10-Q – 2026-05-08 – fcnca-20260331.htm

Nonaccrual loans and leases at March 31, 2026 were $1.43 billion (0.96% of loans), an increase of $122 million compared to $1.31 billion (0.88% of loans) at December 31, 2025, largely concentrated in a small number of commercial real estate loans that were individually evaluated, contributing to the increase in specific reserves. Nonaccrual loans over an established threshold are individually evaluated for specific ALLL reserves as discussed in Note 1—Significant Accounting Policies and Basis of Presentation of the 2025 Form 10-K.

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

Table 38
Commercial Real Estate Portfolio

dollars in millions March 31, 2026
Balance % to Total Loans and Leases
Multi-family $ 5,219  3.5  %
Medical office 3,538  2.4 
Industrial, including warehouses 3,005  2.0 
Data center 2,531  1.7 
General office 1,951  1.3 
Healthcare 1,825  1.2 
Retail 1,573  1.0 
Hotel and motel 867  0.6 
Other 3,198  2.2 
Total $ 23,707  15.9  %

Evolving macroeconomic and social conditions (including the shift to hybrid work arrangements) may result in changes for general office demand moving forward. Our general office portfolio has experienced more negative credit quality trends relative to our other commercial real estate portfolios. Our general office portfolio is 1.31% of total loans and leases and 8.23% of total commercial real estate at March 31, 2026. Select metrics for our general office portfolio are summarized in the following table:

Table 39
General Office Portfolio

dollars in millions March 31, 2026

General office as a percentage of total loans and leases 1.31   %
General office as a percentage of commercial real estate loans 8.23   %

Net charge-offs as a percentage of general office 0.56   %
Percentage of general office 30 days or more past due 8.08   %
Nonaccrual loans as a percentage of general office
9.25   %
ALLL as a percentage of general office 4.52   %

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

Commercial Loan Concentration

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

Table 40
Commercial Loans and Leases - Industry

dollars in millions March 31, 2026 December 31, 2025
Finance and insurance $ 39,540  32.4  % $ 38,417  31.8  %
Real estate 17,678  14.5  17,911  14.8 
Healthcare 11,196  9.2  11,155  9.2 
Information 10,015  8.2  9,699  8.0 
Business services 9,584  7.9  9,601  8.0 
Transportation, communication, gas, utilities 7,631  6.3  7,567  6.3 
Manufacturing 7,134  5.8  7,137  5.9 
Retail 4,466  3.7  4,329  3.6 
Service industries 4,271  3.5  4,274  3.5 
Wholesale 3,622  3.0  3,571  3.0 
Other 6,813  5.5  7,073  5.9 
Total $ 121,950  100.0  % $ 120,734  100.0  %

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Loans to non-depository financial institutions (“NDFIs”)
Loans to borrowers in the finance and insurance industry were $39.54 billion or 32.4% of commercial loans and leases at March 31, 2026, compared to $38.42 billion or 31.8% of commercial loans and leases at December 31, 2025. Loans to NDFIs comprised 98.1% of our loans to borrowers in the finance and insurance industry at March 31, 2026. Our NDFI portfolio composition is described below.

As of March 31, 2026, loans to NDFIs were $38.78 billion. Capital call lines comprise $32.27 billion, or 83%, of the NDFI portfolio. The primary source of repayment for capital call lines is the capital commitments of the underlying limited partner (“LP”) investors in funds managed by certain private equity and venture capital firms. Capital calls are contractual obligations of the LPs and are not subject to the performance of the underlying portfolio of investments. Capital call lines are typically governed by financial covenants oriented towards ensuring that the funds’ remaining callable capital is sufficient to repay the loan, and larger commitments (typically provided to larger private equity funds) are typically secured by an assignment of the general partner's right to call capital from the fund's LP investors. The credit quality is strong for capital call lines based on the structural protection provided by the funds and the underlying investors. Capital call lines have a significantly lower loss rate relative to our other loan portfolios. As of March 31, 2026, the ALLL was 0.09% of capital call lines, compared to 1.05% of total loans.

The loans to NDFIs that are not capital call lines (the “Other NDFI Portfolios”) have balances totaling $6.51 billion at March 31, 2026, and the largest portfolios are described below:
• The net asset value portfolio ($2.24 billion) consists of: (i) loans to private equity funds collateralized by the funds’ portfolios of direct equity investments in private companies, and (ii) loans to predominantly secondary funds collateralized by the funds’ portfolios of investments in LP interests in private funds and/or co-investment vehicles.
• Leveraged fund lines ($1.4 billion) are lines of credit provided to private credit funds and are collateralized by portfolios of the underlying assets, primarily first lien loans.
• Warehouse lines ($918 million) are asset-based lines of credit that finance cash flows for large pools of assets, such as accounts receivable and loans, that the borrower (or sponsor) typically sell or transfer to special purpose vehicle entities.
• Specialty finance ($617 million) includes asset-based lending facilities to lenders that are primarily investing in first lien senior debt.

The Other NDFI Portfolios are included in commercial and industrial loans and leases. As of March 31, 2026, the ALLL was 1.77% of commercial and industrial loans and leases.

Through our credit risk management practices and our targeted analysis of the NDFI portfolios, we determined that the ALLL was appropriate.

NDFIs could be subject to a less stringent regulatory environment than FDIC-insured depository institutions or BHCs as further discussed in Item 1A. Risk Factors of the 2025 Form 10-K. We strive to mitigate the credit risk of our loans to NDFIs through our underwriting and credit monitoring processes. As discussed above, 83% of our NDFI portfolio at March 31, 2026 is comprised of capital call lines which have strong credit quality based on the structural protection provided by the funds and the underlying investors. Additionally, we establish advance rates (the percentage of the collateral value FCB will lend to the borrower) for loans in the Other NDFI Portfolios commensurate with the risks of the underlying collateral type, structural protection of the funds or investors, diversification of the funds, and financial strength of the borrower (or sponsor).

Real estate secured loans
Our commercial real estate portfolio comprises the vast majority of the real estate industry loans in the table above, which is based on the industry of the obligor. Additionally, we have commercial real estate and owner occupied commercial mortgage loans that are secured by real estate, but are categorized in other industries in the table above. At March 31, 2026, the combined balances of our commercial real estate and owner occupied commercial mortgage loans were $41.21 billion, or 34% of commercial loans and leases, compared to $41.44 billion or 34% at December 31, 2025. We have historically carried a concentration of real estate secured loans, but actively mitigate exposure through underwriting policies, which primarily rely on borrower cash flow rather than underlying collateral values. When we do rely on underlying real property values, we prefer financing secured by owner-occupied real property.

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Healthcare and information industries
The healthcare and information industries in the table above largely consist of the healthcare, life sciences, and technology sectors, which include clients in our Commercial Finance, Global Fund Banking, and Technology and Healthcare Banking within our Commercial Bank segment. Loans and leases to borrowers in medical, dental or other healthcare fields were $11.20 billion as of March 31, 2026, which represents 9.2% of commercial loans and leases, compared to $11.16 billion or 9.2% of commercial loans and leases at December 31, 2025. Loans and leases to borrowers in the information industry were $10.02 billion as of March 31, 2026, which represents 8.2% of commercial loans and leases, compared to $9.70 billion or 8.0% of commercial loans and leases at December 31, 2025. We actively mitigate credit risk exposure of these industry concentrations through our underwriting policies that emphasize reliance on adequate levels of borrower repayment sources.
Larger Balance Loans
The following table provides a summary of commercial loans by loan size and loan class as of March 31, 2026:

Table 41
Commercial Loans by Size and Class

dollars in millions Less Than $10 Million $10 Million to $30 Million Greater Than $30 Million Total Commercial Loans
Commercial and industrial $ 16,182  $ 11,850  $ 17,721  $ 45,753 
Capital call lines 1,311  3,344  27,619  32,274 
Owner occupied commercial mortgage 14,629  2,304  569  17,502 
Investor dependent 1,612  748  354  2,714 
Commercial real estate 8,370  6,604  8,733  23,707 
Total $ 42,104  $ 24,850  $ 54,996  $ 121,950 

Most of our loans greater than $30 million at March 31, 2026 are capital call lines which are described above in “Risk Management—Credit Risk—Concentration—Loans to non-depository financial institutions (“NDFIs”).”
Geographic Concentrations
The following table summarizes geographic concentrations based on the location of the real estate collateral for owner occupied commercial mortgage and commercial real estate loans, and based on the obligor address for all other commercial loans.

Table 42
Commercial Loans and Leases - Geography

dollars in millions March 31, 2026 December 31, 2025
State
California $ 25,324  20.8  % $ 26,056  21.6  %
New York 12,129  9.9  12,193  10.1 
North Carolina 11,258  9.2  11,005  9.1 
Texas 9,570  7.9  8,811  7.3 
Massachusetts 7,484  6.1  7,325  6.1 
Florida 6,259  5.1  6,175  5.1 
All other states 46,900  38.5  46,093  38.2 
Total U.S. $ 118,924  97.5  % $ 117,658  97.5  %
Total international 3,026  2.5  3,076  2.5 
Total $ 121,950  100.0  % $ 120,734  100.0  %

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

Table 43
Consumer Loans - Geography

dollars in millions March 31, 2026 December 31, 2025
State
California $ 7,950  29.7  % $ 8,118  29.8  %
North Carolina 6,695  25.0  6,736  24.8 
South Carolina 3,471  13.0  3,502  12.9 
Massachusetts 1,486  5.6  1,597  5.9 
Other states 7,140  26.7  7,243  26.6 
Total $ 26,742  100.0  % $ 27,196  100.0  %

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Market Risk

Market risk is the risk arising from changes in interest rates, foreign exchange, fixed income, commodity, or equity prices which can result in financial loss, or adverse impact to earnings and capital.

Interest rate risk management
BancShares is exposed to the risk that changes in market conditions may affect interest rates and negatively impact earnings. The risk arises from the nature of BancShares’ business activities, the composition of BancShares’ balance sheet, and changes in the level or shape of the yield curve. BancShares manages this inherent risk strategically based on prescribed guidelines and approved limits.

Interest rate risk can arise from many of BancShares’ business activities, such as lending, leasing, investing, deposit taking, derivatives, and funding activities. We evaluate and monitor interest rate risk primarily through two metrics.
• Net Interest Income Sensitivity (“NII Sensitivity”) measures the net impact of hypothetical changes in interest rates on forecasted NII; and
• Economic Value of Equity (“EVE”) Sensitivity (“EVE Sensitivity”) measures the net impact of these hypothetical changes on the value of equity by assessing the economic value of assets, liabilities and off-balance sheet instruments.

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

Our exposure to NII Sensitivity is guided by the Risk Appetite Policy and Statement and a range of risk metrics, and BancShares may utilize tools across the balance sheet to adjust its interest rate risk exposures, including through business line actions and actions within the investment, funding and derivative portfolios.

The composition of our interest rate sensitive assets and liabilities generally results in a net asset-sensitive position for NII Sensitivity, whereby our assets will reprice faster than our liabilities. A component of our interest rate risk management strategy is the use of derivative instruments to mitigate fluctuations in earnings caused by changes in market interest rates. Interest rate swaps are the primary type of derivative instrument that we use as part of our interest rate risk management strategy. These derivatives hedge interest income variability of floating rate loans indexed to secured overnight financing rate (“SOFR”), as well as fair value changes of fixed rate long-term debt. Refer to Note 11—Derivative Financial Instruments for further information on our derivative portfolio.
Our funding sources consist primarily of deposits, and we also support our funding needs through wholesale funding sources (including unsecured and secured borrowings).

The deposit rates we offer are influenced by market conditions and competitive factors. Market rates are the key factors of deposit costs, and we continue to optimize deposit costs by improving our deposit mix. Changes in interest rates, expected funding needs, as well as actions by competitors, can affect our deposit taking activities and deposit pricing. We believe our targeted non-maturity deposit customer retention is strong and we remain focused on optimizing our mix of deposits. We regularly assess the effect of deposit rate changes on our balances and seek to achieve optimal alignment between assets and liabilities.

The following table summarizes the results of 12-month NII Sensitivity simulations produced by our asset/liability management system. These simulations assume static balance sheet replacement with like products and implied forward market rates, and also incorporate additional internal models and assumptions, which we may update periodically, including rate dependent prepayment for certain loans and securities and repricing of interest-bearing non-maturity deposits. The below simulations assume an immediate 100 and 200 bps parallel increase and decrease from current interest rates.

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Table 44
NII Sensitivity Simulation Analysis

Estimated (Decrease) Increase in NII
Change in interest rate (bps) March 31, 2026 December 31, 2025
-200 (12.1)  % (11.3)  %
-100 (6.4) (5.8)
+100 6.7  6.5 
+200 14.0  13.6 

NII Sensitivity metrics at March 31, 2026, compared to December 31, 2025, were primarily affected by deposit growth, resulting in a higher cash position and compositional changes, partially offset by impacts from increased hedges.

As of March 31, 2026, 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. 65.6% 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 35%-40% over the twelve-month forecast horizon, including 50%-55% for interest-bearing non-maturity deposits. Deposit beta is the portion of a change in the federal funds rate that is passed on to the deposit rate. Actual deposit betas may be different than modeled, depending on various factors, including liquidity requirements, deposit mix and competitive pressures. Impacts to NII Sensitivity may change due to actual results differing from modeled expectations.

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

The below simulations assume an immediate 100 and 200 bps parallel increase and decrease from current interest rates and the estimated impact on our EVE profile based on our current modeling approach:

Table 45
EVE Modeling Analysis

Estimated Increase (Decrease) in EVE
Change in interest rate (bps) March 31, 2026 December 31, 2025
-200 7.2   % 6.7   %
-100 4.4  4.3 
+100 (4.3) (4.2)
+200 (7.8) (8.2)

In addition to the above reported sensitivities, a wide variety of potential interest rate scenarios are simulated within our asset/liability management system. Scenarios that impact balance sheet composition or the sensitivity to key assumptions are also evaluated.

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

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

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

Table 46
Loan Maturity Distribution

dollars in millions At March 31 2026, Maturing
Within
One Year One to Five
Years Five to 15
Years After 15 Years Total
Commercial
Commercial and industrial $ 12,831  $ 27,390  $ 4,749  $ 783  $ 45,753 
Capital call lines 31,762  512  —  —  32,274 
Owner occupied commercial mortgage 2,115  9,294  5,812  281  17,502 
Investor dependent 1,217  1,497  —  —  2,714 
Commercial real estate 5,999  13,856  2,660  1,192  23,707 
Total commercial 53,924  52,549  13,221  2,256  121,950 
Consumer
Residential mortgage 825  2,798  7,774  10,301  21,698 
Revolving mortgage 50  183  1,117  1,513  2,863 
Consumer auto 335  900  97  —  1,332 
Consumer other 199  539  106  5  849 
Total consumer 1,409  4,420  9,094  11,819  26,742 
Total loans and leases $ 55,333  $ 56,969  $ 22,315  $ 14,075  $ 148,692 

As noted above, 65.6% 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 March 31, 2026:

Table 47
Fixed and Variable Interest Rate Loans

dollars in millions Loans Maturing One Year or After with
Fixed Interest Rates Variable Interest Rates
Commercial
Commercial and industrial $ 9,945  $ 22,977 
Capital call lines —  512 
Owner occupied commercial mortgage 13,724  1,663 
Investor dependent 5  1,492 
Commercial real estate 7,897  9,811 
Total commercial 31,571  36,455 
Consumer
Residential mortgage 8,262  12,611 
Revolving mortgage 22  2,791 
Consumer auto 997  — 
Consumer other 281  369 
Total consumer 9,562  15,771 
Total loans and leases $ 41,133  $ 52,226 

Liquidity Risk

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

Our liquidity risk management and monitoring process is designed to ensure the availability of adequate cash and collateral resources and funding capacity to meet our obligations. Our overall liquidity management strategy is intended to ensure appropriate liquidity to meet expected and contingent funding needs under both normal and stressed environments. Consistent with this strategy, we maintain sufficient amounts of available cash and HQLS. Additional sources of liquidity include committed credit facilities, repurchase agreements, brokered certificates of deposit issuances, unsecured debt issuances, and cash collections generated by portfolio asset sales to third parties.
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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 March 31, 2026 we had $60.72 billion of high-quality liquid assets (25.7% of total assets) and $30.29 billion of contingent liquidity sources available. Some of the more significant changes from December 31, 2025 included higher available cash and HQLS due to balance sheet changes discussed above in “Executive Overview—Financial Performance Summary—Balance Sheet Highlights.”

Table 48
Liquidity

dollars in millions March 31, 2026 December 31, 2025
Available cash
$ 22,142  $ 19,111 
High-quality liquid securities (1)
38,580  36,895 
High-quality liquid assets $ 60,722  $ 56,006 

Current Capacity (2) of Credit Facilities:

FHLB facility (3)
$ 17,349  $ 17,775 
FRB facility 12,944  12,962 

Total contingent sources $ 30,293  $ 30,737 
Total liquid assets and contingent sources $ 91,015  $ 86,743 
Total uninsured deposits $ 65,439  $ 61,809 
Coverage ratio of total liquid assets and contingent sources to uninsured deposits 139  % 140  %

(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 March 31, 2026 and December 31, 2025.
(3)     Refer to Table 49 for additional details.

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 March 31, 2026 were $170.84 billion, an increase of $9.26 billion or 6% from $161.58 billion at December 31, 2025.

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 March 31, 2026 were $33.96 billion, a decrease of $2.05 billion or 6% from $36.01 billion at December 31, 2025. Refer to details of debt prepayments and issuance in the “Executive Overview—Recent Events” section of this MD&A. We continually monitor our capital needs and market conditions in an effort to diversify our borrowing base and capital mix when appropriate.

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

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Table 49
FHLB Balances

dollars in millions March 31, 2026 December 31, 2025

Total borrowing capacity $ 18,799  $ 19,225 
Less:
Advances —  — 
Letters of credit (1)
1,450  1,450 
Available capacity $ 17,349  $ 17,775 
Pledged Non-PCD loans $ 31,368  $ 31,713 

(1) Letters of credit were established with the FHLB to collateralize public funds.

FRB Capacity
Under borrowing arrangements with the FRB, FCB has access to $12.94 billion on a secured basis at March 31, 2026. Loans pledged are disclosed in Note 5—Loans and Leases. There were no outstanding borrowings with the FRB Discount Window at March 31, 2026 and December 31, 2025.

Contractual Obligations and Commitments
The following table includes significant contractual obligations and commitments as of March 31, 2026, representing required and potential cash outflows, including impacts from purchase accounting adjustments and deferred fees. Refer to Note 19—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 50
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 $ 13,042  $ 158  $ 43  $ —  $ 13,243 
Short-term borrowings 170  —  —  —  170 
Long-term borrowings (1) (2)
(35) 31,362  501  1,964  33,792 
Total contractual obligations $ 13,177  $ 31,520  $ 544  $ 1,964  $ 47,205 
Commitments:
Financing commitments
$ 26,688  $ 10,430  $ 8,203  $ 7,450  $ 52,771 
Letters of credit
2,136  481  169  84  2,870 
Deferred purchase agreements 1,584  —  —  —  1,584 
Purchase and funding commitments 145  —  —  —  145 
Affordable housing partnerships (1)
574  586  27  46  1,233 
Total commitments $ 31,127  $ 11,497  $ 8,399  $ 7,580  $ 58,603 

(1)     Long-term borrowings are presented net of purchase accounting adjustments of $62 million. On-balance sheet commitments for affordable housing partnerships are included in other liabilities and presented net of a purchase accounting adjustment of $11 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 50, we do not have any significant long-term debt obligations due until the Purchase Money Note matures. While scheduled principal payments are not required until maturity in March 2028, FCB may voluntarily prepay principal without a premium or penalty. As noted earlier in “Executive Overview—Recent Events,” FCB made prepayments of the Purchase Money Note in the first quarter of 2026 totaling $2.50 billion and previously made a prepayment of $2.49 billion in December 2025. We will continue to monitor the interest rate environment, FCB’s collateral position for the Purchase Money Note, and FCB’s liquidity position to determine the timing and magnitude of further voluntary prepayments. We expect monthly prepayments to be at least $500 million throughout 2026. 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), deposit growth including brokered deposits, loan sales or securitizations, FHLB advances, and issuance of perpetual preferred stock, unsecured debt or other borrowings. At the time of any further voluntary prepayment or maturity, the interest rates for the potential interest-bearing sources of prepayment could be higher than the 3.50% rate.

Refer to the respective “Deposits” and “Borrowings” discussions in the “Balance Sheet Analysis—Interest-bearing Liabilities” section of this MD&A for further details.
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CAPITAL

Capital requirements applicable to BancShares are discussed in the “Regulatory Considerations” section in Item 1. Business of the 2025 Form 10-K .

Common and Preferred Stock Dividends
During the current quarter, we paid quarterly dividends of $2.10 per share on the Class A common stock and Class B common stock. In April 2026, the Board declared a quarterly dividend on the Class A common stock and Class B common stock of $2.10 per common share. The dividends are payable on June 15, 2026 to stockholders of record as of May 29, 2026.

During the current quarter, we paid quarterly dividends on our Series A, Series B, Series C, and Series D Preferred Stock as disclosed in Note 13—Stockholders' Equity. In April 2026, the Board declared dividends on our Series A, Series B, Series C, Series D, and Series E Preferred Stock in accordance with their terms. The dividends are payable on June 15, 2026.

Capital Composition and Ratios
As discussed earlier in the “Executive Overview—Recent Events” section of this MD&A, during the current quarter, we repurchased 449,845 shares of our Class A common stock. Refer to Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds for additional information regarding repurchases of Class A common stock for current quarter monthly repurchase activity.

The following table summarizes the change in outstanding Class A common stock through March 31, 2026. Refer to Note 13—Stockholders' Equity for additional information.

Table 51
Changes in Shares of Class A Common Stock Outstanding

Three Months Ended March 31, 2026
Class A common stock shares outstanding at beginning of period 11,133,974 
Shares repurchased under authorized repurchase plan (449,845)

Class A common stock shares outstanding at end of period 10,684,129 

We also had 1,005,185 Class B common stock outstanding at March 31, 2026 and December 31, 2025.

We are committed to effectively managing our capital to protect our depositors, creditors and stockholders. We continually monitor the capital levels and ratios for BancShares and FCB to ensure they exceed the minimum requirements imposed by regulatory authorities and to ensure they are appropriate given growth projections, risk profile and potential changes in the regulatory or external environment. Failure to meet certain capital requirements may result in actions by regulatory agencies that could have a material impact on our operations or consolidated financial statements.

In accordance with GAAP, the unrealized gains and losses on certain assets and liabilities, net of deferred taxes, are included in AOCI within stockholders’ equity. These amounts are excluded from the calculation of our regulatory capital ratios under current regulatory guidelines. Refer to details of Basel III proposals in the “Executive Overview—Recent Events” section of this MD&A.

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Table 52
Analysis of Capital Adequacy

dollars in millions Basel III Requirements PCA Well Capitalized Thresholds March 31, 2026 December 31, 2025
Amount Ratio Amount Ratio
BancShares
Risk-based capital ratios
Total risk-based capital 10.50  % 10.00  % $ 24,799  13.51  % $ 24,945  13.71  %
Tier 1 risk-based capital 8.50  8.00  21,634  11.79  21,660  11.91 
Common equity Tier 1 7.00  6.50  19,869  10.83  20,285  11.15 
Tier 1 leverage ratio 4.00  5.00  21,634  9.30  21,660  9.29 

FCB
Risk-based capital ratios
Total risk-based capital 10.50  % 10.00  % $ 24,892  13.59  % $ 24,739  13.62  %
Tier 1 risk-based capital 8.50  8.00  23,064  12.59  22,796  12.55 
Common equity Tier 1 7.00  6.50  23,064  12.59  22,796  12.55 
Tier 1 leverage ratio 4.00  5.00  23,064  9.93  22,796  9.79 

A s of March 31, 2026, BancShares and FCB had total risk-based capital ratio conservation buffers of 5.51% and 5.59%, respectively, which are in excess of the Basel III conservation buffer of 2.50%. As of December 31, 2025, BancShares and FCB’s total risk-based capital ratio conservation buffers were 5.71% and 5.62%, respectively. The capital ratio conservation buffers represent the excess of the regulatory capital ratios as of March 31, 2026 and December 31, 2025 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 $6.58 billion while continuing to meet the requirements for well capitalized banks at March 31, 2026. Dividends declared by FCB and paid to the Parent Company amounted to $300 million for the quarter ended March 31, 2026. 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.

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CRITICAL ACCOUNTING ESTIMATES

The accounting and reporting policies of BancShares are described in Note 1—Significant Accounting Policies and Basis of Presentation in the 2025 Form 10-K.

The ALLL is considered a critical accounting estimate. For more information regarding the ALLL, refer to the “Risk Management—Credit Risk—ALLL Methodology” section of this MD&A and Note 6—Allowance for Loan and Lease Losses.

RECENT ACCOUNTING PRONOUNCEMENTS
The following Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board are not yet effective for BancShares. Refer to Note 1—Significant Accounting Policies and Basis of Presentation for descriptions of ASUs that were adopted as of January 1, 2026.

ASU Summary Effective Date and Expected Impact

ASU 2024-03—Income Statement—Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
Issued November 2024
This ASU enhances expense disclosures, primarily by requiring footnote disaggregation of specified expenses in a tabular format. This ASU does not change the requirements for the presentation of expenses on the consolidated statements of income. This ASU is effective for annual reporting periods
beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. This ASU may be applied prospectively or retrospectively.

We are currently evaluating the impact of this ASU on our notes to the consolidated financial statements. We do not plan to early adopt this ASU.

ASU 2025-06—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software Issued September 2025 This ASU amends certain aspects of the accounting for internal-use software. This ASU eliminated references to software development stages, which were previously determinants of whether internal-use software costs should be capitalized. This ASU also provided more specific criteria to assess when determining whether internal-use software costs should be capitalized. This ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. This ASU may be applied using either a prospective, retrospective, or modified transition approach.

We are currently evaluating the impact of this ASU on our consolidated financial statements. We did not early adopt this ASU on January 1, 2026, but are considering whether we may early adopt on January 1, 2027.

ASU 2025-09—Derivatives and Hedging (Topic 815)—Hedge Accounting Improvements Issued November 2025 This ASU clarified certain aspects of hedge accounting to better reflect the economics of risk management activities. For example, this ASU eliminated the requirement that a group of interest payments be based on the same index in order to be hedged as a group, and provided more flexibility for grouping transactions with similar risks for cash flow hedges. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted on any date on or after the issuance date of this ASU. Entities are required to apply this ASU on a prospective basis for all hedging relationships.

We are currently evaluating the impact of this ASU on our consolidated financial statements and considering whether we may early adopt during 2026.

NON-GAAP FINANCIAL MEASUREMENTS

BancShares provides certain non-GAAP information in reporting its financial results to give investors additional data to evaluate its operations. A non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance or financial position that may either exclude or include amounts, or is adjusted in some way to the effect of including or excluding amounts, as compared to the most directly comparable measure calculated and presented in accordance with GAAP financial statements. BancShares’ management believes that non-GAAP financial measures, when reviewed in conjunction with GAAP financial information, can provide transparency about, or an alternate means of assessing, its operating results and financial position to its investors, analysts and management. These non-GAAP measures should be considered in addition to, and not superior to or a substitute for, GAAP measures presented in BancShares’ consolidated financial statements and other publicly filed reports. In addition, our non-GAAP measures may be different from or inconsistent with non-GAAP financial measures used by other institutions.

Whenever we refer to a non-GAAP financial measure we will generally define and present the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation between the GAAP financial measure and the non-GAAP financial measure. We describe each of these measures below and explain why we believe the measure to be useful.

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

Commercial Bank segment net income, rental income on operating lease equipment, and adjusted rental income on operating lease equipment are utilized to measure profitability. Adjusted rental income on operating lease equipment is a non-GAAP measure calculated as rental income on operating lease equipment less depreciation on operating lease equipment, as well as maintenance and other operating lease expenses, if any. This measure is meaningful because it enables management to monitor the performance and profitability of operating leases after deducting direct expenses.

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

Table 53
Commercial Bank Segment

dollars in millions Three Months Ended
March 31, 2026 December 31, 2025 March 31, 2025
Rental income on operating leases (GAAP) $ 55  $ 55  $ 56 
Less: depreciation on operating lease equipment 43  44  44 

Adjusted rental income on operating lease equipment (non-GAAP) $ 12  $ 11  $ 12 

Rail segment net income, rental income on operating lease equipment and adjusted rental income on operating lease equipment are utilized to measure profitability. Adjusted rental income on operating lease equipment is calculated as rental income on operating lease equipment reduced by depreciation, maintenance and other operating lease expenses. This measure is meaningful because it enables management to monitor the performance and profitability of operating leases after deducting direct expenses. Due to the nature of the Rail segment portfolio, which is essentially all operating lease equipment, certain financial measures commonly used by banks, such as NII, are not as meaningful for the Rail segment. NII is not used because it includes the impact of debt costs funding our operating lease assets but excludes the associated adjusted rental income.

Table 54
Rail Segment

dollars in millions Three Months Ended
March 31, 2026 December 31, 2025 March 31, 2025
Rental income on operating leases (GAAP) $ 226  $ 226  $ 214 
Less: depreciation on operating lease equipment 58  58  54 
Less: maintenance and other operating lease expenses 65  64  58 
Adjusted rental income on operating lease equipment (non-GAAP) $ 103  $ 104  $ 102 

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NII, NIM, and Interest Income on Loans and Leases, Excluding PAA

NII and NIM, excluding PAA, and interest income on loans and leases, excluding loan PAA are meaningful metrics as they allow management to analyze NII, NIM and loan and lease interest income trends more directly related to the rates of the underlying interest-earning assets and interest-bearing liabilities. Loan PAA is primarily related to the loan discount in the SVBB Acquisition. Other PAA is primarily related to the discount on the Purchase Money Note and the premium on deposits assumed in the merger with CIT Group Inc.

The following table reconciles NII to NII, excluding PAA, NIM to NIM, excluding PAA, and interest income on loans and leases to interest income on loans and leases, excluding loan PAA:

Table 55
NII, NIM, and Interest Income on Loans and Leases, Excluding PAA

dollars in millions Three Months Ended
March 31, 2026 December 31, 2025 March 31, 2025
NII (GAAP) a $ 1,621  $ 1,722  $ 1,663 
Loan PAA b 48  59  84 
Other PAA c (9) (10) (9)
PAA d = (b+c) 39  49  75 
NII, excluding PAA (non-GAAP) e = (a-d) $ 1,582  $ 1,673  $ 1,588 
Annualized NII f = a annualized $ 6,575  $ 6,834  $ 6,744 
Annualized NII, excluding PAA (non-GAAP) g = e annualized 6,416  6,640  6,439 
Average interest-earning assets h $ 212,552  $ 213,294  $ 206,028 
NIM (GAAP) f/h 3.09  % 3.20  % 3.26  %
NIM, excluding PAA (non-GAAP) g/h 3.01  3.11  3.12 

Interest income on loans and leases (GAAP) $ 2,206  $ 2,290  $ 2,236 
Less: loan PAA b 48  59  84 
Interest income on loans and leases, excluding loan PAA (non-GAAP) $ 2,158  $ 2,231  $ 2,152 

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

BancShares’ 2025 SRP allows BancShares to repurchase shares of its Class A common stock through 2026. BancShares is not obligated under the 2025 SRP to repurchase any minimum or particular number of shares, and repurchases may be suspended or discontinued at any time (subject to the terms of any Rule 10b5-1 plan in effect) without prior notice. The authorization to repurchase Class A common stock pursuant to the 2025 SRP will be utilized at management’s discretion. The actual timing and amount of Class A common stock that may be repurchased under the plan will depend on a number of factors, including the terms of any Rule 10b5-1 plan then in effect, price, general business and market conditions, regulatory requirements, and alternative investment opportunities or capital needs.

Except to the extent required by applicable laws or regulations, BancShares disclaims any obligation to update forward-looking statements or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Additional factors which could affect the forward-looking statements may be included in BancShares’ other filings with the 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 11—Derivative Financial Instruments and Note 12—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 first quarter of 2026 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.

Information relating to legal proceedings is set forth in Note 19—Commitments and Contingencies of the Notes to Consolidated Financial Statements contained in Item 1. Financial Statements, and is incorporated herein by reference.

Item 1A. Risk Factors.

There have been no material changes in the risk factors during 2026 from those reported in our 2025 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 2025 Form 10-K , and Forward-Looking Statements of this Form 10-Q.

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 March 31, 2026. Subsequent to March 31, 2026, BancShares purchased an additional 102,340 shares of Class A common stock through April 30, 2026 under the 2025 SRP.

Table 57
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 January 1 - 31, 2026 139,328  $ 2,123.69  139,328  $ 2,515 
Repurchases from February 1 - 28, 2026 136,470  2,050.40  136,470  2,235 
Repurchases from March 1 - 31, 2026 174,047  1,863.20  174,047  1,911 
Total 449,845  $ 2,000.67  449,845  $ 1,911 

On July 25, 2025, BancShares announced that the Board authorized the 2025 SRP, which allows BancShares to repurchase shares of its Class A common stock in an aggregate amount up to $4.0 billion through December 31, 2026. Repurchases under the 2025 SRP commenced in September 2025 after the 2024 SRP was completed.

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

Item 5. Other Information.

(c) Director and Officer Trading Arrangements

During the first quarter of 2026, 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 Deposit Agreement, dated as of February 5, 2026, among the Registrant, Broadridge Corporate Issuer Solutions, LLC, as depositary, and the holders from time to time of the depositary receipts described therein (incorporated by reference to Exhibit 4.1 to the Registrant's Form 8-K filed February 5, 2026)

4.2 Form of Depositary Receipt relating to the Registrant's 6.625% Non-Cumulative Perpetual Preferred Stock, Series E (included as Exhibit A in Exhibit 4.1 hereto)

4.3 Instruments defining the rights of holders of long-term debt will be furnished to the SEC upon request.

10.1 Amended and Restated Long-Term Incentive Plan of Registrant’s subsidiary, First-Citizens Bank & Trust Company, effective January 1, 2026 (incorporated by reference to Exhibit 10.8 to the Registrant’s Form 10-K for the year ended December 31, 2025)

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: May 8, 2026 First Citizens BancShares, Inc.
(Registrant)

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

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