity $ 10,051  $ 8,838  20.1  % $ 10,189  $ 8,888  21.2  % $ 10,239  $ 8,702  20.5  %
Total investment securities $ 45,316  $ 43,911  100.0  % $ 43,648  $ 42,045  100.0  % $ 44,830  $ 42,553  100.0  %
(1) Calculated as a percentage of the total fair value of investment securities.

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The following table presents the weighted average yields for investment securities available for sale and held to maturity at September 30, 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, September 30, 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 23
Weighted Average Yield on Investment Securities

September 30, 2025
Within One Year One to Five Years Five to 10 Years After 10 Years Total
Investment securities available for sale:
U.S. Treasury 4.32  % 4.22  % —  % —  % 4.29  %
Government agency —  3.97  —  —  3.97 
Residential mortgage-backed securities (1)
—  4.25  4.38  4.11  4.19 
Commercial mortgage-backed securities (1)
4.15  4.63  5.30  2.85  3.96 
Corporate bonds 5.96  8.20  6.21  —  7.58 
Municipal bonds —  —  —  6.86  6.86 

Total investment securities available for sale 4.31  % 4.44  % 4.43  % 4.00  % 4.23  %

Investment securities held to maturity:
U.S. Treasury —  % 1.43  % —  % —  % 1.43  %
Government agency 1.32  1.62  1.94  —  1.55 
Residential mortgage-backed securities (1)
—  —  1.03  2.81  2.66 
Commercial mortgage-backed securities (1)
—  1.84  4.65  2.49  2.49 

Supranational securities 1.24  1.64  —  —  1.59 
Other 3.55  —  —  —  3.55 
Total investment securities held to maturity 1.32  % 1.58  % 1.40  % 2.67  % 2.37  %

(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 September 30, 2025. The expected life will differ from contractual maturities because borrowers have the right to prepay the underlying loans.

Assets Held for Sale
Assets held for sale at September 30, 2025 were $112 million, an increase of $27 million or 32% from $85 million at December 31, 2024. The composition of assets held for sale is included in the following table:

Table 24
Assets Held for Sale

Increase (Decrease) from:
dollars in millions September 30, 2025 June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024
Loans and leases:
Commercial (1)
$ 30 $ 40 $ 27 $ (10) (25) % $ 3 11  %
Consumer 80 83 55 (3) (4) % 25 46  %

Loans and leases 110 123 82 (13) (11) % 28 34  %
Operating lease equipment 2 2 3 — —  % (1) (20) %
Total assets held for sale $ 112 $ 125 $ 85 $ (13) (11) % $ 27 32  %

(1) There were no nonaccrual loans held for sale at September 30, 2025 and December 31, 2024, and $22 million as of June 30, 2025.

Loans and Leases
The loan and lease disclosures for 2024 periods presented in this Form 10-Q were recast to reflect the 2025 Loan Class Changes summarized in the “Recent Events” section of this MD&A and further discussed in Note 1—Significant Accounting Policies and Basis of Presentation.

Loans and leases at September 30, 2025 were $144.76 billion, an increase of $4.54 billion or 3% from $140.22 billion at December 31, 2024. Loan growth of $3.26 billion in the SVB Commercial segment was concentrated in Global Fund Banking, partially offset by a decline in Tech and Healthcare. Loan growth in the Commercial Bank segment of $943 million was mainly in our industry verticals, primarily TMT and Healthcare. Loan growth of $338 million in the General Bank segment was primarily in the Wealth portfolio.

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The unamortized discount related to acquired loans was $1.38 billion at September 30, 2025, a decrease of $215 million from $1.60 billion at December 31, 2024.

Refer to Note 4—Loans and Leases for further information.

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

Table 25
Loans and Leases

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024 Balance Increase (Decrease) from:
Balance % to Total Loans Balance % to Total Loans Balance % to Total Loans June 30, 2025 December 31, 2024
Commercial:
Commercial construction $ 5,926  4  % $ 5,714  4  % $ 5,109  4  % $ 212  4  % $ 817  16  %
Owner occupied commercial mortgage 17,232  12  17,053  12  16,842  12  179  1  390  2 
Non-owner occupied commercial mortgage 15,645  11  16,100  11  16,194  12  (455) (3) (549) (3)
Commercial and industrial 41,172  28  40,658  30  40,737  28  514  1  435  1 
Leases 2,066  1  2,028  1  2,014  1  38  2  52  3 
Global fund banking 31,615  22  28,677  20  27,904  20  2,938  10  3,711  13 
Investor dependent 2,772  2  2,777  2  3,193  3  (5) —  (421) (13)
Total commercial $ 116,428  80  % $ 113,007  80  % $ 111,993  80  % $ 3,421  3  % $ 4,435  4  %
Consumer:
Residential mortgage $ 23,036  16  % $ 23,059  16  % $ 23,152  16  % $ (23) —  % $ (116) (1) %
Revolving mortgage 2,794  2  2,736  2  2,567  2  58  2  227  9 
Consumer auto 1,463  1  1,490  1  1,523  1  (27) (2) (60) (4)
Consumer other 1,037  1  977  1  986  1  60  6  51  5 
Total consumer $ 28,330  20  % $ 28,262  20  % $ 28,228  20  % $ 68  —  % $ 102  —  %
Total loans and leases $ 144,758  100  % $ 141,269  100  % $ 140,221  100  % $ 3,489  2  % $ 4,537  3  %
Allowance for loan and lease losses (1,652) (1,672) (1,676)
Net loans and leases $ 143,106  $ 139,597  $ 138,545 

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 26
Operating Lease Equipment, Net

dollars in millions Increase (Decrease) from:
September 30, 2025 June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024
Railcars and locomotives $ 8,709  $ 8,716  $ 8,573  $ (7) —  % $ 136  2  %
Other equipment 737  750  750  (13) (2) (13) (2)
Total (1)
$ 9,446  $ 9,466  $ 9,323  $ (20) —  % $ 123  1  %

(1)     Includes off-lease rail equipment of $223 million at September 30, 2025, $242 million at June 30, 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 September 30, 2025 totaled $159.11 billion, an increase of $5.47 billion or 4% from $153.65 billion at December 31, 2024. The increase from December 31, 2024 was mainly due to deposit growth, as well as the 2025 Debt Issuances, partially offset by the Linked Quarter Debt Redemption as further discussed below.

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Deposits
Total deposits at September 30, 2025 were $163.19 billion, an increase of $7.96 billion or 5% from $155.23 billion at December 31, 2024.

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

The following table summarizes the types of deposits:

Table 27
Deposits

dollars in millions Increase (Decrease) from:
September 30, 2025 June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024
Noninterest-bearing demand $ 42,752  $ 40,879  $ 38,633  $ 1,873  5  % $ 4,119  11  %
Checking with interest 23,731  23,283  25,343  448  2  (1,612) (6)
Money market 38,718  37,654  35,722  1,064  3  2,996  8 
Savings 46,915  46,877  42,278  38  —  4,637  11 
Time 11,074  11,242  13,253  (168) (2) (2,179) (16)
Interest-bearing deposits 120,438  119,056  116,596  1,382  1  3,842  3 
Total deposits $ 163,190  $ 159,935  $ 155,229  $ 3,255  2  % $ 7,961  5  %
Noninterest-bearing deposits to total deposits 26.2  % 25.6  % 24.9  %

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.

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 September 30, 2025 were in North Carolina, South Carolina, and California, which represented approximately 25.0%, 7.5%, and 7.0%, respectively, of total deposits.

The Direct Bank had $45.15 billion or 27.7% of our total deposits as of September 30, 2025. The Direct Bank deposits mainly consist of savings deposit accounts.

SVB Commercial segment deposits as of September 30, 2025 were $39.89 billion or 24.4% of total deposits and are primarily concentrated in online banking. Deposits in the SVB Commercial segment include large dollar accounts with private equity and venture capital clients, primarily in the technology, life science and healthcare industries.

Deposit accounts with balances in excess of $50 million totaled approximately $6.20 billion as of September 30, 2025, compared to approximately $8.01 billion as of December 31, 2024.

Brokered deposits, included in time deposits in the preceding table, are a source of deposit funding but remain an immaterial amount of total deposits at less than 1% as of September 30, 2025 and 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 $59.75 billion, which represented approximately 36.6% of total deposits at September 30, 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.

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The following table provides the expected maturity of time deposits with balances in excess of $250,000 as of September 30, 2025:

Table 28
Maturities of Time Deposits In Excess of $250,000

dollars in millions September 30, 2025
Time deposits maturing in:
Three months or less $ 483 
Over three months through six months 467 
Over six months through 12 months 321 
More than 12 months 14 
Total $ 1,285 

Borrowings
Total borrowings at September 30, 2025 were $38.68 billion, an increase of $1.62 billion or 4% from $37.05 billion at December 31, 2024. The increase from December 31, 2024 primarily related to the 2025 Debt Issuances (refer to the table below), partially offset by the Linked Quarter Debt Redemption.

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

Table 29
Borrowings

dollars in millions Increase (Decrease) from:
September 30, 2025 June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024
Securities sold under agreements to repurchase $ 423  $ 471  $ 367  $ (48) (10) % $ 56  15  %

Federal Deposit Insurance Corporation
   3.500% fixed rate note due March 2028 (1)
35,854  35,841  35,816  13  —  38  — 
Senior Unsecured Borrowings
5.231% fixed-to-floating rate notes due March 2031 (2)
497  497  —  —  —  497  100 
   6.000% fixed rate notes due April 2036 58  58  58  —  —  —  — 
Subordinated debt
6.125% fixed rate notes due March 2028 434  437  445  (3) (1) (11) (2)
3.375% fixed-to-floating rate notes due March 2030 (3)
—  —  350  —  —  (350) (100)
5.600% fixed rate reset notes due September 5, 2035 (4)
597  —  —  597  100  597  100 
6.254% fixed-to-fixed rate notes due March 2040 (5)
745  745  —  —  —  745  100 

Capital lease obligations 67  63  15  4  6  52  347 
Total borrowings $ 38,675  $ 38,112  $ 37,051  $ 563  2  % $ 1,624  4  %

(1) Issued in connection with the SVBB Acquisition and secured by collateral. Refer to Note 2—Business Combinations and Note 4—Loans and Leases. The unamortized discount related to this borrowing was $137 million, $150 million, and $176 million at September 30, 2025, June 30, 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).

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The following summarizes the 2025 Debt Issuances:

Table 30
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 notice of proposed rulemaking (“NPR”) issued by the federal banking agencies discussing, among other items, the proposed requirement to maintain a certain level of long-term debt that would be available to absorb losses in the event of failure as further discussed in the “Regulatory Considerations” section in Item 1. Business of the 2024 Form 10-K.

Refer to the “Liquidity Risk” section of this MD&A and Note 9—Borrowings for further information regarding liquidity and borrowings.

Other Assets and Liabilities    

The following table includes the components of other assets:

Table 31
Other Assets

dollars in millions Increase (Decrease) from:
September 30, 2025 June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024
Affordable housing tax credit and other unconsolidated investments (1)
$ 2,831  $ 2,592  $ 2,516  $ 239  9  % $ 315  13  %
Accrued interest receivable 945  902  902  43  5  43  5 
Fair value of derivative financial instruments 570  626  660  (56) (9) (90) (14)
Pension and other retirement plan assets 670  671  658  (1) —  12  2 
Right of use assets for operating leases, net 305  318  316  (13) (4) (11) (4)
Income tax receivable 494  500  505  (6) (1) (11) (2)
Counterparty receivables 142  164  69  (22) (14) 73  105 
Bank-owned life insurance 108  107  106  1  1  2  2 
Nonmarketable equity securities 160  140  127  20  14  33  26 
Other real estate owned 95  97  56  (2) (2) 39  71 
Mortgage servicing rights 30  29  27  1  5  3  12 
Federal Home Loan Bank stock 20  19  20  1  4  —  — 
Other 738  899  778  (161) (18) (40) (5)
Total other assets $ 7,108  $ 7,064  $ 6,740  $ 44  1  % $ 368  6  %

(1)     Refer to Note 8—Variable Interest Entities for additional information.

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The following table includes the components of other liabilities:

Table 32
Other Liabilities

dollars in millions Increase (Decrease) from:
September 30, 2025 June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024
Deferred taxes $ 3,580  $ 3,560  $ 3,534  $ 20  1  % $ 46  1  %
Commitments to fund tax credit investments 1,295  1,163  1,214  132  11  81  7 
Accrued personnel cost (1)
825  697  1,024  128  18  (199) (19)
Fair value of derivative financial instruments 520  631  625  (111) (18) (105) (17)
Lease liabilities 341  356  357  (15) (4) (16) (4)
Reserve for off-balance sheet credit exposure 265  288  278  (23) (8) (13) (5)
Accrued interest payable 105  120  134  (15) (13) (29) (22)
Accounts payable and other 1,380  1,418  1,030  (38) (3) 350  34 
Total other liabilities $ 8,311  $ 8,233  $ 8,196  $ 78  1  % $ 115  1  %

(1) Includes accruals for annual incentive compensation which is typically paid during the first quarter. Additionally, accrued personnel cost can fluctuate based on timing of the payroll cycle.

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 $265 million at September 30, 2025, a decrease of $13 million compared to $278 million at December 31, 2024 and of $23 million compared to $288 million at June 30, 2025. Refer to the “Provision for Credit Losses” section of this MD&A for further discussion. Refer to Note 18—Commitments and Contingencies for information relating to off-balance sheet commitments.

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 Framework and Statement, senior management has primary responsibility for day-to-day management of the risks we face with accountability of and support from all associates. Senior management applies various strategies to reduce the risks to which BancShares may be exposed, with effective challenge 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 Framework. 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 Framework 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, strategic, and reputational 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 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.

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.

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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 the 2024 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 commercial real estate (“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.

Credit Risk

Credit risk is the risk of not collecting payments pursuant to the contractual terms of loans, leases and certain investment securities. 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 Methodology
Our ALLL methodology is discussed further in the 2024 Form 10-K, in the section entitled “Critical Accounting Estimates” of the MD&A and Note 1—Significant Accounting Policies and Basis of Presentation.

The loan and ALLL disclosures for the 2024 periods presented in this Form 10-Q were recast to reflect the 2025 Loan Class Changes summarized in the “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 September 30, 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.

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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 gross domestic product (“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 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 linked quarter. The scenario weighting in the current quarter was unchanged from the linked quarter.

At September 30, 2025, ALLL estimates ranged from approximately $1.41 billion, when weighing the upside scenario 100%, to approximately $2.07 billion when weighting the downside scenario 100%. BancShares management determined that an ALLL of $1.65 billion was appropriate as of September 30, 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 September 30, 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 33
Select Variables in ALLL Weighted-average Scenarios

Assumptions as of September 30, 2025
2025 2026 2027
U.S. unemployment rate (1)
4.5  % 5.4  % 5.4  %
U.S. real GDP (2)
1.3  % 1.0  % 1.6  %
HPI (2)
0.7  % (1.7) % 2.6  %
CRE price index (2)
(1.0) % (3.5) % (0.6) %

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) Represents the projected quarterly average U.S. unemployment rate 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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ALLL and Net Charge-offs
The ALLL and net charge-offs are summarized below.

Table 34
ALLL for Loans and Leases

dollars in millions Three Months Ended September 30, 2025
Commercial Consumer Total
Balance at beginning of period $ 1,512  $ 160  $ 1,672 

Provision (benefit) for loan and lease losses 238  (24) 214 

Charge-offs (244) (12) (256)
Recoveries 18  4  22 

Balance at end of period $ 1,524  $ 128  $ 1,652 
Net charge-off ratio 0.65  %
Net charge-offs $ 226  $ 8  $ 234 
Average loans $ 142,857 
Percent of loans in each category to total loans 80  % 20  % 100  %

Three Months Ended June 30, 2025
Commercial Consumer Total
Balance at beginning of period $ 1,517  $ 163  $ 1,680 

Provision for loan and lease losses 111  —  111 

Charge-offs (137) (7) (144)
Recoveries 21  4  25 

Balance at end of period $ 1,512  $ 160  $ 1,672 
Net charge-off ratio 0.33  %
Net charge-offs $ 116  $ 3  $ 119 
Average loans $ 141,791 
Percent of loans in each category to total loans 80  % 20  % 100  %

Three Months Ended September 30, 2024
Commercial Consumer Total
Balance at beginning of period $ 1,547  $ 153  $ 1,700 

Provision for loan and lease losses 123  —  123 

Charge-offs (169) (8) (177)
Recoveries 27  5  32 

Balance at end of period $ 1,528  $ 150  $ 1,678 
Net charge-off ratio 0.42  %
Net charge-offs $ 142  $ 3  $ 145 
Average loans $ 139,014 
Percent of loans in each category to total loans 79  % 21  % 100  %

The ALLL at September 30, 2025 was $1.65 billion, representing a decrease of $20 million compared to June 30, 2025. The decrease was driven by improvements in the economic outlook and other changes, including the elimination of reserves related to Hurricane Helene, partially offset by higher specific reserves for individually evaluated loans, and growth in global fund banking loans which have a lower loss rate relative to our other portfolios.

Net charge-offs for the current quarter were $234 million, an increase of $115 million from $119 million for the linked quarter. The increase was mainly due to an $82 million charge-off on a single supply chain finance client in the Commercial Bank segment.
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Table 35
ALLL for Loans and Leases

dollars in millions Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024
Commercial Consumer Total Commercial Consumer Total
Balance at beginning of period $ 1,518  $ 158  $ 1,676  $ 1,581  $ 166  $ 1,747 

Provision (benefit) for loan and lease losses 487  (14) 473  316  (5) 311 

Charge-offs (540) (27) (567) (443) (21) (464)
Recoveries 59  11  70  74  10  84 

Balance at end of period $ 1,524  $ 128  $ 1,652  $ 1,528  $ 150  $ 1,678 
Net charge-off ratio 0.47  % 0.37  %
Net charge-offs $ 481  $ 16  $ 497  $ 369  $ 11  $ 380 
Average loans $ 141,818  $ 136,723 
Percent of loans in each category to total loans 80  % 20  % 100  % 79  % 21  % 100  %

The ALLL at September 30, 2025 was $1.65 billion, representing a decrease of $24 million from December 31, 2024, mainly due to the changes discussed above, and a modest shift in our weighting from the downside to baseline economic scenario in the linked quarter as further discussed in the “ALLL Methodology” section of this MD&A, partially offset by the impact of loan growth.

Net charge-offs for the current YTD were $497 million, an increase of $117 million from $380 million for the prior YTD. The higher net charge-offs within commercial loans were mainly due to the commercial and industrial loan class, which included the previously discussed charge-off on a single supply chain finance client, partially offset by lower net charge-offs in the investor dependent loan class.

Table 36
ALLL Ratios

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024
ALLL $ 1,652  $ 1,672  $ 1,676 
Total loans and leases $ 144,758  $ 141,269  $ 140,221 
ALLL to total loans and leases 1.14  % 1.18  % 1.20  %
Commercial loans and leases:
ALLL - commercial $ 1,524  $ 1,512  $ 1,518 
Commercial loans and leases $ 116,428  $ 113,007  $ 111,993 
Commercial ALLL to commercial loans and leases 1.31  % 1.34  % 1.35  %
Consumer loans:
ALLL - consumer $ 128  $ 160  $ 158 
Consumer loans $ 28,330  $ 28,262  $ 28,228 
Consumer ALLL to consumer loans 0.45  % 0.56  % 0.56  %

The ALLL as a percentage of total loans and leases at September 30, 2025 was 1.14%, compared to 1.18% at June 30, 2025 and 1.20% at December 31, 2024. The trends in the ALLL are discussed above.

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Table 37
ALLL by Loan Class

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024
ALLL ALLL as a Percentage of Loans ALLL ALLL as a Percentage of Loans ALLL ALLL as a Percentage of Loans
Commercial
Commercial construction $ 75  1.27  % $ 67  1.17  % $ 53  1.03  %
Owner occupied commercial mortgage 52  0.30  53  0.31  51  0.30 
Non-owner occupied commercial mortgage 333  2.13  318  1.98  340  2.10 
Commercial and industrial 768  1.87  781  1.92  768  1.88 
Leases 34  1.65  36  1.75  36  1.80 
Global fund banking 61  0.19  80  0.28  75  0.27 
Investor dependent 201  7.24  177  6.37  195  6.10 
Total commercial 1,524  1.31  1,512  1.34  1,518  1.35 
Consumer
Residential mortgage 69  0.30  89  0.39  85  0.37 
Revolving mortgage 22  0.78  19  0.70  21  0.83 
Consumer auto 10  0.66  9  0.63  5  0.35 
Consumer other 27  2.54  43  4.32  47  4.75 
Total consumer 128  0.45  160  0.56  158  0.56 

Total ALLL $ 1,652  1.14  % $ 1,672  1.18  % $ 1,676  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 on the ALLL models. We continuously monitor and update our ALLL estimation methodology, as appropriate. During the current quarter, we updated our PD, LGD, and exposure at default methodology for the global fund banking, investor dependent, residential mortgage, and consumer other portfolios, which contributed to the changes in the ALLL compared to the linked quarter for those portfolios.

Credit Metrics
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 the 2024 Form 10-K.

Table 38
Non-Performing Assets

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024
Nonaccrual loans:
Commercial loans $ 1,194  $ 1,107  $ 1,003 
Consumer loans 212  212  181 
Total nonaccrual loans 1,406  1,319  1,184 
Other real estate owned and repossessed assets 98  103  64 
Total nonperforming assets $ 1,504  $ 1,422  $ 1,248 

Past due loans:
Commercial loans $ 699  $ 515  $ 495 
Consumer loans 198  213  256 
Total past due loans $ 897  $ 728  $ 751 

Total loans, leases, other real estate owned, and repossessed assets $ 144,856  $ 141,372  $ 140,285 
ALLL to total loans and leases 1.14  % 1.18  % 1.20  %
Ratio of total nonperforming assets to total loans, leases, other real estate owned and repossessed assets 1.04  1.01  0.89 
Ratio of nonaccrual loans and leases to total loans and leases 0.97  0.93  0.84 
Ratio of ALLL to nonaccrual loans and leases 117.41  126.75  141.58 

Nonaccrual loans and leases at September 30, 2025 were $1.41 billion, representing increases of $222 million and $87 million compared to December 31, 2024 and June 30, 2025, respectively, mainly due to a small number of larger balance individually evaluated commercial loans.
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OREO and repossessed assets were $98 million at September 30, 2025 compared to $64 million at December 31, 2024 and $103 million at June 30, 2025. The increase of $34 million compared to December 31, 2024 mainly reflects additional foreclosed CRE properties.

Delinquencies
Accruing loans 30 days or more past due were 0.62% of total loans at September 30, 2025, compared to 0.54% at December 31, 2024, and 0.52% at June 30, 2025. Delinquency status by loan class is presented in Note 4—Loans and Leases.

CRE Portfolio
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 39
Commercial Real Estate Portfolio (1)

dollars in millions September 30, 2025 June 30, 2025
Balance % to Total
Loans and Leases Balance % to Total
Loans and Leases
Multi-Family $ 5,116  3.53  % $ 5,151  3.65  %
Medical Office 3,872  2.67  3,829  2.71 
Industrial/Warehouse 3,568  2.47  3,697  2.62 
General Office 2,123  1.47  2,218  1.57 
Retail 1,764  1.22  1,714  1.21 
Healthcare 1,186  0.82  1,330  0.94 
Hotel/Motel 867  0.60  867  0.61 
Other 4,907  3.39  4,733  3.35 
Total $ 23,404  16.17  % $ 23,539  16.66  %

(1) The definition of CRE in this table is aligned with the Federal Reserve and FDIC guidance on CRE and includes the following: construction loans, loans where the primary repayment is from third party rental income, and loans not secured by real estate but for the purpose of real estate. This table excludes the owner occupied commercial mortgage loan class.

Evolving macroeconomic and social conditions (including the shift to more 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. Select metrics for our General Office portfolio are summarized in the following table:

Table 40
Select General Office Loan Metrics

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024
% of total loans and leases 1.47   % 1.57   % 1.77   %
% of CRE loans 9.07   % 9.42   % 10.81   %
Average loan balance $ 2  $ 2  $ 2 
Net charge-offs (YTD annualized %) 4.06   % 4.09   % 3.95   %
Delinquencies as a % of General Office loans 9.09   % 6.59   % 10.92   %
Non-performing loans as a % of General Office loans 11.27   % 9.03   % 12.10   %
ALLL ratio 4.80   % 4.59   % 4.59   %

Loans to Nondepository Financial Institutions (“NDFIs”)
As of September 30, 2025, loans to NDFIs were approximately $33.59 billion, comprised of the following:
• Approximately $31.25 billion of loans to NDFIs was included in global fund banking loans, mainly consisting of capital call lines of approximately $28.64 billion, the repayment of which is dependent on the payment of capital calls by the underlying limited partner investors in funds managed by certain private equity and venture capital firms. The credit quality is strong for capital call lines based on the structural protection provided by the funds and the underlying investors. Global fund banking loans have a lower loss rate relative to our other loan portfolios. As of September 30, 2025, the ALLL was 0.19% of global fund banking loans, compared to 1.14% of total loans.
• Substantially all of the $2.34 billion remainder of loans to NDFIs was included in commercial and industrial loans. As of September 30, 2025, the ALLL was 1.87% of commercial and industrial loans, compared to 1.14% of total loans.

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Concentration Risk
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 risk, such as our concentrations of real estate secured loans, revolving mortgage loans and healthcare-related loans. Additionally, commercial loans may be concentrated in loans with large balances and loans in certain industries and customer groups, including private equity and venture capital.

Loan concentration data regarding our commercial and consumer loan portfolios is summarized below.

Commercial Loan Concentrations
Current quarter changes to loan classes are discussed above under “Recent Events — 2025 Loan Class Changes” and in Note 1—Significant Accounting Policies and Basis of Presentation. Concentration disclosures for the linked quarter and at December 31, 2024 included in this Form 10-Q were recast to reflect the 2025 Loan Class Changes.

Geographic Concentrations
The following table summarizes state concentrations of 5.0% or greater of our loans. Data is based on obligor location.

Table 41
Commercial Loans and Leases - Geography

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024
State
California $ 25,718  22.1  % $ 25,874  22.9  % $ 24,491  21.9  %
New York 11,796  10.1  10,470  9.3  10,202  9.1 
North Carolina 10,986  9.4  11,051  9.8  10,985  9.8 
Texas 8,659  7.4  8,620  7.6  8,459  7.6 
Massachusetts 7,788  6.7  7,880  7.0  7,259  6.5 
Florida 5,911  5.1  5,629  5.0  5,845  5.2 
All other states 42,685  36.7  40,519  35.8  42,217  37.6 
Total U.S. $ 113,543  97.5  % $ 110,043  97.4  % $ 109,458  97.7  %
Total International 2,885  2.5  2,964  2.6  2,535  2.3 
Total $ 116,428  100.0  % $ 113,007  100.0  % $ 111,993  100.0  %

Industry Concentrations
The following table represents loans by industry of obligor:

Table 42
Commercial Loans and Leases - Industry

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024
Finance and Insurance $ 34,662  29.8  % $ 31,902  28.3  % $ 31,162  27.8  %
Real Estate 18,173  15.6  18,348  16.2  17,898  16.0 
Healthcare 11,041  9.5  11,083  9.8  11,053  9.9 
Information 9,641  8.3  9,490  8.4  9,569  8.5 
Business Services 9,383  8.1  9,217  8.2  9,089  8.1 
Transportation, Communication, Gas, Utilities 7,682  6.6  7,909  7.0  8,175  7.3 
Manufacturing 7,138  6.1  6,998  6.2  7,160  6.4 
Retail 4,461  3.8  4,120  3.6  4,141  3.7 
Service Industries 4,231  3.6  4,192  3.7  4,124  3.7 
Wholesale 3,592  3.1  3,481  3.1  3,437  3.1 
Other 6,424  5.5  6,267  5.5  6,185  5.5 
Total $ 116,428  100.0  % $ 113,007  100.0  % $ 111,993  100.0  %

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The following table provides a summary of commercial loans by size and class. The breakout below is based on total client balances (individually or in the aggregate) as of September 30, 2025:

Table 43
Commercial Loans by Size and Class

dollars in millions Less Than $10 Million $10 to < $30 Million > $30 Million Total Commercial Loans
Commercial construction $ 1,221  $ 1,683  $ 3,022  $ 5,926 
Owner occupied commercial mortgage 14,596  2,037  599  17,232 
Non-owner occupied commercial mortgage 6,399  4,923  4,323  15,645 
Commercial and industrial 14,983  12,430  13,759  41,172 
Leases 1,633  281  152  2,066 
Global fund banking 1,455  2,976  27,184  31,615 
Investor dependent 1,721  775  276  2,772 
Total $ 42,008  $ 25,105  $ 49,315  $ 116,428 

Consumer Loan Concentrations
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 44
Consumer Loans - Geography

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024
State
California $ 8,324  29.4  % $ 8,335  29.5  % $ 8,655  30.7  %
North Carolina 7,164  25.3  7,067  25.0  6,923  24.5 
South Carolina 3,708  13.1  3,660  12.9  3,607  12.8 
Massachusetts 1,621  5.7  1,644  5.8  1,692  6.0 
Other states 7,513  26.5  7,556  26.8  7,351  26.0 
Total $ 28,330  100.0  % $ 28,262  100.0  % $ 28,228  100.0  %

Market Risk
Interest rate risk management
BancShares is exposed to the risk that changes in market conditions may affect interest rates and negatively impact earnings. 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 Framework and Statement and a range of risk metrics, and BancShares may utilize tools across the balance sheet to adjust its interest rate risk exposures, including through business line actions and actions within the investment, funding and derivative portfolios.

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The composition of our interest rate sensitive assets and liabilities generally results in a net asset-sensitive position for NII Sensitivity, whereby our assets will reprice faster than our liabilities. A component of our interest rate risk management strategy is the use of derivative instruments to manage fluctuations in earnings caused by changes in market interest rates. 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, as well as fair value changes of fixed rate time deposits and long-term debt. Refer to Note 10—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.

Table 45
Net Interest Income Sensitivity Simulation Analysis

Estimated (Decrease) Increase in NII
Change in interest rate (bps) September 30, 2025 June 30, 2025 December 31, 2024
-200 (13.2)  % (12.4)  % (10.6)  %
-100 (6.9) (6.6) (6.1)
+100 8.1  7.8  6.9 
+200 16.0  15.2  11.1 

NII Sensitivity metrics at September 30, 2025, compared to December 31, 2024, were primarily affected by cash increase from deposit growth, debt issuances and investment runoff, as well as impacts from changes in forward rate curve expectations.

As of September 30, 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 64% of our loans have floating contractual reference rates, indexed primarily to SOFR and the U.S. prime rate. Deposit betas are currently modeled to have a portfolio average of approximately 30%-40% over the twelve-month forecast horizon, including 45%-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.

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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 46
Economic Value of Equity Modeling Analysis

Estimated Increase (Decrease) in EVE
Change in interest rate (bps) September 30, 2025 June 30, 2025 December 31, 2024
-200 5.6   % 2.0   % 5.4   %
-100 3.7  2.0  3.1 
+100 (3.7) (2.2) (3.2)
+200 (6.5) (4.0) (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.

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

Table 47
Loan Maturity Distribution

dollars in millions At September 30 2025, Maturing
Within
One Year One to Five
Years Five to 15
Years After 15 Years Total
Commercial
Commercial construction $ 1,394  $ 3,759  $ 730  $ 43  $ 5,926 
Owner occupied commercial mortgage 1,831  8,484  6,477  440  17,232 
Non-owner occupied commercial mortgage 3,223  9,750  1,892  780  15,645 
Commercial and industrial 11,106  24,283  4,781  1,002  41,172 
Leases 641  1,349  76  —  2,066 
Global fund banking 29,044  2,148  423  —  31,615 
Investor dependent 1,164  1,608  —  —  2,772 
Total commercial 48,403  51,381  14,379  2,265  116,428 
Consumer
Residential mortgage 687  2,865  7,736  11,748  23,036 
Revolving mortgage 51  187  1,049  1,507  2,794 
Consumer auto 330  984  149  —  1,463 
Consumer other 323  565  144  5  1,037 
Total consumer 1,391  4,601  9,078  13,260  28,330 
Total loans and leases $ 49,794  $ 55,982  $ 23,457  $ 15,525  $ 144,758 

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As noted above, approximately 64% 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 September 30, 2025:

Table 48
Fixed and Variable Interest Rate Loans

dollars in millions Loans Maturing One Year or After with
Fixed Interest Rates Variable Interest Rates
Commercial
Commercial construction $ 1,403  $ 3,129 
Owner occupied commercial mortgage 13,484  1,917 
Non-owner occupied commercial mortgage 6,198  6,224 
Commercial and industrial 9,925  20,141 
Leases 1,419  6 
Global fund banking 1  2,570 
Investor dependent 5  1,603 
Total commercial 32,435  35,590 
Consumer
Residential mortgage 8,584  13,765 
Revolving mortgage 29  2,714 
Consumer auto 1,133  — 
Consumer other 253  461 
Total consumer 9,999  16,940 
Total loans and leases $ 42,434  $ 52,530 

Liquidity Risk

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.

Liquidity includes available cash and HQLS. At September 30, 2025 we had $61.92 billion of high-quality liquid assets (26.5% of total assets) and $31.35 billion of contingent liquidity sources available. Some of the more significant changes from December 31, 2024 included higher available cash level, due in part from deposit growth, maturing investment securities, and funds received in connection with the 2025 Debt Issuances. Also, we increased our borrowing capacity under agreements with the FRB through expansion of the eligible loan population to targeted loans historically 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.

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Table 49
Liquidity

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024
Available cash
$ 23,917  $ 25,332  $ 20,545 
High-quality liquid securities (1)
38,007  38,284  38,794 
High-quality liquid assets $ 61,924  $ 63,616  $ 59,339 

Current Capacity (2) of Credit Facilities:

FHLB facility (3)
$ 18,022  $ 17,852  $ 16,423 
FRB facility 13,328  10,561  5,475 
FDIC facility (4)
—  —  5,291 
Line of credit —  100  100 
Total contingent sources $ 31,350  $ 28,513  $ 27,289 
Total liquid assets and contingent sources $ 93,274  $ 92,129  $ 86,628 
Total uninsured deposits $ 59,746  $ 57,805  $ 59,510 
Coverage ratio of total liquid assets and contingent sources to uninsured deposits 156  % 159  % 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 September 30, 2025, June 30, 2025 and December 31, 2024.
(3)     Refer to Table 50 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 September 30, 2025 were $163.19 billion, an increase of $7.96 billion or 5% 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 September 30, 2025 were $38.68 billion, an increase of $1.62 billion or 4% from $37.05 billion at December 31, 2024. The increase is primarily due to the 2025 Debt Issuances with aggregate principal amounts totaling $1.85 billion and partially offset by the Linked Quarter Debt Redemption with aggregate principal amounts totaling $350 million, as detailed in the “Interest-bearing Liabilities—Borrowings” 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.

FHLB Capacity
A source of available funds is advances from the FHLB of Atlanta. We may pledge assets for secured borrowing transactions, which include borrowings from the FHLB and/or FRB, or for other purposes as required or permitted by law. The debt issued in conjunction with these transactions is collateralized by certain discrete receivables, securities, loans, leases and/or underlying equipment. Certain related cash balances are restricted.

Table 50
FHLB Balances

dollars in millions September 30, 2025 June 30, 2025 December 31, 2024

Total borrowing capacity $ 19,472  $ 18,552  $ 17,873 
Less:
Advances —  —  — 
Letters of credit (1)
1,450  700  1,450 
Available capacity $ 18,022  $ 17,852  $ 16,423 
Pledged Non-PCD loans $ 31,945  $ 30,835  $ 30,421 

(1)     Letters of credit were established with the FHLB to collateralize public funds. One of the letters of credit expired during the linked quarter and was replaced during the current quarter.

FRB Capacity
Under borrowing arrangements with the FRB, FCB has access to $13.33 billion on a secured basis. We pledged additional loan collateral and increased our borrowing capacity under agreements with the FRB. Loans pledged are disclosed in Note 4—Loans and Leases. There were no outstanding borrowings with the FRB Discount Window at September 30, 2025, June 30, 2025 and December 31, 2024.

101

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 September 30, 2025, representing required and potential cash outflows, including impacts from purchase accounting adjustments and deferred fees. Refer to Note 18—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 51
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 $ 10,820  $ 204  $ 50  $ —  $ 11,074 
Short-term borrowings 423  —  —  —  423 
Long-term borrowings (1) (2)
(40) 36,325  (2) 1,969  38,252 
Total contractual obligations $ 11,203  $ 36,529  $ 48  $ 1,969  $ 49,749 
Commitments:
Financing commitments
$ 25,857  $ 5,798  $ 9,050  $ 11,230  $ 51,935 
Letters of credit
1,840  335  266  195  2,636 
Deferred purchase agreements 1,870  —  —  —  1,870 
Purchase and funding commitments 232  —  —  —  232 
Affordable housing partnerships (1)
565  624  55  51  1,295 
Total commitments $ 30,364  $ 6,757  $ 9,371  $ 11,476  $ 57,968 

(1)     Long-term borrowings are presented net of purchase accounting adjustments of $97 million. On-balance sheet commitments for affordable housing partnerships are included in other liabilities and presented net of a purchase accounting adjustment of $17 million.
(2)     Balance in parenthesis represents the estimated amortization of the purchase accounting adjustment and deferred costs in excess of any principal balance.

Long-term Borrowings
As displayed above in Table 51, 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. We will continue to monitor the interest rate environment and assess whether any 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, and issuance of unsecured debt or other borrowings. At the time of voluntary prepayment or maturity, the interest rates for the potential interest-bearing sources of repayment could be higher than the 3.50% rate.

Refer to the respective “Deposits” and “Borrowings” discussions in the “Interest-bearing Liabilities” section of this MD&A for further details. The Purchase Money Note is discussed further in Note 2—Business Combinations.

102

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 Framework and Statement.

Counterparty credit exposure or counterparty risk is a primary risk of derivative instruments, relating to the ability of a counterparty to perform its financial obligations under the derivative contract. We 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.

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. 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.

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 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.

103

CAPITAL

Capital requirements applicable to BancShares are discussed in the “Regulatory Considerations” section in Item 1. Business of the 2024 Form 10-K, including a discussion of an NPR issued on July 27, 2023 by the federal banking agencies regarding enhanced capital requirements . We will continue to monitor the status of the NPR.

BancShares’ total consolidated assets are between $100 billion and $250 billion, and, as such, BancShares is required to comply with certain enhanced prudential standards applicable to Category IV banking organizations, subject to the applicable transition periods. Additionally, an NPR released by federal banking agencies on August 29, 2023, could change the long-term debt requirements for banks with total consolidated assets of $100 billion or more. If this NPR is finalized as proposed, we expect we would need to issue additional long-term debt to satisfy the requirements. For further discussion, refer to the section entitled “Regulatory Considerations—Enhanced Prudential Standards—Proposed Long-Term Debt & Clean Holding Company Requirements” in Item 1. Business of the 2024 Form 10-K.

BancShares maintains a comprehensive capital adequacy process. BancShares establishes internal capital risk limits and warning thresholds, which utilize Risk-Based and Leverage-Based Capital calculations, internal and external early warning indicators, its capital planning process, and stress testing to evaluate BancShares' capital adequacy for multiple types of risk in both normal and stressed environments. The capital management framework requires contingency plans be defined and may be employed at management’s discretion.

Common and Preferred Stock Dividends
During the first three quarters of 2025, we paid quarterly dividends of $1.95 per share on the Class A common stock and Class B common stock. In October 2025, 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 December 15, 2025 to stockholders of record as of November 28, 2025.

During the first three quarters of 2025, we paid quarterly dividends on our Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock as disclosed in Note 12—Stockholders' Equity. In October 2025, the Board declared dividends on our Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock in accordance with their terms. The dividends are payable on December 15, 2025.

Capital Composition and Ratios
As discussed earlier in the “Recent Events” section of this MD&A, the Board authorized the 2024 SRP and the new 2025 SRP that permitted repurchases upon completion of the 2024 SRP. During the current quarter and current YTD, we repurchased 457,350 and 1,098,992 shares, respectively. Repurchases under the 2025 SRP commenced in September 2025 upon the completion of the 2024 SRP in August 2025. Refer to the “Recent Events” section above for more information and Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds for our monthly repurchase activity during the current quarter.

The following table details the change in outstanding Class A common stock through September 30, 2025. Refer to Note 12—Stockholders' Equity for additional information.

Table 52
Changes in Shares of Class A Common Stock Outstanding

Three Months Ended September 30, 2025 Nine Months Ended September 30, 2025
Class A common stock shares outstanding at beginning of period 12,070,794  12,712,436 
Shares repurchased under authorized repurchase plan (457,350) (1,098,992)

Class A common stock shares outstanding at end of period 11,613,444  11,613,444 

We also had 1,005,185 Class B common stock outstanding at September 30, 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.

104

In accordance with GAAP, the unrealized gains and losses on certain assets and liabilities, net of deferred taxes, are included in accumulated other comprehensive loss within stockholders’ equity. These amounts are excluded from the calculation of our regulatory capital ratios under current regulatory guidelines.

Table 53
Analysis of Capital Adequacy

dollars in millions Basel III Requirements PCA Well Capitalized Thresholds September 30, 2025 June 30, 2025 December 31, 2024
Amount Ratio Amount Ratio Amount Ratio Adjusted Ratio (1)

BancShares
Risk-based capital ratios
Total risk-based capital 10.50  % 10.00  % $ 24,901  14.05  % $ 24,713  14.25  % $ 24,610  15.04  % 14.27  %
Tier 1 risk-based capital 8.50  8.00  21,524  12.15  21,896  12.63  22,137  13.53  12.84 
Common equity Tier 1 7.00  6.50  20,643  11.65  21,015  12.12  21,256  12.99  12.33 
Tier 1 leverage ratio 4.00  5.00  21,524  9.34  21,896  9.62  22,137  9.90  n/a (2)

FCB
Risk-based capital ratios
Total risk-based capital 10.50  % 10.00  % $ 23,912  13.51  % $ 24,361  14.06  % $ 23,975  14.66  % 13.91  %
Tier 1 risk-based capital 8.50  8.00  21,876  12.36  22,289  12.87  21,852  13.37  12.68 
Common equity Tier 1 7.00  6.50  21,876  12.36  22,289  12.87  21,852  13.37  12.68 
Tier 1 leverage ratio 4.00  5.00  21,876  9.51  22,289  9.81  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 September 30, 2025, BancShares and FCB had risk-based capital ratio conservation buffers of 6.05% and 5.51%, respectively, which are in excess of the Basel III conservation buffer of 2.50%. As of December 31, 2024, BancShares and FCB’s 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 September 30, 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.

Dividend Restrictions
Dividends paid from FCB to the Parent Company are the primary source of funds available to the Parent Company for payment of dividends to its stockholders. The Board of Directors of FCB may approve distributions, including dividends, as it deems appropriate, subject to the requirements of the FDIC and the General Statutes of North Carolina, provided that the distributions do not reduce the regulatory capital ratios below the applicable requirements. FCB could have paid additional dividends to the Parent Company in the amount of $6.21 billion while continuing to meet the requirements for well capitalized banks at September 30, 2025. Dividends declared by FCB and paid to the Parent Company amounted to $1.68 billion for the nine months ended September 30, 2025. Payment of dividends is made at the discretion of FCB’s Board of Directors and may be contingent upon satisfactory earnings as well as projected capital needs.

Termination of the Shared-Loss Agreement with the FDIC
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 risk-weighted assets (“RWA”) assumptions permissible for Covered Assets (as defined in Note 2—Business Combinations in our 2024 Form 10-K). 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 “Recent Events” section of this MD&A. FCB and BancShares are not permitted after the Shared-Loss Termination Date to apply the favorable RWA assumptions to assets that were previously Covered Assets under the Shared-Loss Agreement. The table above includes risk-based capital ratios as of December 31, 2024, both including and excluding the impact of the Shared-Loss Agreement to illustrate the approximated decreases in the risk-based capital ratios as a result of entering into the Shared-Loss Termination Agreement. Refer to the “Non-GAAP Financial Measurements” section of this MD&A for further discussion.

105

CRITICAL ACCOUNTING ESTIMATES

The accounting and reporting policies of BancShares are described in Note 1—Significant Accounting Policies and Basis of Presentation in the 2024 Form 10-K.

The ALLL is considered a critical accounting estimate. For more information regarding the ALLL, refer to the “Credit Risk— ALLL Methodology” section of this MD&A and Note 5—Allowance for Loan and Lease Losses.

RECENT ACCOUNTING PRONOUNCEMENTS
The following Accounting Standards Updates (“ASUs”) were issued by the Financial Accounting Standards Board but are not yet effective for BancShares:

Standard Summary of Guidance Effect on BancShares’ Financial Statements

ASU 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures
Issued December 2023
 
This ASU enhances income tax disclosure requirements primarily by requiring disclosure of specific categories in the rate reconciliation table and disaggregation of income taxes paid by jurisdiction. Effective for BancShares beginning with our financial statements for the year ending December 31, 2025. BancShares expects to apply the requirements retrospectively. Implementation of this disclosure-only ASU is not expected to have a material impact on our financial statements.
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. The ASU does not change the requirements for the presentation of expenses on the face of the income statement. Effective for BancShares beginning with our financial statements for the year ending December 31, 2027. Early adoption is permitted. The guidance may be applied prospectively or retrospectively.

We are currently evaluating the impact of this ASU on our footnote disclosures.

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 current conditions as of the balance sheet date do not change for the remaining life of current accounts receivable and current contract assets. Effective for BancShares for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual periods. Early adoption is permitted. If elected, the optional practical expedient is applied prospectively.

We are currently evaluating the impact of this ASU on our financial statements and footnote disclosures.
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 and disclosure of internal-use software costs. This ASU also includes improvements to the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, including methods that entities may use to develop software in the future. The ASU also clarifies the criteria that must be met for entities to begin capitalizing software costs. Effective for BancShares 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. The guidance may be applied using either a prospective, retrospective, or modified transition approach.

We are currently evaluating the impact of this ASU on our financial statements and footnote disclosures.

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.
106

PPNR

PPNR is a non-GAAP measure of profit or loss calculated as net income plus the provision for credit losses and income tax expense (benefit). PPNR is a measure of segment profit or loss that is meaningful because it enables management and external users of financial statements to assess income before income taxes excluding the provision for credit losses, which can be more volatile when economic conditions are more dynamic.

The following table provides a reconciliation of net income, the comparable GAAP measure, to PPNR:

Table 54
PPNR

dollars in millions Three Months Ended September 30, 2025
General Bank Commercial Bank SVB Commercial Rail Corporate Total BancShares
Net income (GAAP) $ 320  $ 18  $ 175  $ 17  $ 38  $ 568 
Plus: provision for credit losses 1  168  22  —  —  191 
Plus: income tax expense (benefit) 109  6  58  5  5  183 
PPNR (non-GAAP) $ 430  $ 192  $ 255  $ 22  $ 43  $ 942 

Three Months Ended June 30, 2025
General Bank Commercial Bank SVB Commercial Rail Corporate Total BancShares
Net income (GAAP) $ 294  $ 102  $ 136  $ 19  $ 24  $ 575 
Plus: provision for credit losses 13  47  55  —  —  115 
Plus: income tax expense (benefit) 101  35  47  6  (6) 183 
PPNR (non-GAAP) $ 408  $ 184  $ 238  $ 25  $ 18  $ 873 

Three Months Ended September 30, 2024
General Bank Commercial Bank SVB Commercial Rail Corporate Total BancShares
Net income (GAAP) $ 202  $ 124  $ 187  $ 20  $ 106  $ 639 
Plus: provision for credit losses 55  11  51  —  —  117 
Plus: income tax expense 99  41  75  8  11  234 
PPNR (non-GAAP) $ 356  $ 176  $ 313  $ 28  $ 117  $ 990 

Nine Months Ended September 30, 2025
General Bank Commercial Bank SVB Commercial Rail Corporate Total BancShares
Net income (GAAP) $ 867  $ 163  $ 477  $ 58  $ 61  $ 1,626 
Plus: provision for credit losses 60  300  100  —  —  460 
Plus: income tax expense (benefit) 298  56  162  19  (1) 534 
PPNR (non-GAAP) $ 1,225  $ 519  $ 739  $ 77  $ 60  $ 2,620 

Nine Months Ended September 30, 2024
General Bank Commercial Bank SVB Commercial Rail Corporate Total BancShares
Net income (GAAP) $ 655  $ 359  $ 594  $ 70  $ 399  $ 2,077 
Plus: provision for credit losses 113  70  93  —  —  276 
Plus: income tax expense 270  127  235  27  120  779 
PPNR (non-GAAP) $ 1,038  $ 556  $ 922  $ 97  $ 519  $ 3,132 

107

Net Rental Income on Operating Lease Equipment for Commercial Bank and Rail Segments

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. Presentation of net rental income for the Commercial Bank and Rail segments also results in the noninterest income, noninterest expense, and revenue subtotals being presented net of depreciation and maintenance. These measures are meaningful because they enable 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 55
Commercial Bank Segment

dollars in millions Three Months Ended Nine Months Ended
September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Rental income on operating leases (GAAP) $ 54  $ 54  $ 57  $ 164  $ 172 
Less: depreciation on operating lease equipment a 43  44  47  131  141 

Net rental income on operating lease equipment (non-GAAP) $ 11  $ 10  $ 10  $ 33  $ 31 

Total noninterest income (GAAP) b $ 155  $ 152  $ 136  $ 432  $ 411 
Noninterest income, net of depreciation (non-GAAP) b-a 112  108  89  301  270 
Total revenue (GAAP) c 458  451  441  1,327  1,327 
Revenue, net of depreciation (non-GAAP) c-a 415  407  394  1,196  1,186 
Total noninterest expense (GAAP) d 266  267  265  808  771 
Noninterest expense, net of depreciation (non-GAAP) d-a 223  223  218  677  630 

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. Due to the nature of our portfolio, which is essentially all operating lease equipment, certain financial measures commonly used by banks, such as NII, are not as meaningful for this 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 56
Rail Segment

dollars in millions Three Months Ended Nine Months Ended
September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Rental income on operating leases (GAAP) $ 219  $ 218  $ 205  $ 651  $ 604 
Less: depreciation on operating lease equipment a 55  56  52  165  152 
Less: maintenance and other operating lease expenses b 67  55  59  180  164 
Net rental income on operating lease equipment (non-GAAP) $ 97  $ 107  $ 94  $ 306  $ 288 

Total noninterest income (GAAP) c $ 221  $ 221  $ 207  $ 658  $ 612 
Noninterest income, net of depreciation and maintenance (non-GAAP) c-a-b 99  110  96  313  296 
Total revenue (GAAP) d 166  168  159  498  476 
Revenue, net of depreciation and maintenance (non-GAAP) d-a-b 44  57  48  153  160 
Total noninterest expense (GAAP) e 144  143  131  421  379 
Noninterest expense, net of depreciation and maintenance (non-GAAP) e-a-b 22  32  20  76  63 

108

NII, NIM, and Interest and Fees on Loans, Excluding PAA

NII and NIM, excluding PAA, and interest and fees on loans, excluding loan PAA are meaningful metrics as they allow management to analyze NII, NIM and loan 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 and fees on loans to interest and fees on loans, excluding loan PAA:

Table 57
NII, NIM, and Interest and Fees on Loans, Excluding PAA

dollars in millions Three Months Ended Nine Months Ended
September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
NII (GAAP) a $ 1,734  $ 1,695  $ 1,796  $ 5,092  $ 5,434 
Loan PAA b 71  75  107  230  415 
Other PAA c (10) (9) (6) (28) (16)
PAA d = (b+c) 61  66  101  202  399 
NII, excluding PAA (non-GAAP) e = (a-d) $ 1,673  $ 1,629  $ 1,695  $ 4,890  $ 5,035 
Annualized NII f = a annualized $ 6,878  $ 6,800  $ 7,147  $ 6,808  $ 7,259 
Annualized NII, excluding PAA g = e annualized 6,637  6,533  6,746  6,537  6,726 
Average interest-earning assets h $ 211,042  $ 208,175  $ 202,199  $ 208,432  $ 200,503 
NIM (GAAP) f/h 3.26  % 3.26  % 3.53  % 3.26  % 3.62  %
NIM, excluding PAA (non-GAAP) g/h 3.15  3.14  3.33  3.13  3.35 

Interest and fees on loans (GAAP) $ 2,300  $ 2,270  $ 2,430  $ 6,806  $ 7,206 
Less: loan PAA b 71  75  107  230  415 
Interest and fees on loans, excluding loan PAA (non-GAAP) $ 2,229  $ 2,195  $ 2,323  $ 6,576  $ 6,791 

109

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 under the Shared-Loss Agreement. Adjusted risk-based capital ratios exclude the favorable impact of the Shared-Loss Agreement and are meaningful metrics as these ratios are expected to decrease in future periods.

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 58
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  %

110

Forward-Looking Statements

Statements in this Quarterly Report on Form 10-Q 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 or trade barriers on trading partners), political (including impacts of the U.S. government shutdown), geopolitical (including conflicts in Ukraine and the Middle East), 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 and the proposed interagency rule on regulatory capital, 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 can be found in the 2024 Form 10-K and BancShares’ other filings with the Securities and Exchange Commission.

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Item 3. 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 3. Quantitative and Qualitative Disclosures about Market Risk is set forth in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations within the “Risk Management” section and in Item 1. Financial Statements within Note 10—Derivative Financial Instruments and Note 11—Fair Value of this Form 10-Q.

Item 4. Controls and Procedures.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision of and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that we are able to record, process, summarize and report in a timely manner the information required to be disclosed in the reports we file under the Exchange Act.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
We review our internal controls over financial reporting on an ongoing basis and make changes intended to ensure the quality of our financial reporting. There were no changes in our internal control over financial reporting during the third quarter of 2025 that have materially affected, or are reasonably likely to materially affect, BancShares’ internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Parent Company and certain of its subsidiaries are named as defendants in various legal actions arising from our normal business activities in which damages in various amounts were claimed. Although the amount of any ultimate liability with respect to those matters cannot be determined, in the opinion of management, no legal actions currently exist that would be material to BancShares’ consolidated financial statements. Additional information relating to legal proceedings is set forth in Note 18—Commitments and Contingencies of the Notes to Consolidated Financial Statements contained in Item 1. Financial Statements.

Item 1A. Risk Factors.

Except for the updated risk factor set forth below, there have been no material changes in the risk factors during 2025 from those reported in our 2024 Form 10-K . For a discussion of the risks and uncertainties that management believes are material to an investment in us, refer to Part I, Item 1A. Risk Factors , of our 2024 Form 10-K , and Forward-Looking Statements of this Form 10-Q.

Changes in domestic and foreign trade policies, including the imposition of tariffs and retaliatory tariffs, and other factors beyond our control may adversely impact our business, financial condition, and results of operations.

The U.S. government recently announced changes to its trade policies, including increasing tariffs on imports, in some cases significantly, and potentially renegotiating or terminating existing trade agreements. The current tariff environment is dynamic and uncertain, as the U.S. government has announced widespread tariff reform, with the effectiveness delayed in many cases. Changes to tariffs and other trade restrictions can be announced at any time with little or no notice. We cannot predict with certainty the future trade policy of the United States or other countries. Additionally, potential tariffs or other U.S. trade policy measures have triggered retaliatory actions by other countries such as China. Increased tariffs and trade restrictions may cause the prices of our customers’ products to increase, which could reduce demand for such products, or reduce our customers’ margins, and adversely impact their revenues, financial results, and ability to service debt. This, in turn, could adversely impact our financial condition and results of operations. Tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S. and global financial markets and economic conditions. Disruptions and volatility in the financial markets may lead to adverse changes in the availability, terms and cost of capital, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(c) The following table summarizes our monthly Class A common stock repurchase activity during the three months ended September 30, 2025. Subsequent to September 30, 2025, BancShares purchased an additional 183,077 shares of Class A common stock through October 31, 2025 under the 2025 SRP.

Table 59
Issuer Purchases of Class A Common Stock

dollars in millions, except per share data Total Number of Class A Shares Purchased Average Price Paid per Share Total Number of Shares Repurchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet be Purchased Under Plan

Repurchases from July 1 - 31, 2025 147,365  $ 2,094.63  147,365  $ 302 
Repurchases from August 1 - 31, 2025 (1)
157,722  1,916.88  157,722  4,000 
Repurchases from September 1 - 30, 2025 152,263  1,898.02  152,263  3,711 
Total 457,350  $ 1,967.87  457,350  $ 3,711 

(1) Represents the final repurchases completed under the 2024 SRP.

On July 25, 2024, BancShares announced that the Board authorized the 2024 SRP, which allowed BancShares to repurchase shares of its Class A common stock in an aggregate amount up to $3.5 billion through December 31, 2025. The remaining authorized amount was utilized for share repurchases during the third quarter of 2025 until the 2024 SRP was completed at the end of August 2025.

On July 25, 2025, BancShares announced that the Board authorized the new 2025 SRP, which allows BancShares to repurchase shares of its Class A common stock in an aggregate amount up to $4.0 billion. Repurchases under the 2025 SRP commenced in September 2025 upon completion of the 2024 SRP at the end of August 2025 and may be made through December 31, 2026.

Under the authorized 2025 SRP, shares of BancShares’ Class A common stock may be purchased from time to time on the open market or in privately negotiated transactions, including through a Rule 10b5-1 plan, but the Board’s action does not obligate BancShares to repurchase any minimum or particular number of shares, and repurchases may be suspended or discontinued at any time (subject to the terms of any Rule 10b5-1 plan in effect) without prior notice.

Item 5. Other Information.

(c) Director and Officer 10b5-1 Trading Arrangements

During the third quarter of 2025, none of BancShares’ directors or officers adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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Item 6. Exhibits.

EXHIBIT INDEX

4.1 Instruments defining the rights of holders of long-term debt will be furnished to the SEC upon request.
4.2 Amendment No. 1 to Custodial and Paying Agency Agreement, dated July 18, 2025, by and among First-Citizens Bank & Trust Company, individually and as custodian and debtor, U.S. Bank Trust Company, National Association, as paying agent, and the Federal Deposit Insurance Corporation, as receiver for Silicon Valley Bridge Bank, National Association, as notes designee and as collateral agent . (filed herewith)

31.1 Certification of Chief Executive Officer (filed herewith)

31.2 Certification of Chief Financial Officer (filed herewith)

32.1 Certification of Chief Executive Officer (filed herewith)

32.2 Certification of Chief Financial Officer (filed herewith)

*101.INS Inline XBRL Instance Document (filed herewith)
*101.SCH Inline XBRL Taxonomy Extension Schema (filed herewith)
*101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase (filed herewith)
*101.LAB Inline XBRL Taxonomy Extension Label Linkbase (filed herewith)
*101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase (filed herewith)
*101.DEF Inline XBRL Taxonomy Definition Linkbase (filed herewith)
*104 Cover Page Interactive Data File (embedded within the Inline XBRL document filed as Exhibit 101)

* Interactive data files are furnished but not filed for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, and Section 18 of the Securities Exchange Act of 1934, as amended.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.  

Date: November 7, 2025
First Citizens BancShares, Inc.
(Registrant)

By:   /s/ Craig L. Nix
Craig L. Nix
Chief Financial Officer

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