fcnca-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________

FORM 10-Q

____________________________________________________


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
			For the quarterly period ended March 31, 2025
			or
☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 001-16715

First Citizens BancShares, Inc.

(Exact name of Registrant as specified in its charter)


Delaware			56-1528994
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

4300 Six Forks Road	Raleigh	North Carolina	27609
(Address of principal executive offices)			(Zip code)

		(919)	716-7000
(Registrant’s telephone number, including area code)

____________________________________________________


Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, Par Value $1	FCNCA	Nasdaq Global Select Market
Depositary Shares, Each Representing a 1/40th Interest in a Share of 5.375% Non-Cumulative Perpetual Preferred Stock, Series A	FCNCP	Nasdaq Global Select Market
5.625% Non-Cumulative Perpetual Preferred Stock, Series C	FCNCO	Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934:
Class B Common Stock, Par Value $1

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and ‘emerging growth company’ in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Class A Common Stock—12,283,675 shares

Class B Common Stock—1,005,185 shares

(Number of shares outstanding, by class, as of May 2, 2025)


CONTENTS
		Page
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements	4
	Consolidated Balance Sheets (Unaudited)	4
	Consolidated Statements of Income (Unaudited)	5
	Consolidated Statements of Comprehensive Income (Unaudited)	6
	Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)	7
	Consolidated Statements of Cash Flows (Unaudited)	8
	Notes to Unaudited Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	55
Item 3.	Quantitative and Qualitative Disclosure s about Market Risk	103
Item 4.	Controls and Procedures	103

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	104
Item 1A.	Risk Factors	104
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	104
Item 5.	Other Information	105
Item 6.	Exhibits	105
Signatures		106

GLOSSARY OF ABBREVIATIONS AND ACRONYMS

The following is a list of select abbreviations and acronyms used throughout this document. You may find it helpful to refer back to this table.


Acronym	Definition	Acronym	Definition
ALLL	Allowance for Loan and Lease Losses	MD&A	Management’s Discussion and Analysis
AOCI	Accumulated Other Comprehensive Income	MSRs	Mortgage Servicing Rights
ASC	Accounting Standards Codification	NII	Net Interest Income
ASU	Accounting Standards Update	NII Sensitivity	Net Interest Income Sensitivity
BHC	Bank Holding Company	NIM	Net Interest Margin
bps	Basis point(s); 1 bp = 0.01%	NPR	Notice of Proposed Rulemaking
CRA	Community Reinvestment Act	OREO	Other Real Estate Owned
CRE	Commercial Real Estate	PAA	Purchase Accounting Accretion or Amortization
DPA	Deferred Purchase Agreement	PAM	Proportional Amortization Method
DTAs	Deferred Tax Assets	PCA	Prompt Corrective Action
ETR	Effective Income Tax Rate	PCD	Purchased Credit Deteriorated
EVE Sensitivity	Economic Value of Equity Sensitivity	PD	Probability of Obligor Default
FASB	Financial Accounting Standards Board	PPNR	Pre-provision net revenue
FCB	First-Citizens Bank & Trust Company	ROU	Right of Use
FDIC	Federal Deposit Insurance Corporation	RWA	Risk-weighted assets
Federal Reserve	Board of Governors of the Federal Reserve System	SBA	Small Business Administration
FHLB	Federal Home Loan Bank	SEC	Securities and Exchange Commission
FOMC	Federal Open Market Committee	SOFR	Secured Overnight Financing Rate
FRB	Federal Reserve Bank	SRP	Share Repurchase Program
GAAP	United States Generally Accepted Accounting Principles	SVB	Silicon Valley Bank
HQLS	High-Quality Liquid Securities	SVBB	Silicon Valley Bridge Bank, N.A.
ISDA	International Swaps and Derivatives Association	TMT	Technology Media and Telecommunications
LGD	Loss Given Default	UPB	Unpaid Principal Balance
LOCOM	Lower of the Cost or Fair Value	VIE	Variable Interest Entity

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Balance Sheets (Unaudited)


dollars in millions, except share data	March 31, 2025		December 31, 2024
Assets
Cash and due from banks	$	812	$	814
Interest-earning deposits at banks	24,692		21,364
Securities purchased under agreements to resell	345		158
Investment in marketable equity securities (cost of $78 at March 31, 2025 and $79 at December 31, 2024)	95		101
Investment securities available for sale (cost of $34,340 at March 31, 2025 and $34,512 at December 31, 2024)	33,900		33,750
Investment securities held to maturity (fair value of $8,973 at March 31, 2025 and $8,702 at December 31, 2024)	10,324		10,239
Assets held for sale	185		85
Loans and leases	141,358		140,221
Allowance for loan and lease losses	(1,680)		(1,676)
Loans and leases, net of allowance for loan and lease losses	139,678		138,545
Operating lease equipment, net	9,371		9,323
Premises and equipment, net	2,044		2,006
Goodwill	346		346
Other intangible assets, net	234		249
Other assets	6,796		6,740
Total assets	$	228,822	$	223,720
Liabilities
Deposits:
Noninterest-bearing	$	40,767	$	38,633
Interest-bearing	118,558		116,596
Total deposits	159,325		155,229
Credit balances of factoring clients	1,145		1,016
Borrowings:



Short-term borrowings	450		367




Long-term borrowings	37,956		36,684
Total borrowings	38,406		37,051
Other liabilities	7,651		8,196
Total liabilities	206,527		201,492
Stockholders’ equity
Preferred stock - $0.01 par value (20,000,000 shares authorized at March 31, 2025 and December 31, 2024)	881		881
Common stock:
Class A - $1 par value (32,000,000 shares authorized at March 31, 2025 and December 31, 2024; 12,409,753 and 12,712,436 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively)	12		13
Class B - $1 par value (2,000,000 shares authorized and 1,005,185 shares issued and outstanding at March 31, 2025 and December 31, 2024)	1		1
Additional paid in capital	1,798		2,417
Retained earnings	19,802		19,361
Accumulated other comprehensive loss	(199)		(445)
Total stockholders’ equity	22,295		22,228
Total liabilities and stockholders’ equity	$	228,822	$	223,720

See accompanying Notes to the Unaudited Consolidated Financial Statements.

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Income (Unaudited)


	Three Months Ended March 31,
dollars in millions, except share and per share data	2025		2024
Interest income
Interest and fees on loans	$	2,236	$	2,354
Interest on investment securities	414		282
Interest on deposits at banks	245		448
Total interest income	2,895		3,084
Interest expense
Deposits	893		928
Borrowings	339		339
Total interest expense	1,232		1,267
Net interest income	1,663		1,817
Provision for credit losses	154		64
Net interest income after provision for credit losses	1,509		1,753
Noninterest income
Rental income on operating lease equipment	270		255
Lending-related fees	66		59
Deposit fees and service charges	58		58
Client investment fees	53		50
Wealth management services	56		51
International fees	32		28
Factoring commissions	17		17
Cardholder services, net	41		40
Merchant services, net	14		12
Insurance commissions	14		15

Fair value adjustment on marketable equity securities, net	(5)		(4)
Gain on sale of leasing equipment, net	5		10

Loss on extinguishment of debt	—		(2)
Other noninterest income	14		38
Total noninterest income	635		627
Noninterest expense
Depreciation on operating lease equipment	98		96
Maintenance and other operating lease expenses	58		45
Personnel cost	818		744
Net occupancy expense	58		62
Equipment expense	136		114
Professional fees	25		25
Third-party processing fees	63		60
FDIC insurance expense	38		41
Marketing expense	32		14
Acquisition-related expenses	42		58
Intangible asset amortization	15		17
Other noninterest expense	110		100
Total noninterest expense	1,493		1,376
Income before income taxes	651		1,004
Income tax expense	168		273
Net income	$	483	$	731
Preferred stock dividends	15		15
Net income available to common stockholders	$	468	$	716
Earnings per common share
Basic	$	34.47	$	49.27
Diluted	$	34.47	$	49.26
Weighted average common shares outstanding
Basic	13,575,231		14,533,302
Diluted	13,575,231		14,536,442

See accompanying Notes to the Unaudited Consolidated Financial Statements.

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended March 31,
dollars in millions	2025		2024
Net income	$	483	$	731
Other comprehensive income (loss), net of tax
Net unrealized gain (loss) on securities available for sale	239		(91)



Net unrealized gain on cash flow hedge derivatives	7		—
Other comprehensive income (loss), net of tax	$	246	$	(91)
Total comprehensive income	$	729	$	640

See accompanying Notes to the Unaudited Consolidated Financial Statements.

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)



dollars in millions, except per share data	Preferred Stock		Class A Common Stock		Class B Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
Balance at December 31, 2024	$	881	$	13	$	1	$	2,417	$	19,361	$	(445)	$	22,228
Net income	—		—		—		—		483		—		483
Other comprehensive income, net of tax	—		—		—		—		—		246		246







Repurchased 302,683 shares of Class A common stock	—		(1)		—		(619)		—		—		(620)
Cash dividends declared ($1.95 per common share):
Class A common stock	—		—		—		—		(25)		—		(25)
Class B common stock	—		—		—		—		(2)		—		(2)
Preferred stock dividends declared:
Series A	—		—		—		—		(5)		—		(5)
Series B	—		—		—		—		(7)		—		(7)
Series C	—		—		—		—		(3)		—		(3)
Balance at March 31, 2025	$	881	$	12	$	1	$	1,798	$	19,802	$	(199)	$	22,295

Balance at December 31, 2023	$	881	$	14	$	1	$	4,108	$	16,742	$	(491)	$	21,255
Net income	—		—		—		—		731		—		731
Other comprehensive loss, net of tax	—		—		—		—		—		(91)		(91)






Stock based compensation	—		—		—		(9)		—		—		(9)

Cash dividends declared ($1.64 per common share):
Class A common stock	—		—		—		—		(22)		—		(22)
Class B common stock	—		—		—		—		(1)		—		(1)
Preferred stock dividends declared:
Series A	—		—		—		—		(4)		—		(4)
Series B	—		—		—		—		(8)		—		(8)
Series C	—		—		—		—		(3)		—		(3)
Balance at March 31, 2024	$	881	$	14	$	1	$	4,099	$	17,435	$	(582)	$	21,848

See accompanying Notes to the Unaudited Consolidated Financial Statements.

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)


	Three Months Ended March 31,
dollars in millions	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	483	$	731
Adjustments to reconcile net income to cash provided by operating activities:
Provision for credit losses	154		64
Deferred tax (benefit) expense	(40)		1
Depreciation, amortization, and accretion, net	93		(12)


Fair value adjustment on marketable equity securities, net	5		4
Gain on sale of loans, net	(2)		(3)
Gain on sale of operating lease equipment, net	(5)		(10)
Gain on sale of premises and equipment, net	(1)		—
Loss (gain) on other real estate owned, net	8		(3)


Loss on extinguishment of debt	—		2
Origination of loans held for sale	(297)		(209)
Proceeds from sale of loans held for sale	293		244
Impairment of premises and equipment	4		—
Net change in other assets	24		57
Net change in other liabilities	(610)		(409)
Other operating activities	(11)		4
Net cash provided by operating activities	98		461
CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) decrease in interest-earning deposits at banks	(3,328)		2,817


Purchases of investment securities available for sale	(1,855)		(6,296)
Proceeds from maturities of investment securities available for sale	894		1,221
Proceeds from sales of investment securities available for sale	1,196		250
Purchases of investment securities held to maturity	(217)		(174)
Proceeds from maturities of investment securities held to maturity	139		109
Net (increase) decrease in securities purchased under agreements to resell	(187)		79
Net increase in loans	(1,368)		(2,146)
Proceeds from sales of loans	41		74
Net increase in credit balances of factoring clients	129		63
Purchases of operating lease equipment	(170)		(191)
Proceeds from sales of operating lease equipment	63		66
Purchases of premises and equipment	(103)		(94)


Proceeds from sales of other real estate owned	3		7


Other investing activities	(114)		(76)
Net cash used in investing activities	(4,877)		(4,291)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in time deposits	(1,257)		585
Net increase in demand and other interest-bearing deposits	5,370		3,204
Net increase (decrease) in securities sold under agreements to repurchase	83		(90)


Repayment of long-term borrowings	(1)		(31)
Proceeds from issuance of long-term borrowings	1,242		—

Repurchase of Class A common stock	(618)		—
Cash dividends paid	(42)		(39)
Other financing activities	—		(9)
Net cash provided by financing activities	4,777		3,620

Change in cash and due from banks	(2)		(210)
Cash and due from banks at beginning of period	814		908
Cash and due from banks at end of period	$	812	$	698


	Three Months Ended March 31,
dollars in millions	2025		2024
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest	$	1,224	$	1,294
Income taxes	40		53
Significant non-cash investing and financing activities:
Transfers of loans to other real estate	52		—




Transfer of assets from held for investment to held for sale	139		131


Commitments extended during the period on affordable housing investment credits	108		120

See accompanying Notes to the Unaudited Consolidated Financial Statements.

First Citizens BancShares, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Nature of Operations

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

Business Combinations

BancShares accounts for business combinations using the acquisition method of accounting. Under this method, acquired assets and assumed liabilities are included with the acquirer’s accounts at their estimated fair value as of the date of acquisition, with any excess of purchase price over the fair values of the net assets acquired and any finite-lived intangible assets established in connection with the business combination recognized as goodwill. To the extent the fair value of identifiable net assets acquired exceeds the purchase price, a gain on acquisition is recognized. Acquisition-related costs are recognized as period expenses as incurred.

Refer to Note 2—Business Combinations for additional information.

BASIS OF PRESENTATION

Principles of Consolidation and Basis of Presentation

These consolidated financial statements and notes thereto are presented in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flow activity required in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the consolidated financial position and consolidated results of operations have been made. The unaudited interim consolidated financial statements included in this Quarterly Report on Form 10-Q (this “Form 10-Q”) should be read in conjunction with the Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”). Interim results are not necessarily indicative of results for a full year.

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

Refer to Note 8—Variable Interest Entities for additional information regarding VIEs.

Reclassifications

Financial Statements

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

Changes to the Composition of Reportable Segments

We updated our segment reporting during the first quarter of 2025 (the “Segment Reporting Updates”) as we transferred certain components from the SVB Commercial and General Bank segments to the Commercial Bank segment and modified our segment expense allocation methodology. The Segment Reporting Updates did not result in the addition or removal of any of our existing segments at December 31, 2024, and the global fund banking and investor dependent loan portfolios, as well as a substantial portion of the innovation commercial and industrial (“innovation C&I”) and cash flow dependent loan portfolios, remain in the SVB Commercial segment.

Segment disclosures for 2024 periods included in this Form 10-Q were recast to conform with the above-described Segment Reporting Updates. Refer to Note 17—Segment Information for additional information.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions impact the amounts reported in the consolidated financial statements and accompanying notes and the disclosures provided, and actual results could differ from those estimates. The significant estimate related to the determination of the allowance for loan and lease losses (“ALLL”) is considered a critical accounting estimate.

SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies are described in the 2024 Form 10-K. There were no material changes to these policies during the three months ended March 31, 2025.

NOTE 2 — BUSINESS COMBINATIONS

Silicon Valley Bridge Bank Acquisition

On March 27, 2023 (the “SVBB Acquisition Date”), FCB acquired substantially all loans and certain other assets and assumed all customer deposits and certain other liabilities of Silicon Valley Bridge Bank, N.A. (“SVBB”) from the Federal Deposit Insurance Corporation (the “FDIC”) pursuant to the terms of a purchase and assumption agreement (the “SVBB Purchase Agreement”) by and among FCB, the FDIC, and the FDIC, as receiver of SVBB (the “SVBB Acquisition”).

BancShares determined that the SVBB Acquisition constituted a business combination as defined by Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed were initially presented at their estimated fair values based on valuations as of March 27, 2023. The determination of estimated fair values required management to make certain estimates about discount rates, future expected cash flows, market conditions at the time of the SVBB Acquisition and other future events that were highly subjective in nature. Management finalized its fair value estimates for the acquired assets and assumed liabilities within the allowable one-year period following the SVBB Acquisition Date (“Measurement Period Adjustments”). BancShares recorded Measurement Period Adjustments during 2023 and none during the year ended December 31, 2024.

Pursuant to the terms of the SVBB Purchase Agreement, FCB acquired assets with a total fair value of approximately $107.54 billion as of the SVBB Acquisition Date, primarily including $68.47 billion of loans, net of the initial ALLL for purchased credit deteriorated (“PCD”) loans, and $35.31 billion of cash and interest-earning deposits at banks. FCB also assumed liabilities with a total fair value of approximately $61.42 billion, primarily including $56.01 billion of customer deposits. The deposits were acquired without a premium and the assets were acquired at a discount of approximately $16.45 billion pursuant to the terms of the SVBB Purchase Agreement. Further details regarding the fair values of the acquired assets and assumed liabilities are provided in the “Fair Value Purchase Price Allocation” table below.

In connection with the SVBB Purchase Agreement, FCB also entered into a commercial shared loss agreement with the FDIC (the “Shared-Loss Agreement”). The Shared-Loss Agreement covered an estimated $60 billion of commercial loans (collectively, the “Covered Assets”) at the time of acquisition. The FDIC agreed to reimburse FCB for 0% of losses of up to $5 billion with respect to Covered Assets and 50% of losses in excess of $5 billion with respect to Covered Assets (“FDIC Loss Sharing”) and FCB agreed to reimburse the FDIC for 50% of recoveries related to such Covered Assets (“FCB reimbursement”). The Shared-Loss Agreement provided for FDIC Loss Sharing for five years and FCB reimbursement for eight years. The Shared-Loss Agreement extended to loans funded within one year of the SVBB Acquisition Date that were unfunded commitments to loans at the SVBB Acquisition Date. On April 7, 2025, FCB and the FDIC entered into an agreement (the “Shared-Loss Termination Agreement”) to terminate the Shared-Loss Agreement. As a result of entering into the Shared-Loss Termination Agreement, all rights and obligations of the parties under the Shared-Loss Agreement terminated as of the date of the Shared-Loss Termination Agreement, including FCB’s reporting covenants and obligations related to FDIC Loss Sharing and FCB reimbursement. There was no impact to our consolidated balance sheets or statements of income resulting from the Shared-Loss Termination Agreement because there was no loss indemnification asset or true-up liability associated with the Shared-Loss Agreement, primarily based on evaluation of historical loss experience and the credit quality of the Covered Assets.

In connection with the SVBB Acquisition, FCB issued a five-year $35 billion note payable to the FDIC (the “Original Purchase Money Note”), and entered into binding terms and conditions for an up to $70 billion line of credit provided by the FDIC for related risks and liquidity purposes (the “Initial Liquidity Commitment”). At such time, FCB and the FDIC agreed to negotiate additional terms and documents augmenting and superseding the Original Purchase Money Note and Initial Liquidity Commitment, and on November 20, 2023, FCB and the FDIC entered into new financing agreements for those purposes. On November 20, 2023, the Original Purchase Money Note was amended and restated, dated as of March 27, 2023 and maturing March 27, 2028 (the “Purchase Money Note”), adjusting the principal amount to approximately $36.07 billion. FCB and the FDIC, as lender and as collateral agent, also entered into an Advance Facility Agreement, dated as of March 27, 2023, and effective as of November 20, 2023 (the “Advance Facility Agreement”), which provided 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 on the facility at the end of the draw period on March 27, 2025.

Purchase Price Consideration for the SVBB Acquisition

As consideration for the SVBB Acquisition, FCB issued the Purchase Money Note with a principal amount of $36.07 billion (fair value of $35.81 billion). FCB pledged specified assets as collateral security for the Purchase Money Note and the Advance Facility Agreement, including loans purchased from the FDIC as receiver to SVBB, the related loan documents and collections, accounts established for collections and disbursements, any items credited thereto, such additional collateral (if any) as the parties may agree to in the future, and proceeds thereof. The interest rate on the Purchase Money Note accrues at a rate of 3.50% per annum. There are no scheduled principal payments under the Purchase Money Note. FCB may voluntarily prepay principal under the Purchase Money Note without premium or penalty, twice per month. The principal amount of the Purchase Money Note is based on the carrying value of net assets acquired less the asset discount of $16.45 billion pursuant to the terms of the SVBB Purchase Agreement.

In addition, as part of the consideration for the SVBB Acquisition, BancShares issued a Cash Settled Value Appreciation Instrument to the FDIC (the “Value Appreciation Instrument”) in which FCB agreed to make a cash payment to the FDIC equal to the product of (i) 5 million and (ii) the excess amount by which the average volume weighted price of one share of Class A common stock, over the two Nasdaq trading days immediately prior to the date on which the Value Appreciation Instrument is exercised exceeds $582.55; provided that the settlement amount does not exceed $500 million. The FDIC exercised its right under the Value Appreciation Instrument on March 28, 2023 and a $500 million payment was made on April 4, 2023.

The following table provides the final purchase price allocation, including Measurement Period Adjustments, to the identifiable assets acquired and liabilities assumed at their estimated fair values as of the SVBB Acquisition Date.

Fair Value Purchase Price Allocation


dollars in millions	Fair Value Purchase Price Allocation as of March 27, 2023
Purchase price consideration
Purchase Money Note (1)	$	35,808
Value Appreciation Instrument	500
Purchase price consideration	$	36,308
Assets
Cash and due from banks	$	1,310
Interest-earning deposits at banks	34,001
Investment securities available for sale	385
Loans and leases, net of the initial PCD ALLL	68,468
Affordable housing tax credit and other unconsolidated investments	1,273
Premises and equipment	308
Core deposit intangibles	230
Other assets	1,564
Total assets acquired	$	107,539
Liabilities
Deposits	$	56,014
Borrowings	10
Deferred tax liabilities	3,364
Other liabilities	2,035
Total liabilities assumed	$	61,423
Fair value of net assets acquired	46,116
Gain on acquisition, after income taxes (2)	$	9,808
Gain on acquisition, before income taxes (2)	$	13,172

(1) The principal amount of the Purchase Money Note is the carrying value of net assets acquired of approximately $52.52 billion less the asset discount of $16.45 billion pursuant to the SVBB Purchase Agreement. The $35.81 billion above is net of a fair value discount of approximately $264 million.

(2) The difference between the gain on acquisition before and after taxes reflects the deferred tax liabilities of $3.36 billion recorded in the SVBB Acquisition.

The gain on acquisition of $9.81 billion, net of income taxes of $3.36 billion, was recorded in noninterest income during the year ended December 31, 2023, and represents the excess of the fair value of net assets acquired over the purchase price.

Purchase Money Note

The fair value of the Purchase Money Note was estimated based on the income approach, which includes: (i) projecting cash flows over a certain discrete projection period and (ii) discounting those projected cash flows to present value at a rate of return that considers the relative risk of the cash flows and the time value of money.

Refer to the 2024 Form 10-K for descriptions of methods used to determine the estimated fair values and significant assets acquired and liabilities assumed, as presented above.

NOTE 3 — INVESTMENT SECURITIES

The following tables include the amortized cost and fair value of investment securities:

Amortized Cost and Fair Value - Investment Securities


dollars in millions	March 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investment securities available for sale
U.S. Treasury	$	13,105	$	55	$	(10)	$	13,150
Government agency	71		—		(2)		69
Residential mortgage-backed securities	16,905		143		(443)		16,605
Commercial mortgage-backed securities	3,759		21		(186)		3,594
Corporate bonds	483		1		(19)		465
Municipal bonds	17		—		—		17

Total investment securities available for sale	$	34,340	$	220	$	(660)	$	33,900
Investment in marketable equity securities	$	78	$	21	$	(4)	$	95
Investment securities held to maturity
U.S. Treasury	$	484	$	—	$	(25)	$	459
Government agency	1,491		—		(91)		1,400
Residential mortgage-backed securities	4,668		17		(595)		4,090
Commercial mortgage-backed securities	3,378		—		(630)		2,748

Supranational securities	301		—		(27)		274
Other	2		—		—		2
Total investment securities held to maturity	$	10,324	$	17	$	(1,368)	$	8,973
Total investment securities	$	44,742	$	258	$	(2,032)	$	42,968

	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investment securities available for sale
U.S. Treasury	$	13,897	$	33	$	(27)	$	13,903
Government agency	79		—		(2)		77
Residential mortgage-backed securities	16,161		41		(582)		15,620
Commercial mortgage-backed securities	3,869		7		(210)		3,666
Corporate bonds	489		—		(22)		467
Municipal bonds	17		—		—		17
Total investment securities available for sale	$	34,512	$	81	$	(843)	$	33,750
Investment in marketable equity securities	$	79	$	27	$	(5)	$	101
Investment securities held to maturity
U.S. Treasury	$	483	$	—	$	(31)	$	452
Government agency	1,489		—		(115)		1,374
Residential mortgage-backed securities	4,558		2		(682)		3,878
Commercial mortgage-backed securities	3,407		—		(678)		2,729

Supranational securities	300		—		(33)		267
Other	2		—		—		2
Total investment securities held to maturity	$	10,239	$	2	$	(1,539)	$	8,702
Total investment securities	$	44,830	$	110	$	(2,387)	$	42,553

U.S. Treasury investments include Treasury bills and Notes issued by the U.S. Treasury. Investments in government agency securities represent securities issued by the Small Business Administration (“SBA”), Federal Home Loan Bank (“FHLB”) and other U.S. agencies. Investments in residential and commercial mortgage-backed securities represent securities issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. Investments in corporate bonds represent positions in debt securities of other financial institutions. Municipal bonds are revenue bonds. Investments in marketable equity securities represent positions in common stock of publicly traded financial institutions. Investments in supranational securities represent securities issued by the Supranational Entities & Multilateral Development Banks. Other held to maturity investments include certificates of deposit with other financial institutions.

BancShares initially held approximately 354,000 shares of Visa, Inc. (“Visa”) Class B common stock (“Visa Class B common stock”). Effective January 24, 2024, all outstanding shares of Visa Class B common stock were redenominated as Visa Class B-1 common stock (“Visa Class B-1 common stock”) pursuant to Visa’s eighth amended and restated certificate of incorporation. BancShares currently holds approximately 354,000 shares of Visa Class B-1 common stock. Until the resolution of certain litigation, at which time the Visa Class B-1 common stock will convert to publicly traded Visa Class A common stock, or the potential exchange of Visa Class B-1 common stock for other marketable classes of Visa common stock, these shares are only transferable to other stockholders of Visa Class B-1 common stock or certain new denominations of Visa’s former Class B common stock. As a result, there is limited transfer activity in private transactions between buyers and sellers. Given this limited trading activity and the continuing uncertainty regarding the likelihood, ultimate timing and eventual exchange of Visa Class B-1 common stock for shares of Visa Class A common stock or other marketable classes of Visa common stock, these shares are not considered to have a readily determinable fair value and have no carrying value. BancShares continues to monitor the trading activity in Visa Class B-1 common stock, the status of the resolution of certain litigation matters at Visa, and other potential exchange alternatives that would trigger the conversion of the Visa Class B-1 common stock into Visa Class A common stock or other marketable classes of Visa common stock.

Accrued interest receivable for available for sale and held to maturity debt securities was excluded from the estimate for credit losses. At March 31, 2025, accrued interest receivable for available for sale and held to maturity debt securities was $178 million and $19 million, respectively. At December 31, 2024, accrued interest receivable for available for sale and held to maturity debt securities was $177 million and $20 million, respectively. During the three months ended March 31, 2025 and 2024, there was no accrued interest that was deemed uncollectible and written off against interest income.

A security is considered past due once it is 30 days contractually past due under the terms of the agreement. There were no securities past due as of March 31, 2025 or December 31, 2024.

The following table provides the amortized cost and fair value by contractual maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Residential and commercial mortgage-backed and government agency securities are stated separately as they are not due at a single maturity date.

Maturities - Debt Securities


dollars in millions	March 31, 2025				December 31, 2024
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Investment securities available for sale
Non-amortizing securities maturing in:
One year or less	$	5,503	$	5,508	$	5,090	$	5,086
After one through five years	7,727		7,764		8,945		8,949
After five through 10 years	353		338		346		330
After 10 years	22		22		22		22

Government agency	71		69		79		77
Residential mortgage-backed securities	16,905		16,605		16,161		15,620
Commercial mortgage-backed securities	3,759		3,594		3,869		3,666

Total investment securities available for sale	$	34,340	$	33,900	$	34,512	$	33,750
Investment securities held to maturity
Non-amortizing securities maturing in:
One year or less	$	450	$	443	$	429	$	419
After one through five years	1,281		1,209		1,299		1,208
After five through 10 years	547		483		546		468


Residential mortgage-backed securities	4,668		4,090		4,558		3,878
Commercial mortgage-backed securities	3,378		2,748		3,407		2,729



Total investment securities held to maturity	$	10,324	$	8,973	$	10,239	$	8,702

The following table presents interest and dividend income on investment securities:

Interest and Dividends on Investment Securities


dollars in millions	Three Months Ended March 31,
	2025		2024
Interest income - taxable investment securities(1)	$	413	$	281
Interest income - nontaxable investment securities	—		—
Dividend income - marketable equity securities	1		1
Interest on investment securities	$	414	$	282

(1) Amount includes interest income on securities purchased under agreements to resell.

The following table presents the gross realized gain and loss on sales of investment securities available for sale, and the net realized gain on sale of marketable equity securities:

Realized Gain (Loss) on Sale of Investment Securities, Net


dollars in millions	Three Months Ended March 31,
	2025		2024
Gross realized gain on sale of investment securities available for sale	$	1	$	—
Gross realized loss on sale of investment securities available for sale	(2)		—
Net realized loss on sale of investment securities available for sale	(1)		—
Net realized gain on sale of marketable equity securities	1		—
Realized gain (loss) on sale of investment securities, net	$	—	$	—

The following table provides information regarding investment securities available for sale with unrealized losses:

Gross Unrealized Losses on Debt Securities Available For Sale


dollars in millions	March 31, 2025
	Less than 12 months				12 months or more				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Investment securities available for sale
U.S. Treasury	$	902	$	(2)	$	590	$	(8)	$	1,492	$	(10)
Government agency	—		—		69		(2)		69		(2)
Residential mortgage-backed securities	1,796		(10)		3,531		(433)		5,327		(443)
Commercial mortgage-backed securities	126		(1)		1,285		(185)		1,411		(186)
Corporate bonds	47		(1)		406		(18)		453		(19)

Total	$	2,871	$	(14)	$	5,881	$	(646)	$	8,752	$	(660)

	December 31, 2024
	Less than 12 months				12 months or more				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Investment securities available for sale
U.S. Treasury	$	3,791	$	(12)	$	981	$	(15)	$	4,772	$	(27)
Government agency	—		—		77		(2)		77		(2)
Residential mortgage-backed securities	7,470		(61)		3,575		(521)		11,045		(582)
Commercial mortgage-backed securities	1,183		(8)		1,342		(202)		2,525		(210)
Corporate bonds	16		—		438		(22)		454		(22)

Total	$	12,460	$	(81)	$	6,413	$	(762)	$	18,873	$	(843)

As of March 31, 2025, there were 476 investment securities available for sale with continuous unrealized losses for more than 12 months, of which 416 were government sponsored enterprise-issued mortgage-backed securities, government agency securities, or U.S. Treasury securities and the remaining 60 were corporate bonds. BancShares has the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. 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, as of March 31, 2025, no allowance for credit loss was required. 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. As a result of this analysis, we determined that no allowance for credit loss was required for investment securities available for sale as of March 31, 2025.

BancShares’ portfolio of held to maturity debt securities consists of mortgage-backed securities issued by government agencies and government sponsored entities, U.S. Treasury notes, unsecured bonds issued by government agencies and government sponsored entities, and securities issued by the Supranational Entities & Multilateral Development Banks. Given the consistently strong credit rating of the U.S. Treasury, 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, no allowance for credit loss was required for debt securities held to maturity as of March 31, 2025.

There were no debt securities on nonaccrual status as of March 31, 2025 or December 31, 2024.

Investment securities having an aggregate carrying value of $4.07 billion at March 31, 2025, and $3.94 billion at December 31, 2024, were pledged as collateral to secure public funds on deposit and certain short-term borrowings, and for other purposes as required by law.

Certain investments held by BancShares are reported in other assets, including FHLB stock and nonmarketable securities without readily determinable fair values that are recorded at cost, and investments in qualified affordable housing projects, all of which are accounted for under the proportional amortization method (“PAM”).

NOTE 4 — LOANS AND LEASES

Unless otherwise noted, loans held for sale are not included in the following tables. Leases in the following tables include finance leases, but exclude operating lease equipment.

Loans by Class


dollars in millions	March 31, 2025		December 31, 2024
Commercial
Commercial construction	$	5,529	$	5,109
Owner occupied commercial mortgage	16,951		16,842
Non-owner occupied commercial mortgage	16,139		16,194
Commercial and industrial	31,899		31,640
Leases	2,022		2,014
Total commercial	72,540		71,799
Consumer
Residential mortgage	23,060		23,152
Revolving mortgage	2,635		2,567
Consumer auto	1,487		1,523
Consumer other	965		986
Total consumer	28,147		28,228
SVB
Global fund banking	28,572		27,904
Investor dependent - early stage	908		997
Investor dependent - growth stage	2,050		2,196
Innovation C&I and cash flow dependent	9,141		9,097



Total SVB (1)	40,671		40,194
Total loans and leases	$	141,358	$	140,221

(1) Total SVB Loans are irrespective of segment composition further described in Note 17—Segment Information.

At March 31, 2025 and December 31, 2024, accrued interest receivable on loans included in other assets was $601 million and $603 million, respectively, and was excluded from the estimate of credit losses.

The discount on acquired loans is accreted to interest income over the contractual life of the loan using the effective interest method. Discount accretion income was $84 million for the three months ended March 31, 2025, including $8 million for unfunded commitments. Discount accretion income was $163 million for the three months ended March 31, 2024, including $35 million for unfunded commitments.

The following table presents selected components of the amortized cost of loans, including the unamortized discount on acquired loans.

Components of Amortized Cost


dollars in millions	March 31, 2025		December 31, 2024
Deferred fees, including unamortized costs and unearned fees on non-PCD loans	$	(85)	$	(91)

Net unamortized discount on acquired loans
Non-PCD	$	1,449	$	1,504
PCD	75		94
Total net unamortized discount	$	1,524	$	1,598

The aging and nonaccrual status of the outstanding loans and leases by class at March 31, 2025 and December 31, 2024 are provided in the tables below. Loans and leases less than 30 days past due are considered current, as various grace periods allow borrowers to make payments within a stated period after the due date and remain in compliance with the respective agreement.

Loans and Leases - Delinquency and Nonaccrual Status (1) (2)


dollars in millions	March 31, 2025
	Accruing Loans
	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Accruing		Nonaccrual Loans		Total
Commercial
Commercial construction	$	21	$	17	$	41	$	79	$	5,441	$	5,520	$	9	$	5,529
Owner occupied commercial mortgage	59		7		3		69		16,806		16,875		76		16,951
Non-owner occupied commercial mortgage	104		54		71		229		15,543		15,772		367		16,139
Commercial and industrial	185		50		9		244		31,298		31,542		357		31,899
Leases	48		8		1		57		1,936		1,993		29		2,022
Total commercial	417		136		125		678		71,024		71,702		838		72,540
Consumer
Residential mortgage	188		28		6		222		22,677		22,899		161		23,060
Revolving mortgage	17		5		—		22		2,587		2,609		26		2,635
Consumer auto	10		2		—		12		1,467		1,479		8		1,487
Consumer other	5		3		3		11		953		964		1		965
Total consumer	220		38		9		267		27,684		27,951		196		28,147
SVB
Global fund banking	—		—		—		—		28,572		28,572		—		28,572
Investor dependent - early stage	5		1		—		6		874		880		28		908
Investor dependent - growth stage	2		3		—		5		2,003		2,008		42		2,050
Innovation C&I and cash flow dependent	73		—		—		73		8,966		9,039		102		9,141
Total SVB	80		4		—		84		40,415		40,499		172		40,671
Total loans and leases	$	717	$	178	$	134	$	1,029	$	139,123	$	140,152	$	1,206	$	141,358

	December 31, 2024
	Accruing Loans
	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Accruing		Nonaccrual Loans		Total
Commercial
Commercial construction	$	21	$	1	$	1	$	23	$	5,077	$	5,100	$	9	$	5,109
Owner occupied commercial mortgage	30		9		2		41		16,739		16,780		62		16,842
Non-owner occupied commercial mortgage	43		27		78		148		15,621		15,769		425		16,194
Commercial and industrial	118		39		16		173		31,182		31,355		285		31,640
Leases	33		11		2		46		1,937		1,983		31		2,014
Total commercial	245		87		99		431		70,556		70,987		812		71,799
Consumer
Residential mortgage	172		27		7		206		22,798		23,004		148		23,152
Revolving mortgage	20		4		—		24		2,519		2,543		24		2,567
Consumer auto	12		3		—		15		1,500		1,515		8		1,523
Consumer other	5		3		3		11		974		985		1		986
Total consumer	209		37		10		256		27,791		28,047		181		28,228
SVB
Global fund banking	—		—		—		—		27,904		27,904		—		27,904
Investor dependent - early stage	8		1		—		9		947		956		41		997
Investor dependent - growth stage	2		—		—		2		2,148		2,150		46		2,196
Innovation C&I and cash flow dependent	52		1		—		53		8,940		8,993		104		9,097
Total SVB	62		2		—		64		39,939		40,003		191		40,194
Total loans and leases	$	516	$	126	$	109	$	751	$	138,286	$	139,037	$	1,184	$	140,221

(1) Accrued interest that was reversed when the loan went to nonaccrual status was $7 million for the three months ended March 31, 2025 and $14 million for year ended December 31, 2024.

(2) Nonaccrual loans for which there was no related ALLL totaled $419 million at March 31, 2025 and $303 million at December 31, 2024.

Other real estate owned (“OREO”) and repossessed assets were $105 million as of March 31, 2025 and $64 million as of December 31, 2024.

Credit Quality Indicators

Loans and leases are monitored for credit quality on a recurring basis. Commercial loans and leases and consumer loans have different credit quality indicators as a result of the unique characteristics of the loan classes being evaluated. The credit quality indicators for commercial loans and leases are developed through a review of individual borrowers on an ongoing basis. Commercial loans are evaluated periodically with more frequent evaluations done on criticized loans. The indicators as of the date presented are based on the most recent assessment performed and are defined below:

Pass – A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.

Special mention – A special mention asset has potential weaknesses which deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful – An asset classified as doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently existing facts, conditions and values.

Loss – Assets classified as loss are considered uncollectible and of such little value it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to any potential for recovery or salvage value, but rather it is not appropriate to defer a full charge-off even though partial recovery may be affected in the future.

Ungraded – Ungraded loans represent loans not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of ungraded loans at March 31, 2025 and December 31, 2024, relate to business credit cards. Business credit card loans are subject to automatic charge-off when they become 120 days past due in the same manner as unsecured consumer lines of credit.

The credit quality indicator for consumer loans is based on delinquency status of the borrower as of the date presented. As the borrower becomes more delinquent, the likelihood of loss increases. An exemption is applied to government guaranteed loans as the principal repayments are insured by the Federal Housing Administration and U.S. Department of Veterans Affairs and thus remain on accrual status regardless of delinquency status.

The following tables summarize the commercial and SVB loans disaggregated by year of origination and by risk rating. The consumer loan delinquency status by year of origination is also presented below. The tables reflect the amortized cost of the loans and include PCD loans.

Commercial Loans - Risk Classifications by Class


March 31, 2025
Risk Classification:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2025		2024		2023		2022		2021		2020 & Prior		Revolving				Total
Commercial construction
Pass	$	636	$	1,384	$	1,662	$	1,079	$	192	$	132	$	162	$	1	$	5,248
Special Mention	28		25		83		21		—		7		—		—		164
Substandard	16		21		9		54		9		8		—		—		117
Doubtful	—		—		—		—		—		—		—		—		—
Ungraded	—		—		—		—		—		—		—		—		—
Total commercial construction	680		1,430		1,754		1,154		201		147		162		1		5,529
Owner occupied commercial mortgage
Pass	591		2,683		2,501		2,655		2,475		4,782		203		29		15,919
Special Mention	2		28		23		89		54		60		7		—		263
Substandard	13		58		104		219		78		282		14		1		769
Doubtful	—		—		—		—		—		—		—		—		—
Ungraded	—		—		—		—		—		—		—		—		—
Total owner occupied commercial mortgage	606		2,769		2,628		2,963		2,607		5,124		224		30		16,951
Non-owner occupied commercial mortgage
Pass	699		3,274		3,490		2,501		1,495		3,030		116		3		14,608
Special Mention	35		86		113		159		4		26		—		—		423
Substandard	32		311		137		230		38		279		—		—		1,027
Doubtful	—		15		—		11		4		51		—		—		81
Ungraded	—		—		—		—		—		—		—		—		—
Total non-owner occupied commercial mortgage	766		3,686		3,740		2,901		1,541		3,386		116		3		16,139
Commercial and industrial
Pass	4,253		8,002		4,110		2,919		1,689		1,805		6,662		53		29,493
Special Mention	90		119		99		244		143		28		133		—		856
Substandard	85		220		174		229		239		60		290		3		1,300
Doubtful	—		10		25		33		13		2		20		—		103
Ungraded	—		—		—		—		—		—		147		—		147
Total commercial and industrial	4,428		8,351		4,408		3,425		2,084		1,895		7,252		56		31,899
Leases
Pass	226		657		450		255		119		100		—		—		1,807
Special Mention	6		28		20		25		5		2		—		—		86
Substandard	6		37		34		19		11		14		—		—		121
Doubtful	—		2		3		2		1		—		—		—		8
Ungraded	—		—		—		—		—		—		—		—		—
Total leases	238		724		507		301		136		116		—		—		2,022
Total commercial	$	6,718	$	16,960	$	13,037	$	10,744	$	6,569	$	10,668	$	7,754	$	90	$	72,540

SVB - Risk Classifications by Class


March 31, 2025
Risk Classification:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2025		2024		2023		2022		2021		2020 & Prior		Revolving				Total
Global fund banking
Pass	$	214	$	902	$	172	$	111	$	18	$	19	$	27,049	$	83	$	28,568
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		3		—		—		1		—		4
Doubtful	—		—		—		—		—		—		—		—		—

Ungraded	—		—		—		—		—		—		—		—		—
Total global fund banking	214		902		172		114		18		19		27,050		83		28,572
Investor dependent - early stage
Pass	46		279		109		59		1		—		107		—		601
Special Mention	—		16		9		2		—		—		—		—		27
Substandard	—		64		88		50		8		—		41		3		254
Doubtful	2		2		12		7		1		—		2		—		26

Ungraded	—		—		—		—		—		—		—		—		—
Total investor dependent - early stage	48		361		218		118		10		—		150		3		908
Investor dependent - growth stage
Pass	136		804		309		177		12		—		188		—		1,626
Special Mention	—		45		4		1		13		—		28		—		91
Substandard	—		84		131		55		4		—		17		—		291
Doubtful	—		15		3		19		—		1		4		—		42

Ungraded	—		—		—		—		—		—		—		—		—
Total investor dependent - growth stage	136		948		447		252		29		1		237		—		2,050
Innovation C&I and cash flow dependent
Pass	446		1,915		1,284		1,099		342		104		2,247		12		7,449
Special Mention	43		—		64		73		20		—		132		—		332
Substandard	1		94		300		423		207		28		277		—		1,330
Doubtful	7		—		12		9		—		—		2		—		30

Ungraded	—		—		—		—		—		—		—		—		—
Total innovation C&I and cash flow dependent	497		2,009		1,660		1,604		569		132		2,658		12		9,141
























Total SVB	$	895	$	4,220	$	2,497	$	2,088	$	626	$	152	$	30,095	$	98	$	40,671

Consumer Loans - Delinquency Status by Class


March 31, 2025
Days Past Due:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2025		2024		2023		2022		2021		2020 & Prior		Revolving				Total
Residential mortgage
Current	$	391	$	2,275	$	2,860	$	5,152	$	5,021	$	7,007	$	6	$	—	$	22,712
30-59 days	—		7		12		28		39		115		—		—		201
60-89 days	—		—		2		5		5		28		—		—		40
90 days or greater	1		1		3		8		8		86		—		—		107
Total residential mortgage	392		2,283		2,877		5,193		5,073		7,236		6		—		23,060
Revolving mortgage
Current	—		—		—		—		—		—		2,485		112		2,597
30-59 days	—		—		—		—		—		—		14		6		20
60-89 days	—		—		—		—		—		—		1		6		7
90 days or greater	—		—		—		—		—		—		3		8		11
Total revolving mortgage	—		—		—		—		—		—		2,503		132		2,635
Consumer auto
Current	131		565		321		245		133		75		—		—		1,470
30-59 days	—		2		2		3		2		1		—		—		10
60-89 days	—		1		1		1		1		—		—		—		4
90 days or greater	—		1		1		1		—		—		—		—		3
Total consumer auto	131		569		325		250		136		76		—		—		1,487
Consumer other
Current	16		142		127		82		25		21		540		—		953
30-59 days	—		1		1		—		—		1		3		—		6
60-89 days	—		—		—		—		—		1		2		—		3
90 days or greater	—		—		—		—		—		1		2		—		3
Total consumer other	16		143		128		82		25		24		547		—		965
Total consumer	$	539	$	2,995	$	3,330	$	5,525	$	5,234	$	7,336	$	3,056	$	132	$	28,147

The following tables represent current credit quality indicators by origination year as of December 31, 2024:

Commercial Loans - Risk Classifications by Class


December 31, 2024
Risk Classification:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2024		2023		2022		2021		2020		2019 & Prior		Revolving				Total
Commercial construction
Pass	$	1,095	$	1,854	$	1,276	$	287	$	152	$	52	$	148	$	—	$	4,864
Special Mention	—		80		35		—		7		24		—		—		146
Substandard	—		8		47		20		7		17		—		—		99
Doubtful	—		—		—		—		—		—		—		—		—
Ungraded	—		—		—		—		—		—		—		—		—
Total commercial construction	1,095		1,942		1,358		307		166		93		148		—		5,109
Owner occupied commercial mortgage
Pass	2,721		2,445		2,747		2,581		2,199		2,988		223		29		15,933
Special Mention	22		46		70		58		32		61		9		—		298
Substandard	30		34		136		82		73		245		10		1		611
Doubtful	—		—		—		—		—		—		—		—		—
Ungraded	—		—		—		—		—		—		—		—		—
Total owner occupied commercial mortgage	2,773		2,525		2,953		2,721		2,304		3,294		242		30		16,842
Non-owner occupied commercial mortgage
Pass	2,879		3,082		2,744		2,041		1,598		2,134		119		3		14,600
Special Mention	—		66		293		43		4		86		—		—		492
Substandard	12		15		171		39		116		653		—		—		1,006
Doubtful	—		—		—		—		20		76		—		—		96
Ungraded	—		—		—		—		—		—		—		—		—
Total non-owner occupied commercial mortgage	2,891		3,163		3,208		2,123		1,738		2,949		119		3		16,194
Commercial and industrial
Pass	9,677		4,862		3,417		2,042		1,101		1,408		6,886		62		29,455
Special Mention	92		53		178		245		25		69		114		—		776
Substandard	61		127		225		106		167		207		274		4		1,171
Doubtful	5		23		35		15		1		18		6		—		103
Ungraded	—		—		—		—		—		—		135		—		135
Total commercial and industrial	9,835		5,065		3,855		2,408		1,294		1,702		7,415		66		31,640
Leases
Pass	739		506		300		147		96		46		—		—		1,834
Special Mention	13		17		29		5		4		—		—		—		68
Substandard	21		29		23		13		9		8		—		—		103
Doubtful	1		3		2		2		1		—		—		—		9
Ungraded	—		—		—		—		—		—		—		—		—
Total leases	774		555		354		167		110		54		—		—		2,014
Total commercial	$	17,368	$	13,250	$	11,728	$	7,726	$	5,612	$	8,092	$	7,924	$	99	$	71,799

SVB - Risk Classifications by Class


December 31, 2024
Risk Classification:	Term Loans by Origination Year														Revolving Converted to Term Loans
	2024		2023		2022		2021		2020		2019 & Prior		Revolving				Total
Global fund banking
Pass	$	892	$	179	$	147	$	20	$	14	$	12	$	26,588	$	36	$	27,888
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		5		8		2		—		1		—		16
Doubtful	—		—		—		—		—		—		—		—		—

Ungraded	—		—		—		—		—		—		—		—		—
Total global fund banking	892		179		152		28		16		12		26,589		36		27,904
Investor dependent - early stage
Pass	293		201		94		5		—		—		97		3		693
Special Mention	8		8		3		—		—		—		—		—		19
Substandard	44		83		62		17		—		—		41		—		247
Doubtful	15		16		6		—		—		—		1		—		38

Ungraded	—		—		—		—		—		—		—		—		—
Total investor dependent - early stage	360		308		165		22		—		—		139		3		997
Investor dependent - growth stage
Pass	842		439		258		32		—		—		218		—		1,789
Special Mention	9		20		3		—		—		—		26		—		58
Substandard	78		90		102		14		1		—		20		—		305
Doubtful	11		3		22		5		—		—		3		—		44

Ungraded	—		—		—		—		—		—		—		—		—
Total investor dependent - growth stage	940		552		385		51		1		—		267		—		2,196
Innovation C&I and cash flow dependent
Pass	2,136		1,433		1,205		347		120		—		2,147		5		7,393
Special Mention	53		183		77		57		4		—		89		—		463
Substandard	94		220		389		226		28		—		180		—		1,137
Doubtful	—		—		7		—		—		—		97		—		104

Ungraded	—		—		—		—		—		—		—		—		—
Total innovation C&I and cash flow dependent	2,283		1,836		1,678		630		152		—		2,513		5		9,097
























Total SVB	$	4,475	$	2,875	$	2,380	$	731	$	169	$	12	$	29,508	$	44	$	40,194

Consumer Loans - Delinquency Status by Class


December 31, 2024
Days Past Due:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2024		2023		2022		2021		2020		2019 & Prior		Revolving				Total
Residential mortgage
Current	$	2,178	$	2,968	$	5,264	$	5,148	$	2,913	$	4,353	$	4	$	—	$	22,828
30-59 days	3		13		19		23		31		95		—		—		184
60-89 days	1		3		5		2		2		28		—		—		41
90 days or greater	—		4		6		7		9		73		—		—		99
Total residential mortgage	2,182		2,988		5,294		5,180		2,955		4,549		4		—		23,152
Revolving mortgage
Current	—		—		—		—		—		—		2,420		108		2,528
30-59 days	—		—		—		—		—		—		16		6		22
60-89 days	—		—		—		—		—		—		1		5		6
90 days or greater	—		—		—		—		—		—		3		8		11
Total revolving mortgage	—		—		—		—		—		—		2,440		127		2,567
Consumer auto
Current	617		358		277		155		68		27		—		—		1,502
30-59 days	3		3		3		2		1		1		—		—		13
60-89 days	1		1		1		1		—		—		—		—		4
90 days or greater	1		1		1		1		—		—		—		—		4
Total consumer auto	622		363		282		159		69		28		—		—		1,523
Consumer other
Current	147		144		99		30		6		18		531		—		975
30-59 days	1		—		—		—		—		1		3		—		5
60-89 days	—		—		1		—		—		—		2		—		3
90 days or greater	—		—		—		—		—		1		2		—		3
Total consumer other	148		144		100		30		6		20		538		—		986
Total consumer	$	2,952	$	3,495	$	5,676	$	5,369	$	3,030	$	4,597	$	2,982	$	127	$	28,228

Gross Charge-offs

Gross charge-off vintage disclosures by origination year and loan class are summarized in the following tables:


Three Months Ended March 31, 2025
	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2025		2024		2023		2022		2021		2020 & Prior		Revolving				Total
Commercial


Non-owner occupied commercial mortgage	$	—	$	10	$	3	$	10	$	—	$	17	$	—	$	—	$	40
Commercial and industrial	—		6		19		10		4		5		15		1		60
Leases	—		1		1		1		1		1		—		—		5
Total commercial	—		17		23		21		5		23		15		1		105
Consumer


Consumer auto	—		1		1		1		—		—		—		—		3
Consumer other	—		—		1		—		—		—		4		—		5
Total consumer	—		1		2		1		—		—		4		—		8
SVB

Investor dependent - early stage	—		4		14		9		3		—		1		—		31
Investor dependent - growth stage	—		—		—		3		3		2		—		—		8
Innovation C&I and cash flow dependent	—		—		—		—		—		—		15		—		15



Total SVB	—		4		14		12		6		2		16		—		54
Total loans and leases	$	—	$	22	$	39	$	34	$	11	$	25	$	35	$	1	$	167


Three Months Ended March 31, 2024
	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2024		2023		2022		2021		2020		2019 & Prior		Revolving				Total
Commercial


Non-owner occupied commercial mortgage	$	—	$	—	$	—	$	—	$	—	$	29	$	—	$	—	$	29
Commercial and industrial	1		8		8		2		1		2		14		—		36
Leases	—		2		4		2		1		1		—		—		10
Total commercial	1		10		12		4		2		32		14		—		75
Consumer


Consumer auto	—		1		1		—		—		—		—		—		2
Consumer other	—		—		1		—		—		—		4		—		5
Total consumer	—		1		2		—		—		—		4		—		7
SVB

Investor dependent - early stage	—		4		13		6		—		—		1		—		24
Investor dependent - growth stage	—		2		4		7		1		—		—		—		14
Innovation C&I and cash flow dependent	—		3		—		—		—		—		5		—		8
Total SVB	—		9		17		13		1		—		6		—		46
Total loans and leases	$	1	$	20	$	31	$	17	$	3	$	32	$	24	$	—	$	128

Loan Modifications for Borrowers Experiencing Financial Difficulties

As part of BancShares’ ongoing credit risk management practices, BancShares attempts to work with borrowers when necessary to extend or modify loan terms to better align with the borrowers’ current ability to repay. BancShares’ modifications granted to debtors experiencing financial difficulties typically take the form of term extensions, interest rate reductions, payment delays, principal forgiveness, or a combination thereof. Modifications are made in accordance with internal policies and guidelines to conform to regulatory guidance.

The following tables present the amortized cost of loan modifications made to debtors experiencing financial difficulty, disaggregated by class and type of loan modification. The tables also provide financial effects by type of such loan modifications for the respective loan class.

Amortized Cost of Loans Modified during the three months ended March 31, 2025


dollars in millions	Term Extension (1)		Payment Delay		Interest Rate Reduction		Term Extension(1) and Interest Rate Reduction		Term Extension(1) and Payment Delay		Other Combinations		Total		Percent of Total Loan Class
Commercial
Commercial construction	$	16	$	—	$	—	$	—	$	1	$	—	$	17	0.31	%
Owner occupied commercial mortgage	12		2		—		—		14		—		28		0.16
Non-owner occupied commercial mortgage	18		—		—		—		62		—		80		0.49
Commercial and industrial	24		17		—		2		17		—		60		0.19

Total commercial	70		19		—		2		94		—		185		0.25
Consumer
Residential mortgage	4		—		—		1		3		—		8		0.04



Total consumer	4		—		—		1		3		—		8		0.03
SVB

Investor dependent - early stage	—		11		—		—		—		—		11		1.22
Investor dependent - growth stage	4		10		—		—		—		—		14		0.70
Innovation C&I and cash flow dependent	37		—		—		—		7		—		44		0.48
Total SVB	41		21		—		—		7		—		69		0.17
Total loans and leases	$	115	$	40	$	—	$	3	$	104	$	—	$	262	0.19	%

(1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended.

Amortized Cost of Loans Modified during the three months ended March 31, 2024


dollars in millions	Term Extension (1)		Payment Delay		Interest Rate Reduction		Term Extension(1) and Interest Rate Reduction		Term Extension(1) and Payment Delay		Other Combinations		Total		Percent of Total Loan Class
Commercial
Commercial construction	$	3	$	—	$	—	$	—	$	—	$	—	$	3	0.08	%
Owner occupied commercial mortgage	15		—		1		1		9		—		26		0.16
Non-owner occupied commercial mortgage	38		—		—		—		27		—		65		0.42
Commercial and industrial	23		—		—		8		—		—		31		0.11

Total commercial	79		—		1		9		36		—		125		0.19
Consumer
Residential mortgage	6		—		—		2		—		—		8		0.03
Revolving mortgage	1		—		—		1		—		—		2		0.08


Total consumer	7		—		—		3		—		—		10		0.03
SVB

Investor dependent - early stage	—		6		—		—		2		—		8		0.63
Investor dependent - growth stage	—		24		—		—		10		—		34		1.25
Innovation C&I and cash flow dependent	18		—		—		—		7		—		25		0.27



Total SVB	18		30		—		—		19		—		67		0.17
Total loans and leases	$	104	$	30	$	1	$	12	$	55	$	—	$	202	0.15	%

(1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended.

Financial Effects of Loan Modifications made during the three months ended March 31, 2025


dollars in millions	Weighted Average Term Extension (in Months)	Weighted Average Interest Rate Reduction		Weighted Average Payment Delay (in Months)	Amount of Principal Forgiven
Commercial
Commercial construction	8	—	%	5	$	—
Owner occupied commercial mortgage	8	—		6	—
Non-owner occupied commercial mortgage	6	—		6	—
Commercial and industrial	9	1.65		9	—

Total commercial	7	1.65		7	—
Consumer
Residential mortgage	22	1.87		5	—
Revolving mortgage	60	3.21		5	—
Consumer auto	20	—		4	—
Consumer other	—	9.97		—	—
Total consumer	24	2.41		5	—
SVB

Investor dependent - early stage	—	—		5	—
Investor dependent - growth stage	12	—		6	—
Innovation C&I and cash flow dependent	22	—		12	—
Total SVB	21	—		7	—
Total loans and leases	11	2.06	%	7	$	—

Financial Effects of Loan Modifications made during the three months ended March 31, 2024


dollars in millions	Weighted Average Term Extension (in Months)	Weighted Average Interest Rate Reduction		Weighted Average Payment Delay (in Months)	Amount of Principal Forgiven
Commercial
Commercial construction	22	2.49	%	—	$	—
Owner occupied commercial mortgage	23	0.79		20	—
Non-owner occupied commercial mortgage	27	—		48	—
Commercial and industrial	9	1.39		4	—

Total commercial	21	1.31		41	—
Consumer
Residential mortgage	52	1.52		—	—
Revolving mortgage	59	4.15		—	—
Consumer auto	30	0.26		—	—
Consumer other	49	9.19		—	—
Total consumer	53	2.41		—	—
SVB

Investor dependent - early stage	6	—		7	—
Investor dependent - growth stage	19	—		10	—
Innovation C&I and cash flow dependent	12	—		6	—



Total SVB	14	—		9	—
Total loans and leases	21	1.52	%	22	$	—

Borrowers experiencing financial difficulties are typically identified in our credit risk management process before loan modifications occur. An assessment of whether a borrower is experiencing financial difficulty is reassessed or performed on the date of a modification. Since the effect of most modifications made to borrowers experiencing financial difficulty is already included in the ALLL because of the measurement methodologies used to estimate the ALLL, a change to the ALLL is generally not recorded upon modification. Upon BancShares’ determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off.

At March 31, 2025, there were $53 million of loans modified in the twelve months ended March 31, 2025, which defaulted subsequent to modification.

The following tables present the amortized cost and performance of loans to borrowers experiencing financial difficulties for which the terms of the loan were modified during the referenced periods. The period of delinquency is based on the number of days the scheduled payment is contractually past due.

Modified Loans Payment Status (twelve months ended March 31, 2025)


dollars in millions	Current		30–59 Days Past Due		60–89 Days Past Due		90 Days or Greater Past Due		Total
Commercial
Commercial construction	$	25	$	—	$	—	$	—	$	25
Owner occupied commercial mortgage	61		3		1		—		65
Non-owner occupied commercial mortgage	204		9		—		23		236
Commercial and industrial	180		4		1		2		187

Total commercial	470		16		2		25		513
Consumer
Residential mortgage	12		1		1		3		17
Revolving mortgage	8		—		—		—		8


Total consumer	20		1		1		3		25
SVB

Investor dependent - early stage	22		3		—		—		25
Investor dependent - growth stage	41		—		—		—		41
Innovation C&I and cash flow dependent	143		—		—		3		146
Total SVB	206		3		—		3		212
Total loans and leases	$	696	$	20	$	3	$	31	$	750

Modified Loans Payment Status (twelve months ended March 31, 2024)


dollars in millions	Current		30–59 Days Past Due		60–89 Days Past Due		90 Days or Greater Past Due		Total
Commercial
Commercial construction	$	4	$	—	$	—	$	—	$	4
Owner occupied commercial mortgage	26		2		—		1		29
Non-owner occupied commercial mortgage	314		39		—		—		353
Commercial and industrial	107		5		2		1		115

Total commercial	451		46		2		2		501
Consumer
Residential mortgage	15		1		—		1		17
Revolving mortgage	4		—		—		—		4


Total consumer	19		1		—		1		21
SVB

Investor dependent - early stage	22		2		—		3		27
Investor dependent - growth stage	63		—		—		—		63
Innovation C&I and cash flow dependent	56		—		—		28		84



Total SVB	141		2		—		31		174
Total loans and leases	$	611	$	49	$	2	$	34	$	696

At March 31, 2025, there were $6 million of commitments to lend additional funds to debtors experiencing financial difficulty for which the terms of the loan were modified during the three months ended March 31, 2025. At December 31, 2024, there were $55 million of commitments to lend additional funds to debtors experiencing financial difficulty for which the terms of the loan were modified during the year ended December 31, 2024.

Loans Pledged

The following table provides information regarding loans pledged as collateral for borrowing capacity through the FHLB of Atlanta, the Federal Reserve Bank (“FRB”) and FDIC.

Loans Pledged


dollars in millions	March 31, 2025		December 31, 2024
FHLB of Atlanta
Lendable collateral value of pledged non-PCD loans	$	17,992	$	17,873
Less: advances	—		—
Less: letters of credit	1,450		1,450
Available borrowing capacity	$	16,542	$	16,423
Pledged non-PCD loans	$	30,112	$	30,421

FRB
Lendable collateral value of pledged non-PCD loans	$	5,612	$	5,475
Less: advances	—		—
Available borrowing capacity	$	5,612	$	5,475
Pledged non-PCD loans	$	6,432	$	6,309

FDIC
Lendable collateral value of pledged loans	$	39,415	$	41,282
Less: advances	—		—
Less: Purchase Money Note	35,991		35,991
Available borrowing capacity (1)	$	—	$	5,291
Pledged loans	$	39,173	$	41,040

(1) The draw period ended on March 27, 2025, therefore there is no available borrowing capacity at March 31, 2025.

As a member of the FHLB, FCB can access financing based on an evaluation of its creditworthiness, statement of financial position, size and eligibility of collateral. FCB may at any time grant a security interest in, sell, convey or otherwise dispose of any of the assets used for collateral, provided that FCB is in compliance with the collateral maintenance requirement immediately following such disposition.

Under borrowing arrangements with the FRB, BancShares has access to the FRB Discount Window on a secured basis. There were no outstanding borrowings with the FRB Discount Window at March 31, 2025 or December 31, 2024.

In connection with the SVBB Acquisition, FCB and the FDIC entered into financing agreements, including the five-year Purchase Money Note, and the Advance Facility Agreement, which allowed for advances through March 27, 2025. There were no amounts outstanding at the end of the draw period of the facility on March 27, 2025. Refer to Note 2—Business Combinations for further discussion of these agreements and Note 9—Borrowings for the outstanding carrying value of the Purchase Money Note.

NOTE 5 — ALLOWANCE FOR LOAN AND LEASE LOSSES

The ALLL is reported as a separate line item on the Consolidated Balance Sheets, while the reserve for off-balance sheet credit exposure is included in other liabilities. The provision or benefit for credit losses related to (i) loans and leases (ii) off-balance sheet credit exposure, and (iii) investment securities available for sale, if any, is reported in the Consolidated Statements of Income as provision or benefit for credit losses.

The ALLL activity for loans and leases is summarized in the following table:

Allowance for Loan and Lease Losses


dollars in millions	Three Months Ended March 31, 2025								Three Months Ended March 31, 2024
	Commercial		Consumer		SVB		Total		Commercial		Consumer		SVB		Total
Balance at beginning of period	$	1,063	$	158	$	455	$	1,676	$	1,126	$	166	$	455	$	1,747


Provision (benefit) for loan and lease losses	105		10		33		148		59		(6)		40		93

Charge-offs	(105)		(8)		(54)		(167)		(75)		(7)		(46)		(128)
Recoveries	15		3		5		23		10		2		13		25
Balance at end of period	$	1,078	$	163	$	439	$	1,680	$	1,120	$	155	$	462	$	1,737

The increase in the ALLL at March 31, 2025 compared to December 31, 2024 was primarily due to modest deterioration in the macroeconomic forecast, as well as increases in loan volume, partially offset by the result of a mix shift from the investor dependent portfolio to the global fund banking portfolio, which has a lower loss rate relative to our other loan portfolios, and lower specific reserves for individually evaluated loans.

The following table presents the components of the provision for credit losses:

Provision for Credit Losses


dollars in millions	Three Months Ended March 31,
	2025		2024

Provision for loan and lease losses	$	148	$	93


Provision (benefit) for off-balance sheet credit exposure	6		(29)


Provision for credit losses	$	154	$	64

NOTE 6 — LEASES

Lessee

BancShares’ leases primarily include administrative offices and bank locations. Substantially all of our lease liabilities relate to United States real estate leases under operating lease arrangements. Our real estate leases have remaining lease terms of up to 33 years. Our lease terms may include options to extend or terminate the lease, and our operating leases have renewal terms that can extend from 1 to 25 years. The options are included in the lease term when it is determined that it is reasonably certain the option will be exercised.

The following table presents supplemental balance sheet information and remaining weighted average lease terms and discount rates:

Supplemental Lease Information


dollars in millions	Classification	March 31, 2025			December 31, 2024
Lease assets:
Operating lease ROU assets	Other assets	$	300		$	316
Finance leases	Premises and equipment	35			15
Total lease assets		$	335		$	331
Lease liabilities:
Operating leases	Other liabilities	$	340		$	357
Finance leases	Other borrowings	36			15
Total lease liabilities		$	376		$	372
Weighted-average remaining lease terms:
Operating leases		7.3 years			7.4 years
Finance leases		8.9 years			11.7 years
Weighted-average discount rate:
Operating leases		2.94		%	2.94		%
Finance leases		4.31			3.96

As of March 31, 2025, there were no leases that have not yet commenced that would have a material impact on BancShares’ consolidated financial statements.

The following table presents components of lease cost:

Components of Net Lease Cost


dollars in millions		Three Months Ended March 31,
	Classification	2025		2024
Operating lease cost	Occupancy expense	$	18	$	18

Finance lease ROU asset amortization	Equipment expense	1		1

Variable lease cost (1)	Occupancy expense	7		9
Sublease income	Occupancy expense	(2)		(1)
Net lease cost (1)		$	24	$	27

(1) Includes short-term lease cost.

Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term.

For finance leases, the right of use (“ROU”) asset is amortized straight-line over the lease term as equipment expense and interest on the lease liability is recognized separately; however, interest on the lease liability was less than $1 million per year and is therefore not presented in the table above.

Variable lease cost includes common area maintenance, property taxes, utilities, and other operating expenses related to leased premises recognized in the period in which the expense was incurred. Certain of our lease agreements also include rental payments adjusted periodically for inflation. While lease liabilities are not remeasured because of these changes, these adjustments are treated as variable lease costs and recognized in the period in which the expense is incurred.

Sublease income results from leasing excess building space that BancShares is no longer utilizing under operating leases, which have remaining lease terms of up to 12 years.

The following table presents supplemental cash flow information related to leases:

Supplemental Cash Flow Information


dollars in millions	Three Months Ended March 31,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	19	$	18

Financing cash flows from finance leases	1		—
ROU assets obtained in exchange for new operating lease liabilities	3		17
ROU assets obtained in exchange for new finance lease liabilities	22		—

Lessor

BancShares leases equipment to commercial end-users under operating lease and finance lease arrangements. The majority of operating lease equipment is long-lived rail equipment, which is typically leased several times over its life. We also lease technology and office equipment, and large and small industrial, medical, and transportation equipment under both operating leases and finance leases.

Our Rail operating leases typically do not include purchase options. Many of our finance leases, and other equipment operating leases, offer the lessee the option to purchase the equipment at fair market value or for a nominal fixed purchase option. Many of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond the initial contractual term. Our leases typically do not include early termination options. Continued rent payments are due if leased equipment is not returned at the end of the lease.

The table that follows presents lease income related to BancShares’ operating and finance leases:

Lease Income


dollars in millions	Three Months Ended March 31,
	2025		2024
Lease income – operating leases	$	254	$	237
Variable lease income – operating leases (1)	16		18
Rental income on operating leases	270		255
Interest income – sales type and direct financing leases	43		43
Variable lease income included in other noninterest income (2)	14		16
Interest income – leveraged leases	1		1
Total lease income	$	328	$	315

(1) Primarily includes per diem railcar operating lease rental income earned on a time or mileage usage basis.

(2) Includes revenue related to insurance coverage on leased equipment and leased equipment property tax reimbursements due from customers.

NOTE 7 — GOODWILL AND CORE DEPOSIT INTANGIBLES

Goodwill

BancShares had goodwill of $346 million at March 31, 2025 and December 31, 2024. There was no goodwill impairment during the three months ended March 31, 2025 or 2024. Goodwill relates to the General Bank reporting segment.

Core Deposit Intangibles

Core deposit intangibles represent the estimated fair value of core deposits and other customer relationships acquired. Core deposit intangibles are being amortized over their estimated useful lives. The following tables summarize the activity for core deposit intangibles:

Core Deposit Intangibles


	Three Months Ended March 31,
dollars in millions	2025
Balance at beginning of period, net of accumulated amortization	$	249


Less: amortization for the period	15
Balance at end of period, net of accumulated amortization	$	234

The following table summarizes the accumulated amortization balance for core deposit intangibles:

Core Deposit Intangible Accumulated Amortization


dollars in millions	March 31, 2025		December 31, 2024
Gross balance	$	501	$	501
Less: accumulated amortization	267		252
Balance, net of accumulated amortization	$	234	$	249

The following table summarizes the expected amortization expense as of March 31, 2025 in subsequent periods for core deposit intangibles:

Core Deposit Intangible Expected Amortization


dollars in millions
Remainder 2025	$	39
2026	46
2027	39
2028	34
2029	30
2030	28
Thereafter	18
Balance, net of accumulated amortization	$	234

NOTE 8 — VARIABLE INTEREST ENTITIES

Unconsolidated VIEs

Unconsolidated VIEs include limited partnership interests and joint ventures where BancShares’ involvement is limited to an investor interest and BancShares does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance or obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

The table below provides a summary of the assets and liabilities included on the Consolidated Balance Sheets associated with unconsolidated VIEs. The table also presents our maximum exposure to loss which consists of outstanding book basis and unfunded commitments for future investments, and represents potential losses that would be incurred under hypothetical circumstances, such that the value of BancShares’ interests and any associated collateral declines to zero and assuming no recovery. BancShares believes the possibility is remote under this hypothetical scenario; accordingly, this disclosure is not an indication of expected loss.

Unconsolidated VIEs Carrying Value


dollars in millions	March 31, 2025		December 31, 2024
Affordable housing tax credit investments	$	2,406	$	2,357
Other tax credit equity investments	2		2
Total tax credit equity investments	$	2,408	$	2,359
Other unconsolidated investments	170		157
Total affordable housing tax credit and other unconsolidated investments (maximum loss exposure) (1)	$	2,578	$	2,516
Liabilities for commitments to fund tax credit investments (2)	$	1,234	$	1,214

(1) Included in other assets.

(2) Represents commitments to invest in qualified affordable housing investments and other investments qualifying for community reinvestment tax credits. These commitments are payable on demand and included in other liabilities.

We have investments in qualified affordable housing projects, primarily to support our Community Reinvestment Act (“CRA”) initiatives and obtain tax credits. These investments are accounted for using the PAM and provide tax benefits in the form of tax deductions from operating losses and tax credits. Under the PAM, the initial cost of the investment is amortized in proportion to the tax credits and other tax benefits received, and the net investment performance is recognized on the Consolidated Statements of Income as a component of income tax expense.

The table below summarizes the amortization of our affordable housing tax credit investments and the related tax credits and other tax benefits that are recognized in income tax expense on the Consolidated Statements of Income.

Tax Credit Investments Recognized in Income Tax Expense


dollars in millions	Three Months Ended March 31,
	2025		2024
Amortization of affordable housing tax credit investments (1)	$	64	$	59
Tax credits from affordable housing tax credit investments	(68)		(57)

Other tax benefits from affordable housing tax credit investments	(7)		(11)
Net income tax benefit from affordable housing tax credit investments (2)	$	(11)	$	(9)

(1) Amortization is included in depreciation, amortization, and accretion, net as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows.

(2) Net income tax benefit impact is included in net income in cash flows from operating activities on the Consolidated Statements of Cash Flows. Changes in income taxes payable are reported in the net change in other liabilities as an adjustment to reconcile net income to net cash provided by operating activities.

NOTE 9 — BORROWINGS

Short-term Borrowings

Securities Sold under Agreements to Repurchase

BancShares held $450 million and $367 million at March 31, 2025 and December 31, 2024, respectively, of securities sold under agreements to repurchase that have overnight contractual maturities and are collateralized by government agency securities. The weighted average interest rate for securities sold under agreements to repurchase was 0.51% and 0.59% at March 31, 2025 and December 31, 2024, respectively.

BancShares utilizes securities sold under agreements to repurchase to facilitate the needs for collateralization of commercial customers and secure wholesale funding needs. Repurchase agreements are transactions whereby BancShares offers to sell to a counterparty an undivided interest in an eligible security at an agreed upon purchase price, and which obligates BancShares to repurchase the security at an agreed upon date, repurchase price and interest rate. These agreements are recorded at the amount of cash received in connection with the transactions and are reflected as securities sold under customer repurchase agreements.

BancShares monitors collateral levels on a continuous basis and maintains records of each transaction specifically describing the applicable security and the counterparty’s fractional interest in that security, and segregates the security from general assets in accordance with regulations governing custodial holdings of securities. The primary risk with repurchase agreements is market risk associated with the investments securing the transactions, as additional collateral may be required based on fair value changes of the underlying investments. Securities pledged as collateral under repurchase agreements are maintained with safekeeping agents. The carrying value of investment securities pledged as collateral under repurchase agreements was $526 million and $435 million at March 31, 2025 and December 31, 2024, respectively.

Long-term Borrowings

On March 12, 2025, the Parent Company issued and sold $500 million aggregate principal amount of its 5.231% Fixed-to-Floating Rate Senior Notes due 2031 and $750 million aggregate principal amount of its 6.254% Fixed-to-Fixed Rate Subordinated Notes due 2040 in a public offering.

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

Long-term Borrowings


dollars in millions	Maturity	March 31, 2025		December 31, 2024
Parent Company:
Senior:
Fixed-to-Floating Senior Notes at 5.231%(1)	March 2031	$	497	$	—
Subordinated:
Fixed-to-Floating subordinated notes at 3.375%(2)	March 2030	350		350
Fixed-to-Fixed Subordinated Notes at 6.254%(3)	March 2040	745		—
Subsidiaries:
Senior:
Fixed senior unsecured notes at 6.00%	April 2036	58		58
Subordinated:
Fixed subordinated notes at 6.125%	March 2028	441		445
Secured:
Purchase Money Note to FDIC fixed at 3.50%(4)	March 2028	35,829		35,816
Capital lease obligations	Maturities through May 2057	36		15
Total long-term borrowings		$	37,956	$	36,684

(1) The fixed rate period will end 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 basis points (“bps”) per annum until the maturity date (or date of earlier redemption).

(2) The fixed rate period ended on March 15, 2025, and the notes now bear a floating interest rate equal to Three-Month Term SOFR plus 246.5 bps per annum.

(3) 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 plus 197 bps per annum until the maturity date (or date of earlier redemption).

(4) Refer to Note 2—Business Combinations and Note 4—Loans and Leases.

Pledged Assets

Refer to the “Loans Pledged” section in Note 4—Loans and Leases for information on loans pledged as collateral to secure borrowings.

NOTE 10 — DERIVATIVE FINANCIAL INSTRUMENTS

Our derivatives designated as hedging instruments include interest rate swap contracts utilized to manage our interest rate exposure for items on our Consolidated Balance Sheets. This includes floating-rate loan portfolio cash flow hedges and fair value hedges of our fixed-rate borrowings and deposits.

Our derivatives not designated as hedging instruments mainly include interest rate and foreign exchange contracts that our customers utilized for their risk management needs. We typically manage our exposure to these customer derivatives by entering into offsetting or “back-to-back” interest rate and foreign exchange contracts with third-party dealers.

Derivative instruments that are cleared through certain central counterparty clearing houses are settled-to-market and reported net of collateral positions.

Refer to Note 11—Fair Value for further information on derivatives.

The following table presents notional amounts and fair values of derivative financial instruments:

Notional Amount and Fair Value of Derivative Financial Instruments


dollars in millions	March 31, 2025						December 31, 2024
	Notional Amount		Asset Fair Value		Liability Fair Value		Notional Amount		Asset Fair Value		Liability Fair Value
Derivatives designated as hedging instruments (Qualifying hedges)
Fair Value Hedges
Interest rate contracts hedging time deposits	$	134	$	—	$	—	$	334	$	—	$	—
Interest rate contracts hedging long-term borrowings	400		—		—		750		—		—
Total fair value hedges (1) (2)	534		—		—		1,084		—		—
Cash Flow Hedges
Interest rate contracts hedging loans (1) (2)	4,000		1		—		3,500		1		—
Total derivatives designated as hedging instruments	$	4,534	$	1	$	—	$	4,584	$	1	$	—
Derivatives not designated as hedging instruments (Non-qualifying hedges)
Interest rate contracts (1) (2)	$	26,924	$	428	$	(433)	$	26,235	$	491	$	(516)
Foreign exchange contracts (3)	9,971		108		(107)		7,843		152		(108)
Other contracts (4)	1,419		16		(1)		1,316		16		(1)
Total derivatives not designated as hedging instruments	$	38,314	$	552	$	(541)	$	35,394	$	659	$	(625)
Gross derivatives fair values presented in the Consolidated Balance Sheets			$	553	$	(541)			$	660	$	(625)
Less: gross amounts offset in the Consolidated Balance Sheets			—		—				—		—
Net amount presented in other assets and other liabilities in the Consolidated Balance Sheets			$	553	$	(541)			$	660	$	(625)

(1) Fair value balances include accrued interest.

(2) BancShares accounts for swap contracts cleared by the Chicago Mercantile Exchange and LCH Clearnet as “settled-to-market.” As a result, the derivative asset and liability fair values in the table above are presented net of the variation margin payments. Refer to the table below for more information.

(3) The foreign exchange contracts exclude foreign exchange spot contracts. The notional and net fair value amounts of these contracts were $377 million and $0 million, respectively, as of March 31, 2025, and $177 million and $0 million, respectively, as of December 31, 2024.

(4) Other derivative contracts not designated as hedging instruments include risk participation agreements and equity warrants.

The following table presents the impact of variation margin netting on derivative assets and liabilities:

Variation Margin Payments


dollars in millions	March 31, 2025				December 31, 2024
	Asset Fair Value		Liability Fair Value		Asset Fair Value		Liability Fair Value
Derivatives designated as hedging instruments (Qualifying hedges)
Gross fair value	$	22	$	—	$	15	$	—
Cleared trades, variation margin netting	(21)		—		(14)		—
Total derivatives designated as hedging instruments	$	1	$	—	$	1	$	—
Derivatives not designated as hedging instruments (Non-qualifying hedges)
Gross fair value	$	618	$	(572)	$	742	$	(647)
Cleared trades, variation margin netting	(66)		31		(83)		22
Total derivatives not designated as hedging instruments	$	552	$	(541)	$	659	$	(625)
Gross derivatives fair values presented in the Consolidated Balance Sheets	$	553	$	(541)	$	660	$	(625)
Amounts subject to master netting agreements (1)	(103)		103		(48)		48
Cash collateral pledged (received) subject to master netting agreements (2)	(328)		18		(539)		2
Total net derivative fair value	$	122	$	(420)	$	73	$	(575)

(1) BancShares’ derivative transactions are governed by International Swaps and Derivatives Association (“ISDA”) agreements that allow for net settlements of certain payments as well as offsetting of all contracts with a given counterparty in the event of bankruptcy or default of one of the two parties to the transaction. BancShares believes its ISDA agreements meet the definition of a master netting arrangement or similar agreement for purposes of the above disclosure.

(2) In conjunction with the ISDA agreements described above, BancShares has entered into collateral arrangements with its counterparties, which provide for the exchange of cash depending on the change in the market valuation of the derivative contracts outstanding. Such collateral is available to be applied in settlement of the net balances upon an event of default of one of the counterparties. Collateral pledged or received is included in other assets or deposits, respectively.

Fair Value Hedges

The following table presents the impact of fair value hedges recorded in interest expense on the Consolidated Statements of Income:

Recognized Gains (Losses) on Fair Value Hedges


dollars in millions		Three Months Ended March 31,
	Interest Expense	2025		2024
Gain (loss) on hedging instruments - time deposits	Deposits	$	—	$	—
Loss on hedging instruments - borrowings	Borrowings	—		(5)
Gain (loss) on hedged item - time deposits	Deposits	—		—
Gain on hedged item - borrowings	Borrowings	1		5

Net gain on fair value hedges	Total interest expense	$	1	$	—

The following table presents the carrying value of hedged items and associated cumulative hedging adjustment related to fair value hedges:

Carrying Value of Hedged Items


dollars in millions			Cumulative Fair Value Hedging Adjustment Included in the Carrying Value of Hedged Items
	Carrying Value of Hedged Items		Currently Designated		No Longer Designated
March 31, 2025

Long-term borrowings	$	441	$	1	$	—
Deposits	134		—		—
December 31, 2024
Long-term borrowings	795		2		—
Deposits	335		1		—

Cash Flow Hedges

The following table presents the pretax unrealized gain on hedging instruments in cash flow hedges, which are reported in other comprehensive income, and the pretax amount reclassified from accumulated other comprehensive income (“AOCI”) to earnings:

Unrealized Gain on Cash Flow Hedges


dollars in millions	Three Months Ended March 31,
	2025		2024
Other comprehensive income on cash flow hedge derivatives before reclassifications	$	12	$	—
Amounts reclassified from AOCI to earnings	(3)		—
Other comprehensive income on cash flow hedge derivatives	$	9	$	—

The following table presents other information for cash flow hedges:

Other Information for Cash Flow Hedges


dollars in millions	March 31, 2025		December 31, 2024
Unrealized gain on cash flow hedge derivatives reported in AOCI, net of income taxes	$	15	$	8

Estimate to be reclassified from AOCI to earnings during the next 12 months, net of income taxes (1)	$	7	$	7
Maximum number of months over which forecasted cash flows are hedged	28		24

(1) Reclassified amounts could differ from amounts actually recognized due to factors such as changes in interest rates, hedge de-designations and the addition of other hedges.

Non-Qualifying Hedges

The following table presents gains on non-qualifying hedges recognized on the Consolidated Statements of Income:

Gains (Losses) on Non-Qualifying Hedges


dollars in millions		Three Months Ended March 31,
	Amounts Recognized	2025		2024
Interest rate contracts	Other noninterest income	$	(1)	$	8
Foreign currency forward contracts	Other noninterest income	(19)		12
Other contracts	Other noninterest income	(1)		(1)
Total non-qualifying hedges - income statement impact		$	(21)	$	19

NOTE 11 — FAIR VALUE

Fair Value Hierarchy

BancShares measures certain financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels.

Assets and liabilities are recorded at fair value according to a fair value hierarchy comprised of three levels. The levels are based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The level within the fair value hierarchy for an asset or liability is based on the lowest level of input significant to the fair value measurement with Level 1 inputs considered highest and Level 3 inputs considered lowest. A brief description of each input level follows:

•Level 1 inputs are quoted prices in active markets for identical assets and liabilities.

•Level 2 inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices observable for the assets or liabilities and market corroborated inputs.

•Level 3 inputs are unobservable inputs for the asset or liability. These unobservable inputs and assumptions reflect the estimates market participants would use in pricing the asset or liability.

Assets and Liabilities Measured at Fair Value - Recurring Basis

The following table presents assets and liabilities measured at fair value on a recurring basis:

Assets and Liabilities Measured at Fair Value - Recurring Basis


dollars in millions	March 31, 2025
	Total		Level 1		Level 2		Level 3
Assets
Investment securities available for sale
U.S. Treasury	$	13,150	$	—	$	13,150	$	—
Government agency	69		—		69		—
Residential mortgage-backed securities	16,605		—		16,605		—
Commercial mortgage-backed securities	3,594		—		3,594		—
Corporate bonds	465		—		297		168
Municipal bonds	17		—		17		—

Total investment securities available for sale	$	33,900	$	—	$	33,732	$	168
Marketable equity securities	95		42		53		—
Loans held for sale	70		—		70		—
Loans	23		—		23		—
Derivative assets (1)


Total qualifying hedge assets	$	1	$	—	$	1	$	—
Interest rate contracts — non-qualifying hedges	$	428	$	—	$	425	$	3
Foreign exchange contracts — non-qualifying hedges	108		—		108		—
Other derivative contracts — non-qualifying hedges	16		—		—		16
Total non-qualifying hedge assets	$	552	$	—	$	533	$	19
Total derivative assets	$	553	$	—	$	534	$	19
Liabilities
Derivative liabilities (1)
Interest rate contracts — qualifying hedges	$	—	$	—	$	—	$	—

Interest rate contracts — non-qualifying hedges	$	433	$	—	$	433	$	—
Foreign exchange contracts — non-qualifying hedges	107		—		107		—
Other derivative contracts — non-qualifying hedges	1		—		—		1
Total non-qualifying hedge liabilities	$	541	$	—	$	540	$	1
Total derivative liabilities	$	541	$	—	$	540	$	1
(1) Derivative fair values include accrued interest.


dollars in millions	December 31, 2024
	Total		Level 1		Level 2		Level 3
Assets
Investment securities available for sale
U.S. Treasury	$	13,903	$	—	$	13,903	$	—
Government agency	77		—		77		—
Residential mortgage-backed securities	15,620		—		15,620		—
Commercial mortgage-backed securities	3,666		—		3,666		—
Corporate bonds	467		—		299		168
Municipal bonds	17		—		17		—

Total investment securities available for sale	$	33,750	$	—	$	33,582	$	168
Marketable equity securities	101		48		53		—
Loans held for sale	55		—		55		—
Derivative assets (1)

Total qualifying hedge assets	$	1	$	—	$	1	$	—
Interest rate contracts — non-qualifying hedges	$	491	$	—	$	490	$	1
Foreign exchange contracts — non-qualifying hedges	152		—		152		—
Other derivative contracts — non-qualifying hedges	16		—		—		16
Total non-qualifying hedge assets	$	659	$	—	$	642	$	17
Total derivative assets	$	660	$	—	$	643	$	17
Liabilities
Derivative liabilities (1)
Interest rate contracts — qualifying hedges	$	—	$	—	$	—	$	—

Interest rate contracts — non-qualifying hedges	$	516	$	—	$	516	$	—
Foreign exchange contracts — non-qualifying hedges	108		—		108		—
Other derivative contracts — non-qualifying hedges	1		—		—		1
Total non-qualifying hedge liabilities	$	625	$	—	$	624	$	1
Total derivative liabilities	$	625	$	—	$	624	$	1

(1) Derivative fair values include accrued interest.

The methods and assumptions used to estimate the fair value of each class of financial instruments measured at fair value on a recurring basis are as follows:

Investment securities available for sale. The fair value of U.S. Treasury, government agency, mortgage-backed securities, municipal bonds, and a portion of the corporate bonds are generally estimated using a third-party pricing service. To obtain an understanding of the processes and methodologies used, management reviews correspondence from the third-party pricing service. Management also performs a price variance analysis process to corroborate the reasonableness of prices. The third-party provider evaluates securities based on comparable investments with trades and market data and will utilize pricing models which use a variety of inputs, such as benchmark yields, reported trades, issuer spreads, benchmark securities, bids and offers as needed. These securities are generally classified as Level 2. The remaining corporate bonds held are generally measured at fair value based on indicative bids from broker-dealers using inputs that are not directly observable. These securities are classified as Level 3.

Marketable equity securities. Equity securities are measured at fair value using observable closing prices. The valuation also considers the amount of market activity by examining trade volume. Equity securities are classified as Level 1 if they are traded in an active market and as Level 2 if the observable closing price is from a less than active market.

Loans and Loans held for sale. Certain residential real estate loans originated for sale to investors are carried at fair value based on quoted market prices for similar types of loans, which are considered Level 2 inputs. In instances when loans are not sold and subsequently transferred to portfolio, accounting at fair value is continued.

Derivative Assets and Liabilities. Derivatives were valued using models that incorporate inputs depending on the type of derivative. Other than the fair value of equity warrants and credit derivatives, which were estimated using Level 3 inputs, most derivative instruments were valued using Level 2 inputs based on observed pricing for similar assets and liabilities and model-based valuation techniques for which all significant assumptions are observable in the market. Refer to Note 10—Derivative Financial Instruments for notional amounts and fair values.

The following tables summarize information about significant unobservable inputs related to BancShares’ categories of Level 3 financial assets and liabilities measured on a recurring basis:

Quantitative Information About Level 3 Fair Value Measurements - Recurring Basis


dollars in millions
Financial Instrument	Estimated Fair Value				Valuation Technique	Significant Unobservable Inputs
	March 31, 2025		December 31, 2024
Assets
Corporate bonds	$	168	$	168	Indicative bid provided by broker	Multiple factors, including but not limited to, current operations, financial condition, cash flows, and recently executed financing transactions related to the issuer.
Interest rate & other derivative — non-qualifying hedges	$	19	$	17	Internal valuation model	Multiple factors, including but not limited to, private company valuation, illiquidity discount, and estimated life of the instrument.
Liabilities
Interest rate & other derivative — non-qualifying hedges	$	1	$	1	Internal valuation model	Not material

The following table summarizes the changes in estimated fair value for all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3):

Changes in Estimated Fair Value of Level 3 Financial Assets and Liabilities - Recurring Basis


dollars in millions	Three Months Ended March 31, 2025						Three Months Ended March 31, 2024
	Corporate Bonds		Other Derivative Assets — Non-Qualifying		Other Derivative Liabilities — Non-Qualifying		Corporate Bonds		Other Derivative Assets — Non-Qualifying		Other Derivative Liabilities — Non-Qualifying
Beginning balance	$	168	$	17	$	1	$	157	$	7	$	1
Purchases	—		2		—		—		3		—
Changes in fair value included in earnings	—		1		—		—		—		—
Changes in fair value included in comprehensive income	—		—		—		4		—		—


Maturity and settlements	—		(1)		—		—		(1)		—
Ending balance	$	168	$	19	$	1	$	161	$	9	$	1

Fair Value Option

The following table summarizes the difference between the aggregate fair value and the unpaid principal balance (“UPB”) for residential mortgage loans originated for sale measured at fair value:

Aggregate Fair Value and UPB - Residential Mortgage Loans


dollars in millions	March 31, 2025						December 31, 2024
	Fair Value		Unpaid Principal Balance		Difference		Fair Value		Unpaid Principal Balance		Difference
Originated loans held for sale (1)	$	93	$	94	$	(1)	$	55	$	54	$	1

(1) Originated loans held for sale include loans held for sale and loans originated for sale but transferred to portfolio and held for investment.

BancShares has elected the fair value option for residential mortgage loans originated for sale. This election reduces certain timing differences in the Consolidated Statements of Income and better aligns with the management of the portfolio from a business perspective. The changes in fair value that were recorded as a component of other noninterest income were insignificant for the three months ended March 31, 2025 and 2024. Interest earned on originated loans held for sale is recorded within interest income on loans and leases in the Consolidated Statements of Income.

No originated loans held for sale were 90 or more days past due or on nonaccrual status as of March 31, 2025 or December 31, 2024.

Assets Measured at Estimated Fair Value on a Non-recurring Basis

Certain assets or liabilities are required to be measured at estimated fair value on a non-recurring basis subsequent to initial recognition. Generally, these adjustments are the result of lower of cost or fair value (“LOCOM”) or other impairment accounting. The following table presents carrying value of assets measured at estimated fair value on a non-recurring basis for which gains and losses have been recorded in the periods. The gains and losses reflect amounts recorded for the respective periods, regardless of whether the asset is still held at period end.

Assets Measured at Fair Value - Non-recurring Basis


dollars in millions	Fair Value Measurements
	Total		Level 1		Level 2		Level 3		Total Gains (Losses)
March 31, 2025
Assets held for sale - loans	$	23	$	—	$	—	$	23	$	(7)
Loans - collateral dependent loans	212		—		—		212		(55)
Other real estate owned	66		—		—		66		(8)

Total	$	301	$	—	$	—	$	301	$	(70)
December 31, 2024
Assets held for sale - loans	$	13	$	—	$	—	$	13	$	(7)
Loans - collateral dependent loans	388		—		—		388		(171)
Other real estate owned	16		—		—		16		6

Total	$	417	$	—	$	—	$	417	$	(172)

Certain other assets are adjusted to their fair value on a non-recurring basis, including certain loans, OREO, and goodwill, which are periodically tested for impairment. Most loans held for investment, deposits, and borrowings are not reported at fair value.

The methods and assumptions used to estimate the fair value of each class of financial instruments measured at fair value on a non-recurring basis are as follows:

Assets held for sale - loans. Loans held for investment subsequently transferred to held for sale are carried at the LOCOM. When available, the fair values for the transferred loans are based on quoted prices from the purchase commitments for the individual loans being transferred and are considered Level 1 inputs. The fair value of Level 2 assets was primarily estimated based on prices of recent trades of similar assets. For other loans held for sale, the fair value of Level 3 assets was primarily measured under the income approach using the discounted cash flow model based on Level 3 inputs including discount rate or the price of committed trades. Gains and losses are recorded in noninterest income.

Loans - collateral dependent loans. The population of Level 3 loans measured at fair value that are experiencing financial difficulty and measured on a non-recurring basis includes collateral-dependent loans evaluated individually. Collateral values are determined using appraisals or other third-party value estimates of the subject property discounted based on estimated selling costs, and adjustments for other external factors that may impact the marketability of the collateral. Gains and losses generally reflect the required net provision and charge-offs specific to the loans included in the population for the respective periods and are recorded in the provision for credit losses.

Other real estate owned. OREO is carried at LOCOM. OREO asset valuations are determined by using appraisals or other third-party value estimates of the subject property with discounts, generally between 7% and 10%, applied for estimated selling costs and other external factors that may impact the marketability of the property. At March 31, 2025 and December 31, 2024, the weighted average discount applied was 8.76% and 9.45%, respectively. Changes to the value of the assets between scheduled valuation dates are monitored through continued communication with brokers and monthly reviews by the asset manager assigned to each asset. If there are any significant changes in the market or the subject property, valuations are adjusted or new appraisals are ordered to ensure the reported values reflect the most current information.

Financial Instruments Fair Value

The table below presents the carrying values and estimated fair values for financial instruments, excluding leases and certain other assets and liabilities for which these disclosures are not required.

Carrying Values and Fair Values of Financial Assets and Liabilities


dollars in millions	March 31, 2025
			Estimated Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	812	$	812	$	—	$	—	$	812
Interest-earning deposits at banks	24,692		24,692		—		—		24,692
Securities purchased under agreements to resell	345		—		345		—		345
Investment in marketable equity securities	95		42		53		—		95
Investment securities available for sale	33,900		—		33,732		168		33,900
Investment securities held to maturity	10,324		—		8,973		—		8,973
Loans held for sale	183		—		70		115		185
Net loans	137,692		—		1,491		136,450		137,941
Accrued interest receivable	920		—		920		—		920
Federal Home Loan Bank stock	20		—		20		—		20
Mortgage servicing rights	28		—		—		46		46
Derivative assets - qualifying hedges	1		—		1		—		1
Derivative assets - non-qualifying hedges	552		—		533		19		552
Financial Liabilities
Deposits with no stated maturity	147,330		—		147,330		—		147,330
Time deposits	11,995		—		11,986		—		11,986
Credit balances of factoring clients	1,145		—		—		1,145		1,145
Securities sold under customer repurchase agreements	450		—		450		—		450

Long-term borrowings	37,920		—		37,714		—		37,714
Accrued interest payable	107		—		107		—		107
Derivative liabilities - qualifying hedges	—		—		—		—		—
Derivative liabilities - non-qualifying hedges	541		—		540		1		541

	December 31, 2024
			Estimated Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	814	$	814	$	—	$	—	$	814
Interest-earning deposits at banks	21,364		21,364		—		—		21,364
Securities purchased under agreements to resell	158		—		158		—		158
Investment in marketable equity securities	101		48		53		—		101
Investment securities available for sale	33,750		—		33,582		168		33,750
Investment securities held to maturity	10,239		—		8,702		—		8,702
Loans held for sale	82		—		55		27		82
Net loans	136,567		—		1,463		133,409		134,872
Accrued interest receivable	902		—		902		—		902
Federal Home Loan Bank stock	20		—		20		—		20
Mortgage servicing rights	27		—		—		47		47
Derivative assets - qualifying hedges	1		—		1		—		1
Derivative assets - non-qualifying hedges	659		—		642		17		659
Financial Liabilities
Deposits with no stated maturity	141,976		—		141,976		—		141,976
Time deposits	13,253		—		13,247		—		13,247
Credit balances of factoring clients	1,016		—		—		1,016		1,016
Securities sold under customer repurchase agreements	367		—		367		—		367

Long-term borrowings	36,669		—		36,220		—		36,220
Accrued interest payable	134		—		134		—		134
Derivative liabilities - qualifying hedges	—		—		—		—		—
Derivative liabilities - non-qualifying hedges	625		—		624		1		625

The methods and assumptions used to estimate the fair value of each class of financial instruments not discussed elsewhere are as follows:

Interest-earning Deposits at Banks. The carrying value of interest-earning deposits at banks approximates its fair value due to its short-term nature and is classified on the fair value hierarchy as Level 1. The balances at March 31, 2025 and December 31, 2024 included $213 million and $211 million, respectively, as a required minimum deposit under the Purchase Money Note.

Net loans. The carrying value of net loans is net of the ALLL. Loans are generally valued by discounting expected cash flows using market inputs with adjustments based on cohort level assumptions for certain loan types as well as internally developed estimates at a business segment level. Due to the significance of the unobservable market inputs and assumptions, as well as the absence of a liquid secondary market for most loans, these loans are classified as Level 3. Certain loans are measured based on observable market prices sourced from external data providers and classified as Level 2. Nonaccrual loans are written down and reported at their estimated recovery value, which approximates their fair value, and classified as Level 3.

Securities Purchased Under Agreements to Resell. The fair value of securities purchased under agreements to resell equal the carrying value due to the short term nature, generally overnight, and therefore present an insignificant risk of change in fair value due to changes in market interest rate, and classified as Level 2.

Investment securities held to maturity. BancShares’ portfolio of debt securities held to maturity consists of mortgage-backed securities issued by government agencies and government sponsored entities, U.S. Treasury notes, unsecured bonds issued by government agencies and government sponsored entities, and securities issued by the Supranational Entities & Multilateral Development Banks. We primarily use prices obtained from pricing services to determine the fair value of securities, which are Level 2 inputs.

FHLB stock. The carrying amount of FHLB stock is a reasonable estimate of fair value, as these securities are not readily marketable and are evaluated for impairment based on the ultimate recoverability of the par value. BancShares considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. BancShares investment in FHLB stock is ultimately recoverable at par. The inputs used in the fair value measurement for the FHLB stock are considered Level 2 inputs.

Mortgage servicing rights. The fair value of mortgage servicing rights (“MSRs”) is determined using a pooling methodology. Similar loans are pooled together and a model which relies on discount rates, estimates of prepayment rates and the weighted average cost to service the loans is used to determine the fair value. The inputs used in the fair value measurement for MSRs are considered Level 3 inputs.

Deposits. The estimated fair value of deposits with no stated maturity, such as demand deposit accounts, money market accounts, and savings accounts was the amount payable on demand at the reporting date. The fair value of time deposits was estimated based on a discounted cash flow technique using Level 2 inputs appropriate to the contractual maturity.

Credit balances of factoring clients. The impact of the time value of money from the unobservable discount rate for credit balances of factoring clients is inconsequential due to the short term nature of these balances, therefore, the fair value approximated carrying value, and the credit balances are classified as Level 3.

Short-term borrowed funds. The fair value of short-term borrowed funds, which includes repurchase agreements, approximates carrying value and are classified as Level 2.

Long-term borrowings. For certain long-term senior and subordinated unsecured borrowings, the fair values are sourced from a third-party pricing service. The fair values of other long-term borrowings are determined by discounting future cash flows using current interest rates for similar financial instruments. The inputs used in the fair value measurement for FHLB borrowings, senior and subordinated debentures, and other borrowings are classified as Level 2.

For all other financial assets and financial liabilities, the carrying value is a reasonable estimate of the fair value as of March 31, 2025 and December 31, 2024. The carrying value and fair value for these assets and liabilities are equivalent because they are relatively short-term in nature and there is no interest rate or credit risk that would cause the fair value to differ from the carrying value. Cash and due from banks is classified as Level 1. Accrued interest receivable and accrued interest payable are classified as Level 2.

NOTE 12 — STOCKHOLDERS' EQUITY

A roll forward of common stock activity is presented in the following table:

Number of Shares of Common Stock



	Common Stock Outstanding
	Class A	Class B
Common stock - December 31, 2024	12,712,436	1,005,185
Shares repurchased under authorized repurchase plan	(302,683)	—

Common stock - March 31, 2025	12,409,753	1,005,185

Common Stock

The Parent Company has Class A common stock and Class B common stock, each with a par value of $1. Class A common stockholders have one vote per share while Class B common stockholders have 16 votes per share.

Non-Cumulative Perpetual Preferred Stock

The following table summarizes BancShares’ non-cumulative perpetual preferred stock:

Preferred Stock


dollars in millions, except per share and par value data
Preferred Stock	Issuance Date	Earliest Redemption Date	Par Value		Shares Authorized, Issued and Outstanding	Liquidation Preference Per Share		Total Liquidation Preference		Dividend
Series A	March 12, 2020	March 15, 2025	$	0.01	345,000	$	1,000	$	345	5.375%
Series B(1)	January 3, 2022	January 4, 2027	0.01		325,000	1,000		325		SOFR + 3.972%
Series C	January 3, 2022	January 4, 2027	0.01		8,000,000	25		200		5.625%

(1) Upon conversion to SOFR in 2023, BancShares began paying a credit spread adjustment in addition to the stated dividend.

Dividends on BancShares Series A, B, and C preferred stock (together, “BancShares Preferred Stock”) will be paid when, as, and if declared by the Board of Directors of the Parent Company, or a duly authorized committee thereof, to the extent that the Parent Company has lawfully available funds to pay dividends. If declared, dividends with respect to the BancShares Preferred Stock will accrue and be payable quarterly in arrears on March 15, June 15, September 15, and December 15 of each year. Dividends on the BancShares Preferred Stock will not be cumulative. For further description of BancShares’ Preferred Stock, refer to Note 16—Stockholders’ Equity in the Notes to the Consolidated Financial Statements included in the 2024 Form 10-K.

NOTE 13 — ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following table details the components of AOCI:

Components of Accumulated Other Comprehensive Loss


dollars in millions	March 31, 2025						December 31, 2024
	Pretax		Income Taxes		Net of Income Taxes		Pretax		Income Taxes		Net of Income Taxes
Unrealized loss on securities available for sale	$	(440)	$	95	$	(345)	$	(762)	$	178	$	(584)
Unrealized loss on securities available for sale transferred to held to maturity	(6)		2		(4)		(6)		2		(4)
Defined benefit pension items	182		(47)		135		182		(47)		135

Unrealized gain on cash flow hedge derivatives	20		(5)		15		11		(3)		8
Total accumulated other comprehensive loss	$	(244)	$	45	$	(199)	$	(575)	$	130	$	(445)

The following table details the changes in the components of AOCI, net of income taxes:

Changes in Accumulated Other Comprehensive (Loss) Income by Component


dollars in millions	Unrealized loss on securities available for sale		Unrealized loss on securities available for sale transferred to held to maturity		Defined benefit pension items		Unrealized gain on cash flow hedge derivatives		Total accumulated other comprehensive loss
Balance as of December 31, 2024	$	(584)	$	(4)	$	135	$	8	$	(445)
AOCI activity before reclassifications	239		—		—		10		249
Amounts reclassified from AOCI to earnings	—		—		—		(3)		(3)
Other comprehensive income for the period	239		—		—		7		246
Balance as of March 31, 2025	$	(345)	$	(4)	$	135	$	15	$	(199)

Balance as of December 31, 2023	$	(577)	$	(5)	$	91	$	—	$	(491)


Other comprehensive loss for the period	(91)		—		—		—		(91)
Balance as of March 31, 2024	$	(668)	$	(5)	$	91	$	—	$	(582)

Other Comprehensive Income

The amounts included in the Consolidated Statements of Comprehensive Income are net of income taxes. The following table presents the pretax and after tax components of other comprehensive income:

Other Comprehensive Income (Loss) by Component


dollars in millions	Three Months Ended March 31,
	2025						2024
	Pretax		Income Taxes		Net of Income Taxes		Pretax		Income Taxes		Net of Income Taxes		Income Statement Line Items
Unrealized loss on securities available for sale:


Other comprehensive income (loss) on securities available for sale	$	322	$	(83)	$	239	$	(124)	$	33	$	(91)
















Unrealized gain on cash flow hedge derivatives:
AOCI activity before reclassifications	$	12	$	(2)	$	10	$	—	$	—	$	—
Amounts reclassified from AOCI to earnings	(3)		—		(3)		—		—		—		Interest and fees on loans
Other comprehensive income on cash flow hedge derivatives	$	9	$	(2)	$	7	$	—	$	—	$	—
Total other comprehensive income (loss)	$	331	$	(85)	$	246	$	(124)	$	33	$	(91)

NOTE 14 — EARNINGS PER COMMON SHARE

The following table sets forth the computation of the basic and diluted earnings per common share:

Earnings per Common Share


dollars in millions, except per share data	Three Months Ended March 31,
	2025		2024
Net income	$	483	$	731
Preferred stock dividends	15		15
Net income available to common stockholders	$	468	$	716
Weighted average common shares outstanding
Basic shares outstanding	13,575,231		14,533,302
Stock-based awards	—		3,140
Diluted shares outstanding	13,575,231		14,536,442
Earnings per common share
Basic	$	34.47	$	49.27
Diluted	$	34.47	$	49.26

NOTE 15 — INCOME TAXES

BancShares’ global effective income tax rates (“ETRs”) were 25.8% and 27.2% for the three months ended March 31, 2025 and 2024, respectively. The decrease in the ETR for the three months ended March 31, 2025 compared to 2024 was primarily due to a reduction in the state and local income tax rate.

The quarterly income tax expense is based on a projection of BancShares’ annual ETR. This annual ETR is applied to the year-to-date consolidated pretax income to determine the interim provision for income taxes before discrete items. The ETR each period is also impacted by a number of factors, including the relative mix of domestic and international earnings, effects of changes in enacted tax laws, adjustments to the valuation allowances, and discrete items. The currently forecasted ETR may vary from the actual year-end 2025 ETR due to the changes in these factors.

Uncertain Tax Benefits

BancShares’ recognizes tax benefits when it is more likely than not that the position will prevail, based solely on the technical merits under the tax law of the relevant jurisdiction. BancShares will recognize the tax benefit if the position meets this recognition threshold determined based on the largest amount of the benefit that is more than likely to be realized.

Deferred Tax Assets and Valuation Adjustments

BancShares’ ability to recognize deferred tax assets (“DTAs”) is evaluated on a quarterly basis to determine if there are any significant events that would affect our ability to utilize existing DTAs. If events are identified that affect our ability to utilize its DTAs, adjustments to the valuation allowance adjustments may be required.

NOTE 16 — EMPLOYEE BENEFIT PLANS

BancShares sponsors non-contributory defined benefit pension plans for its qualifying employees. The service cost component of net periodic benefit cost is included in salaries and wages, while all other non-service cost components are included in other noninterest expense.

The components of net periodic benefit cost are as follows:


	Three Months Ended March 31,
	2025		2024
Service cost	$	2	$	2
Interest cost	16		15
Expected return on assets	(24)		(23)


Net periodic benefit	$	(6)	$	(6)

NOTE 17 — SEGMENT INFORMATION

Effective January 1, 2025, we made changes to the composition of our reportable segments as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation, and the segment disclosures below for 2024 were recast to conform with those segment composition changes.

BancShares’ segments include the General Bank, the Commercial Bank, SVB Commercial, and Rail. All other financial information not included in the segments is reported in the Corporate section of the segment disclosures. We do not aggregate multiple operating segments into a reportable segment. Therefore, each of our operating segments are reportable segments.

Certain noninterest expenses are directly incurred by a segment, while others are not. Noninterest expenses not directly incurred by a segment are included in Corporate unless allocated to a segment (“Allocated Expenses”). Under our segment expense allocation methodology, Allocated Expenses increase noninterest expense of the applicable segment(s), with an offsetting decrease to Corporate noninterest expense. “All other noninterest expense” in the segment reporting tables below are presented net of Allocated Expenses, resulting in a reduction to expense (or “Contra Expense”) for Corporate.

General Bank

The General Bank segment delivers products and services to consumers and businesses through our extensive network of branches and various digital channels. We offer a full suite of deposit products, loans (primarily residential mortgages and business and commercial loans), cash management, private banking and wealth management, payment services, and treasury services. We offer conforming and jumbo residential mortgage loans throughout the United States that are primarily originated through branches and retail referrals, employee referrals, internet leads, direct marketing and a correspondent lending channel, as well as through our private banking service. Private banking and wealth management offers a customized suite of products and services to individuals and institutional clients, as well as private equity and venture capital professionals and executive leaders of the innovation companies they support, and premium wine clients. The General Bank segment offers brokerage, investment advisory, private stock loans, other secured and unsecured lending products and vineyard development loans, as well as planning-based financial strategies, family office, financial planning, tax planning and trust services. The General Bank segment also includes a community association bank channel that supports deposit, cash management and lending to homeowner associations and property management companies.

Revenue is primarily generated from interest earned on loans. Noninterest income is primarily generated from fees for banking and advisory services, including lending-related fees, most of BancShares’ income related to deposit fees and service charges, cardholder services, along with essentially all of the wealth management services income. We primarily originate loans by utilizing our branch network and industry referrals, as well as direct digital marketing efforts. We derive our SBA loans through a network of SBA originators. We periodically purchase loans on a whole-loan basis. We also invest in community development that supports the construction of affordable housing in our communities in line with our CRA initiatives.

Commercial Bank

The Commercial Bank segment provides a range of lending, leasing, capital markets, asset management, and other financial and advisory services, primarily to small and middle market companies in a wide range of industries, including energy, healthcare, technology media and telecommunications, asset-backed lending, capital finance, maritime, aerospace and defense, and sponsor finance. Loans offered are primarily senior secured loans collateralized by accounts receivable, inventory, machinery and equipment, transportation equipment, and/or intangibles, and are often used for working capital, plant expansion, acquisitions, or recapitalizations. These loans include revolving lines of credit and term loans and, depending on the nature of the collateral, may be referred to as collateral-backed loans, asset-based loans or cash flow loans. We provide senior secured loans to developers and other commercial real estate (“CRE”) professionals. Additionally, we provide small business loans and leases, including both capital and operating leases, through a highly automated credit approval, documentation and funding process.

We provide factoring, receivable management and secured financing to businesses that operate in several industries. These include apparel, textile, furniture, home furnishings, and consumer electronics. Factoring entails the assumption of credit risk with respect to trade accounts receivable arising from the sale of goods from our factoring clients to their customers that have been factored (i.e., sold or assigned to the factor). Our factoring clients, which are generally manufacturers or importers of goods, are the counterparties on factoring, financing or receivables purchasing agreements to sell trade receivables to us. Our factoring clients’ customers, which are generally retailers, are the account debtors and obligors on trade accounts receivable that have been factored.

Revenue is primarily generated from interest and fees on loans. Noninterest income is mostly generated from rental income on operating lease equipment, lending-related fees, including most of BancShares’ capital market fees, and other revenue from banking services. Rental income is generally influenced by the size of the operating lease portfolio. Noninterest income also includes all of the commissions earned on factoring-related activities. We derive most of our commercial lending business through direct marketing to borrowers, lessees, manufacturers, vendors, and distributors. We also utilize referrals as a source for commercial lending business. We may periodically buy participations or syndications of loans and lines of credit and purchase loans on a whole-loan basis.

Operating lease equipment is subject to depreciation expense over the useful life of the small and large ticket equipment, which is generally 3-10 years.

SVB Commercial

The SVB Commercial segment offers products and services to commercial clients and investors across stages, sectors and regions in the innovation ecosystem, as well as private equity and venture capital firms. The SVB Commercial segment provides solutions to the financial needs of commercial clients. Loan products consist of capital call lines of credit, investor dependent loans, cash flow dependent loans, and innovation C&I loans made primarily to technology, life science and healthcare companies.

Revenue is primarily generated from interest earned on loans. Noninterest income is mostly generated from fees, including essentially all of client investment fees and most of the international fees, and other revenue from lending-related activities and banking services.

Deposit products include business and analysis checking accounts, money market accounts, multi-currency accounts, bank accounts, sweep accounts, and positive pay services. Services are provided through online and mobile banking platforms as well as branch locations.

Rail

The Rail segment offers customized leasing and financing solutions on a fleet of railcars and locomotives to railroads and shippers throughout North America. Railcar types include covered hopper cars used to ship grain and agricultural products, plastic pellets, sand, and cement; tank cars for energy products and chemicals; gondolas for coal, steel coil and mill service products; open-top hopper cars for coal and aggregates; boxcars for paper and auto parts; and centerbeams and flat cars for lumber. Revenue is generated primarily from rental income on operating lease equipment, which is included in noninterest income, and to a lesser extent, gains on sale of leasing equipment. Rental income is generally influenced by the size of the operating lease portfolio, utilization of the railcars, re-pricing of equipment renewed upon lease maturities, and pricing on new leases. Re-pricing refers to the rental rate in the renewed equipment contract compared to the prior contract.

Operating lease equipment is subject to depreciation expense over the useful life of the rail equipment, which is generally longer in duration, 40-50 years. The Rail segment leases railcars, primarily pursuant to full-service lease contracts under which we, as lessor, are responsible for railcar maintenance and repair. Maintenance and other operating lease expenses relate to equipment ownership and leasing costs associated with the railcar portfolio and tend to be variable due to timing and the number of railcars coming on or off lease as well as asset condition.

Corporate

All other financial information not included in the segments is reported in Corporate. Corporate contains BancShares’ centralized treasury function, which manages the investment security portfolio, interest-earning deposits at banks and corporate/wholesale funding (e.g., borrowings, Direct Bank deposits and brokered deposits). Corporate deposits are primarily comprised of Direct Bank deposits.

Corporate includes interest income on investment securities and interest-earning deposits at banks; interest expense for borrowings, Direct Bank deposits, and brokered deposits; as well as funds transfer pricing allocations. Noninterest income includes gains or losses on sales of investment securities, fair value adjustments on marketable equity securities, and income from bank owned life insurance (“BOLI”). Personnel cost in Corporate includes the personnel costs not allocated to the operating segments. Corporate includes acquisition-related expenses and certain items related to accounting for business combinations, such as gains on acquisitions, Day 2 Provision for Credit Losses and discount accretion income for certain acquired loans. Corporate also includes the offsetting impacts of Allocated Expenses as discussed above.

Segment Results and Select Period End Balances

The following tables present the condensed income statements by segment and include the significant segment expenses and measure of segment profit or loss.


	Three Months Ended March 31, 2025
	General Bank		Commercial Bank		SVB Commercial		Rail		Corporate (1)		BancShares (2)
Net interest income (expense)	$	788	$	293	$	493	$	(52)	$	141	$	1,663
Rental income on operating lease equipment	—		56		—		214		—		270
All other noninterest income	164		69		132		2		(2)		365
Total noninterest income	164		125		132		216		(2)		635
Total revenue	952		418		625		164		139		2,298
Depreciation on operating lease equipment	—		44		—		54		—		98
Maintenance and other operating lease expenses	—		—		—		58		—		58
Personnel cost	214		72		114		8		410		818
Acquisition-related expenses	—		—		—		—		42		42
All other noninterest expense (3)	351		159		265		14		(312)		477
Total noninterest expense	565		275		379		134		140		1,493

Provision for credit losses	46		85		23		—		—		154
Income (loss) before income taxes	341		58		223		30		(1)		651
Income tax expense	88		15		57		8		—		168
Net income (loss)	$	253	$	43	$	166	$	22	$	(1)	$	483

Select Period End Balances
Loans and leases	$	64,847	$	38,631	$	37,818	$	62	$	—	$	141,358
Operating lease equipment, net	—		731		—		8,640		—		9,371

Deposits	74,309		2,994		37,020		12		44,990		159,325

(1) Corporate includes all other financial information that is not included in the reportable segments.
(2) In the segment reporting table above, there are no reconciling differences between BancShares and the aggregate of all reportable segments and Corporate.
(3) All other noninterest expense represents “other segment items” under ASC 280 and primarily includes Allocated Expenses, net occupancy expense, equipment expense, professional fees, third-party processing fees, FDIC insurance expense, marketing expense, and intangible amortization. All other noninterest expense is presented net of Allocated Expenses in the segment reporting table above, resulting in Contra Expense for Corporate as further discussed above.


dollars in millions	Three Months Ended March 31, 2024
	General Bank		Commercial Bank		SVB Commercial		Rail		Corporate (1)		BancShares (2)
Net interest income (expense)	$	684	$	300	$	523	$	(43)	$	353	$	1,817
Rental income on operating lease equipment	—		57		—		198		—		255
All other noninterest income	145		83		134		4		6		372
Total noninterest income	145		140		134		202		6		627
Total revenue	829		440		657		159		359		2,444
Depreciation on operating lease equipment	—		46		—		50		—		96
Maintenance and other operating lease expenses	—		—		—		45		—		45
Personnel cost	207		74		119		8		336		744
Acquisition-related expenses	—		—		—		—		58		58
All other noninterest expense (3)	321		140		247		14		(289)		433
Total noninterest expense	528		260		366		117		105		1,376

Provision for credit losses	21		20		23		—		—		64
Income before income taxes	280		160		268		42		254		1,004
Income tax expense	79		42		75		11		66		273
Net income	$	201	$	118	$	193	$	31	$	188	$	731

Select Period End Balances
Loans and leases	$	62,015	$	36,251	$	37,042	$	62	$	—	$	135,370
Operating lease equipment, net	—		763		—		8,048		—		8,811

Deposits	70,908		3,400		33,879		14		41,408		149,609

(1) Corporate includes all other financial information that is not included in the reportable segments.
(2) In the segment reporting table above, there are no reconciling differences between BancShares and the aggregate of all reportable segments and Corporate.
(3) All other noninterest expense represents “other segment items” under ASC 280 and primarily includes Allocated Expenses, net occupancy expense, equipment expense, professional fees, third-party processing fees, FDIC insurance expense, marketing expense, and intangible amortization. All other noninterest expense is presented net of Allocated Expenses in the segment reporting table above, resulting in Contra Expense for Corporate as further discussed above.

NOTE 18 — COMMITMENTS AND CONTINGENCIES

Commitments

To meet the financing needs of its customers, BancShares and its subsidiaries have financial instruments with off-balance sheet risk. These financial instruments involve elements of credit, interest rate or liquidity risk and include commitments to extend credit and standby letters of credit.

The accompanying table summarizes credit-related commitments and other purchase and funding commitments:


dollars in millions	March 31, 2025		December 31, 2024
Financing Commitments
Financing assets (excluding leases)	$	52,514	$	53,250
Letters of Credit
Standby letters of credit	2,305		2,188
Other letters of credit	99		103
Deferred Purchase Agreements	1,602		1,802
Purchase and Funding Commitments (1)	119		178

(1) BancShares’ purchase and funding commitments relate to the equipment leasing businesses’ commitments to fund Rail’s railcar manufacturer purchase and upgrade commitments.

Financing Commitments

Commitments to extend credit are legally binding agreements to lend to customers. These commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Established credit standards control the credit risk exposure associated with these commitments. In some cases, BancShares requires collateral be pledged to secure the commitment, including cash deposits, securities and other assets.

Financing commitments, referred to as loan commitments or lines of credit, primarily reflect BancShares’ agreements to lend to its customers, subject to the customers’ compliance with contractual obligations. At March 31, 2025 and December 31, 2024, substantially all undrawn financing commitments were senior facilities. Financing commitments also include $164 million and $79 million at March 31, 2025 and December 31, 2024, respectively, related to off-balance sheet commitments to fund equity investments. Commitments to fund equity investments are contingent on events that have yet to occur and may be subject to change.

As financing commitments may not be fully drawn, may expire unused, may be reduced or canceled at the customer’s request, and may require the customer to be in compliance with certain conditions, commitment amounts do not necessarily reflect actual future cash flow requirements.

The table above excludes uncommitted revolving credit facilities extended by Commercial Services to its clients for working capital purposes. In connection with these facilities, Commercial Services has the sole discretion throughout the duration of these facilities to determine the amount of credit that may be made available to its clients at any time and whether to honor any specific advance requests made by its clients under these credit facilities.

Letters of Credit

Standby letters of credit are commitments to pay the beneficiary thereof if drawn upon by the beneficiary upon satisfaction of the terms of the letter of credit. Those commitments are primarily issued to support public and private borrowing arrangements. To mitigate its risk, BancShares’ credit policies govern the issuance of standby letters of credit. The credit risk related to the issuance of these letters of credit is essentially the same as in extending loans to clients and, therefore, these letters of credit are collateralized when necessary. These financial instruments generate fees and involve, to varying degrees, elements of credit risk in excess of amounts recognized in the Consolidated Balance Sheets.

Deferred Purchase Agreements

A deferred purchase agreement (“DPA”) is provided in conjunction with factoring, whereby a client is provided with credit protection for trade receivables without purchasing the receivables. The trade receivables terms generally require payment in 90 days or less. If the client’s customer is unable to pay an undisputed receivable solely as the result of credit risk, BancShares is then required to purchase the receivable from the client, less any borrowings for such client based on such defaulted receivable. The outstanding amount in the table above, less $145 million and $166 million at March 31, 2025 and December 31, 2024, respectively, of borrowings for such clients, is the maximum amount that BancShares would be required to pay under all DPAs. This maximum amount would only occur if all receivables subject to DPAs default in the manner described above, thereby requiring BancShares to purchase all such receivables from the DPA clients.

The table above includes $1.57 billion and $1.74 billion of DPA exposures at March 31, 2025 and December 31, 2024, respectively, related to receivables on which BancShares has assumed the credit risk. The table also includes $36 million and $59 million available under DPA credit line agreements provided at March 31, 2025 and December 31, 2024, respectively. The DPA credit line agreements specify a contractually committed amount of DPA credit protection and are cancellable by us only after a notice period, which is typically 90 days or less.

Litigation and Other Contingencies

The Parent Company and certain of its subsidiaries have been named as a defendant in legal actions arising from its normal business activities in which damages in various amounts are claimed. BancShares is also exposed to litigation risk relating to the prior business activities of banks from which assets were acquired and liabilities assumed.

BancShares is involved, and from time to time in the future may be involved, in a number of pending and threatened judicial, regulatory, and arbitration proceedings as well as proceedings, investigations, examinations and other actions brought or considered by governmental and self-regulatory agencies. These matters arise in connection with the ordinary conduct of BancShares’ business. At any given time, BancShares may also be in the process of responding to subpoenas, requests for documents, data and testimony relating to such matters and engaging in discussions to resolve the matters (all of the foregoing collectively being referred to as “Litigation”). While most Litigation relates to individual claims, BancShares may be subject to putative class action claims and similar broader claims and indemnification obligations.

In light of the inherent difficulty of predicting the outcome of Litigation matters and indemnification obligations, particularly when such matters are in their early stages or where the claimants seek indeterminate damages, BancShares cannot state with confidence what the eventual outcome of the pending Litigation will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines, or penalties related to each pending matter will be, if any. In accordance with applicable accounting guidance, BancShares’ establishes reserves for Litigation when those matters present loss contingencies as to which it is both probable that a loss will occur and the amount of such loss can reasonably be estimated. Based on currently available information, BancShares does not believe that the outcome of Litigation that is currently pending will have a material impact on BancShares’ consolidated financial statements. The actual results of resolving such matters may be substantially higher than the amounts reserved.

For certain Litigation matters in which BancShares is involved, BancShares is able to estimate a range of reasonably possible losses in excess of established reserves and insurance. For other matters for which a loss is probable or reasonably possible, such an estimate cannot be determined. For Litigation and other matters where losses are reasonably possible, management currently estimates an aggregate range of reasonably possible losses of up to $10 million in excess of any established reserves and any insurance we reasonably believe we will collect related to those matters. This estimate represents reasonably possible losses (in excess of established reserves and insurance) over the life of such Litigation, which may span a currently indeterminable number of years, and is based on information currently available as of March 31, 2025. The Litigation matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate.

Those Litigation matters for which an estimate is not reasonably possible or as to which a loss does not appear to be reasonably possible, based on current information, are not included within this estimated range and, therefore, this estimated range does not represent BancShares’ maximum loss exposure.

The foregoing statements about BancShares’ Litigation are based on BancShares’ judgments, assumptions, and estimates and are necessarily subjective and uncertain. In the event of unexpected future developments, it is possible that the ultimate resolution of these cases, matters, and proceedings, if unfavorable, may be material to BancShares’ consolidated financial position in a particular period.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s discussion and analysis (“MD&A”) of earnings and related financial data is presented to assist in understanding the financial condition and results of operations of First Citizens BancShares, Inc. (the “Parent Company” and, when including all of its subsidiaries on a consolidated basis, “we,” “us,” “our,” or “BancShares”) and its banking subsidiary, First-Citizens Bank & Trust Company (“FCB”). Unless otherwise noted, the terms “we,” “us,” “our,” and “BancShares” in this section refer to the consolidated financial position and consolidated results of operations for BancShares.

This MD&A is expected to provide our investors with a view of our financial condition and results of operations from our management’s perspective. This MD&A should be read in conjunction with the unaudited consolidated financial statements and related notes presented within this Quarterly Report on Form 10-Q (this “Form 10-Q”), along with our consolidated financial statements and related MD&A of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”). Throughout this MD&A, references to a specific “Note” refer to Notes to the Unaudited Consolidated Financial Statements in Item 1. Financial Statements.

Intercompany accounts and transactions have been eliminated. Although certain amounts for prior years have been reclassified to conform with financial statement presentations for 2025, the reclassifications had no effect on stockholders’ equity or net income as previously reported. Refer to Note 1—Significant Accounting Policies and Basis of Presentation.

Management uses certain financial measures that are not presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) in its analysis of the financial condition and results of operations of BancShares. Refer to the "Non-GAAP Financial Measurements" section of this MD&A for a reconciliation of these financial measures to the most directly comparable financial measures in accordance with GAAP.

EXECUTIVE OVERVIEW

The Parent Company is a bank holding company (“BHC”) and financial holding company. The Parent Company is regulated by the Board of Governors of the Federal Reserve System (“Federal Reserve”) under the U.S. Bank Holding Company Act of 1956, as amended. The Parent Company is also registered under the BHC laws of North Carolina and is subject to supervision, regulation and examination by the North Carolina Office of the Commissioner of Banks (the “NCCOB”). BancShares conducts its banking operations through its wholly owned subsidiary, FCB, a state-chartered bank organized under the laws of the state of North Carolina. FCB is regulated by the NCCOB. In addition, FCB, as an insured depository institution, is supervised by the Federal Deposit Insurance Corporation (the “FDIC”).

BancShares provides financial services for a wide range of consumer and commercial clients. This includes retail and mortgage banking, wealth management, small and middle market banking, factoring and leasing. BancShares provides commercial factoring, receivables management and secured financing services to businesses (generally manufacturers or importers of goods) that operate in various industries, including apparel, textile, furniture, home furnishings and consumer electronics. BancShares also provides deposit, cash management and lending to homeowner associations and property management companies. BancShares also owns a fleet of railcars and locomotives that are leased to railroads and shippers.

BancShares delivers banking products and services to its customers through an extensive branch network and additionally operates a nationwide digital banking platform that delivers deposit products to consumers (the “Direct Bank”). Services offered at most branches include accepting deposits, cashing checks and providing for consumer and commercial cash needs. Consumer and business customers may also conduct banking transactions through various digital channels.

In addition to our banking operations, we provide various investment products and services through FCB’s wholly owned subsidiaries, including First Citizens Investor Services, Inc. (“FCIS”) and First Citizens Asset Management, Inc. (“FCAM”), and a non-bank subsidiary First Citizens Capital Securities, LLC (“FCCS”). As a registered broker-dealer, FCIS provides a full range of investment products, including annuities, brokerage services and third-party mutual funds. As registered investment advisers, FCIS and FCAM provide investment management services and advice. FCCS is a broker-dealer that also provides underwriting and private placement services. We also have other wholly owned subsidiaries, including SVB Wealth LLC, SVB Asset Management, and First Citizens Institutional Asset Management, LLC, which are active investment advisers.

Refer to Note 17—Segment Information for further information regarding the products and services we provide.

Refer to the 2024 Form 10-K for a discussion of our strategy.

Recent Events

Debt Issuances

Termination of the Shared-Loss Agreement with the FDIC

On April 7, 2025, FCB and the FDIC entered into an agreement (the “Shared-Loss Termination Agreement”) to terminate the Shared-Loss Agreement (as defined in Note 2—Business Combinations). As a result of entering into the Shared-Loss Termination Agreement, all rights and obligations of the parties under the Shared-Loss Agreement terminated as of the date of the Shared-Loss Termination Agreement, including FCB’s reporting covenants and obligations related to FDIC Loss Sharing and FCB reimbursement (each as defined in Note 2—Business Combinations). The decision to enter into the Shared-Loss Termination Agreement was motivated, in part, by FCB’s determination that the likelihood of reaching the $5 billion loss threshold during the five-year period covered by the Shared Loss Agreement was remote. Additionally, the Termination Agreement eliminated the reporting responsibilities associated with the Shared-Loss Agreement. There was no impact to our consolidated balance sheets or statements of income resulting from the Shared-Loss Termination Agreement because there was no loss indemnification asset or true-up liability associated with the Shared-Loss Agreement, primarily based on evaluation of historical loss experience and the credit quality of the Covered Assets (as defined in Note 2—Business Combinations).

The risk-based capital ratio impacts resulting from the Shared-Loss Termination Agreement are discussed in the “Capital” section of this MD&A.

Share Repurchase Program

On July 25, 2024, BancShares announced that the Board of Directors (the “Board”) authorized a share repurchase plan (the “SRP”), which allows BancShares to repurchase shares of its Class A common stock in an aggregate amount up to $3.50 billion through 2025.

During the first quarter of 2025, we repurchased 302,683 shares of our Class A common stock for approximately $613 million. Shares repurchased during the first quarter of 2025 represented 2.38% of Class A common shares and 2.21% of total Class A and Class B common shares outstanding at December 31, 2024. From inception of the SRP through March 31, 2025, we have repurchased 1,117,324 shares of our Class A common stock for approximately $2.28 billion, representing 8.26% of Class A common shares and 7.69% of total Class A and Class B common shares outstanding as of June 30, 2024. The total capacity remaining under the SRP was $1.22 billion as of March 31, 2025. Subsequent to March 31, 2025, BancShares purchased an additional 120,558 shares of Class A common stock through April 30, 2025.

Refer to Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds for additional information regarding monthly repurchase activity during the first quarter of 2025.

Changes to the Composition of Reportable Segments

We updated our segment reporting during the first quarter of 2025 as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation. We transferred certain components from the SVB Commercial and General Bank segments to the Commercial Bank segment and modified our segment expense allocation methodology. Segment disclosures for 2024 periods included in this Form 10-Q were recast to reflect the segment reporting updates. Refer to Note 17—Segment Information for descriptions of segment products and services and “Results by Segment” in this MD&A.

Recent Economic, Industry and Regulatory Developments

Entering 2025, the Federal Open Market Committee (“FOMC”) had reduced the benchmark federal funds rate to a range between 4.25% - 4.50% and cautioned that reductions in 2025 may be fewer than initially expected due to continued inflation pressure. As such, the FOMC maintained the range for the benchmark federal funds rate at its January and March 2025 meetings.

The Trump administration has imposed, modified and paused tariffs multiple times since the beginning of 2025. Actual and threatened changes to U.S. trade policies have resulted in some countries enacting retaliatory measures. The imposition of increased tariffs and trade restrictions has contributed to uncertainty and volatility in the global financial markets. The current tariff environment is dynamic, and we are closely monitoring both the impact and potential impact of such measures on our business, our customers and on overall economic conditions in the United States.

Financial Performance Summary

The following tables in this MD&A include financial data for the three months ended March 31, 2025 (the “Current Quarter”), December 31, 2024 (the “Linked Quarter”) and March 31, 2024 (the “Prior Year Quarter”). In accordance with Item 303(c) of Regulation S-K, we focus on changes compared to the Linked Quarter for the narrative discussion and analysis of our results of operations as we believe this provides investors and other users of our data with the most relevant information.

We focus the discussion of our financial position by comparing balances as of March 31, 2025 to December 31, 2024.

The following table summarizes BancShares’ results:

Table 1

Selected Financial Data


dollars in millions, except share data	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
Results of Operations:
Interest income	$	2,895		$	3,001		$	3,084
Interest expense	1,232			1,292			1,267
Net interest income	1,663			1,709			1,817
Provision for credit losses	154			155			64
Net interest income after provision for credit losses	1,509			1,554			1,753
Noninterest income	635			699			627
Noninterest expense	1,493			1,517			1,376
Income before income taxes	651			736			1,004
Income tax expense	168			36			273
Net income	483			700			731
Preferred stock dividends	15			15			15
Net income available to common stockholders	$	468		$	685		$	716

Per Common Share Information:
Weighted average common shares outstanding (diluted)	13,575,231			13,927,887			14,536,442
Diluted earnings per common share	$	34.47		$	49.21		$	49.26

Key Performance Metrics:
Return on average assets	0.87		%	1.25		%	1.36		%
Net interest margin (1)	3.26			3.32			3.67
Net interest margin, excluding purchase accounting accretion or amortization (1)(2)	3.12			3.16			3.35

Select Average Balances:
Investment securities	$	43,555		$	40,779		$	32,647
Total loans and leases (3)	140,882			139,757			133,758
Operating lease equipment, net	9,350			9,288			8,806
Total assets	225,449			223,706			216,081
Total deposits	156,378			154,534			147,715
Total borrowings	37,398			37,092			37,577
Total stockholders’ equity	22,457			22,598			21,498

Select Ending Balances:
Investment securities	$	44,319		$	44,090		$	35,044
Total loans and leases	141,358			140,221			135,370
Operating lease equipment, net	9,371			9,323			8,811
Total assets	228,822			223,720			217,836
Total deposits	159,325			155,229			149,609
Total borrowings	38,406			37,051			37,540
Total stockholders’ equity	22,295			22,228			21,848
Loan to deposit ratio	88.72		%	90.33		%	90.48		%
Noninterest-bearing deposits to total deposits	25.59			24.89			26.25

Capital Ratios:
Total risk-based capital	15.23		%	15.04		%	15.66		%
Tier 1 risk-based capital	13.35			13.53			14.00
Common equity Tier 1	12.81			12.99			13.44
Tier 1 leverage	9.75			9.90			10.11

Asset Quality:
Ratio of nonaccrual loans to total loans	0.85		%	0.84		%	0.79		%
Allowance for loan and lease losses to loans ratio	1.19			1.20			1.28
Net charge off ratio	0.41			0.46			0.31

(1) Calculated net of average credit balances and deposits of factoring clients.

(2) Net interest margin (“NIM”), excluding purchase accounting accretion or amortization (“PAA”), is a non-GAAP financial measure. Refer to the “NII, NIM, and Interest and Fees on Loans, Excluding PAA” discussion in the “Non-GAAP Financial Measurements” section of this MD&A for a reconciliation from the most comparable GAAP measure to the non-GAAP measure.

(3) Average loan balances include loans held for sale and nonaccrual loans.

Financial highlights are summarized below. Further details are discussed in the “Results of Operations” and “Balance Sheet Analysis” sections of this MD&A.

Income Statement Highlights

•Net income for the Current Quarter was $483 million, a decrease of $217 million or 31% from $700 million for the Linked Quarter. Net income available to common stockholders for the Current Quarter was $468 million, a decrease of $217 million or 32% from $685 million for the Linked Quarter. Earnings per basic and diluted common share for the Current Quarter was $34.47, a decrease from $49.21 for the Linked Quarter. The decrease in net income available to common stockholders was largely due to an increase in income tax expense of $132 million as further described below.

•Select items in the Current Quarter and Linked Quarter included acquisition-related expenses of $42 million and $62 million, respectively.

•Net Interest Income (“NII”) for the Current Quarter was $1.66 billion, a decrease of $46 million or 3% from $1.71 billion for the Linked Quarter. NIM for the Current Quarter was 3.26%, a decrease of 6 basis points (“bps”) from 3.32% for the Linked Quarter. The decreases in NII and NIM were mainly due to a decline in the yield on interest-earning assets, a mix shift from interest-earning deposits at banks to investment securities, and an increase in average interest-bearing deposits, partially offset by a decline in the cost of interest-bearing deposits and an increase in average loans.

◦PAA for the Current Quarter was $75 million, a decrease of $7 million from $82 million for the Linked Quarter. NIM, excluding PAA,(1) for the Current Quarter was 3.12%, a decrease of 4 bps from 3.16% for the Linked Quarter.

•Noninterest income for the Current Quarter was $635 million, a decrease of $64 million or 9% from $699 million for the Linked Quarter. The decrease was largely the result of a decline in other noninterest income of $36 million, mainly attributable to the negative impacts from fair value changes in customer derivative positions driven by changes in the rate environment, as well as the write-down of a held for sale asset. The remaining net decrease included a decline in the fair value adjustment on marketable equity securities of $15 million, as well as declines in gains on sales of loans, leasing equipment and marketable equity securities totaling $16 million, partially offset by an increase in wealth management services of $2 million.

•Noninterest expense for the Current Quarter was $1.49 billion, a decrease of $24 million or 2% from $1.52 billion for the Linked Quarter. The decrease was mostly due to a decline in acquisition-related expenses of $20 million and a decline in other noninterest expense of $32 million, reflecting decreases in non-income taxes and donations to support relief efforts for recent natural disasters, partially offset by an increase in personnel cost of $17 million.

•Provision for credit losses for the Current Quarter was $154 million, a decrease of $1 million from $155 million for the Linked Quarter.

◦The provision for loan and lease losses for the Current Quarter was $148 million, a decrease of $10 million from $158 million for the Linked Quarter, mainly attributable to a decrease in net charge-offs of $16 million, partially offset by the impact of a $4 million reserve build in the Current Quarter compared to a $2 million reserve release in the Linked Quarter as discussed below in the “Balance Sheet Highlights.”

◦The provision for off-balance sheet credit exposure for the Current Quarter was $6 million, an increase of $9 million compared to a benefit of $3 million for the Linked Quarter, mostly due to an increase in off-balance sheet credit exposure and modest deterioration in the macroeconomic forecast.

•Income tax expense for the Current Quarter was $168 million, an increase of $132 million from $36 million for the Linked Quarter. The Linked Quarter included a decrease in income tax expense due to a decline in the state tax rate applied. The tax rate applied in the Linked Quarter declined after we filed our first income tax returns that included the SVBB Acquisition (as defined in Note 2—Business Combinations).

•Return on average assets for the Current Quarter was 0.87%, a decrease of 38 bps from 1.25% for the Linked Quarter, mainly attributable to higher income tax expense.

(1) NIM, excluding PAA is a non-GAAP measure. Refer to the “NII, NIM, and Interest and Fees on Loans, Excluding PAA” discussion in the “Non-GAAP Financial Measurements” section of this MD&A for further discussion.

Balance Sheet Highlights

•Loans and leases at March 31, 2025 were $141.36 billion, an increase of $1.14 billion or 1% from $140.22 billion at December 31, 2024. Loan growth in the Commercial Bank segment of $733 million was mainly in our industry verticals, primarily technology media and telecommunications (“TMT”) and healthcare. Loan growth in the SVB Commercial segment of $444 million was concentrated in the global fund banking portfolio, partially offset by declines in our investor dependent portfolio. Loans in the General Bank segment slightly declined by $40 million, reflecting a decline in the Branch Network, partially offset by loan growth in Wealth.

•Allowance for loan and lease losses (“ALLL”) at March 31, 2025 was $1.68 billion, an increase of $4 million from December 31, 2024, primarily due to modest deterioration in the macroeconomic forecast, as well as increases in loan volume, partially offset by the result of a mix shift from the investor dependent portfolio to the global fund banking portfolio, which has a lower loss rate relative to our other loan portfolios, and lower specific reserves for individually evaluated loans. The reserve release in the Linked Quarter was primarily due to lower specific reserves, partially offset by increases in loan volume. The ALLL as a percentage of loans was 1.19% at March 31, 2025, a decrease of 1 bp from 1.20% at December 31, 2024.

•Investment securities at March 31, 2025 were $44.32 billion, an increase of $229 million or 1% from $44.09 billion at December 31, 2024, primarily due to purchases of short-duration available for sale U.S. agency mortgage-backed and U.S. Treasury investment securities, partially offset by paydowns, maturities, and sales.

•Deposits at March 31, 2025 were $159.33 billion, an increase of $4.10 billion or 3% from $155.23 billion at December 31, 2024, mainly attributable to deposit growth of $3.1 billion in the Direct Bank in Corporate, $1.4 billion in our Branch Network in the General Bank segment, and $496 million in the SVB Commercial segment, partially offset by a decline of $508 million in the Commercial Bank segment. The remaining decrease in deposits was attributable to declines in other deposits in Corporate and the Rail segment.

•Borrowings at March 31, 2025 were $38.41 billion, an increase of $1.36 billion or 4% from $37.05 billion at December 31, 2024, primarily due to the Current Quarter Debt Issuances with aggregate principal amounts totaling $1.25 billion as further discussed above in the “Recent Events” section of this MD&A.

•At March 31, 2025, BancShares remained well capitalized with a total risk-based capital ratio of 15.23%, a Tier 1 risk-based capital ratio of 13.35%, a common equity Tier 1 (“CET1”) ratio of 12.81% and a Tier 1 leverage ratio of 9.75%.

Funding, Liquidity and Capital Overview

Deposit Composition and Trends

We fund our business primarily through deposits. Deposits represented approximately 81% of total funding at March 31, 2025. The following table summarizes the composition, average size and uninsured percentages of our deposits:

Table 2

Select Deposit Data


	Deposits as of March 31, 2025
	Ending Balance (in millions)		Average Size (in thousands)		Uninsured %
General Bank segment	$	74,309	$	36	33	%
Commercial Bank segment	2,994		255		83
SVB Commercial segment	37,020		522		69
Corporate and Rail segment(1)	45,002		59		12
Total	$	159,325	55		36

(1) The average size is reflective of the Direct Bank deposits and excludes brokered deposits and rail.

The General Bank segment mainly includes deposits in our Branch Network, which deploys a relationship-based approach to deposit gathering. The Commercial Bank segment includes deposits of commercial customers, and the SVB Commercial segment includes deposits related to its commercial customer base. Deposits in Corporate mainly included $44.17 billion in our Direct Bank, with the balance including brokered and other deposits.

As displayed in the table above, the average size of deposits varies across our business segments. The uninsured percentage is the percentage of uninsured deposits to total deposits at period end for the respective segments and Corporate. Total uninsured deposits were approximately $58.06 billion or 36% of total deposits at March 31, 2025 and $59.51 billion or 38% at December 31, 2024.

Table 3

Deposit Trends


dollars in millions	Deposit Balance

	March 31, 2025		December 31, 2024
General Bank segment	$	74,309	$	72,956
Commercial Bank segment	2,994		3,502
SVB Commercial segment	37,020		36,524
Corporate and Rail segment	45,002		42,247
Total deposits	$	159,325	$	155,229

From December 31, 2024 to March 31, 2025, deposits in Corporate and the General Bank segment increased, primarily due to deposit growth in the Direct Bank and our Branch Network, respectively. SVB Commercial segment deposits increased despite the strategic decision to move $2.4 billion in select cash sweep deposits to off-balance sheet client funds during the Current Quarter. The net increase in SVB Commercial segment deposits was mainly due to growth in savings, noninterest-bearing, and money market deposits, partially offset by declines in interest-bearing checking and time deposits. Deposits in the Commercial Bank segment decreased, mostly due to a decline in noninterest-bearing deposits. Refer to the “Interest-bearing Liabilities—Deposits” section in this MD&A for additional information on deposits.

Liquidity Position

We strive to maintain a strong liquidity position and our risk appetite for liquidity is low. At March 31, 2025, we had $62.79 billion in high-quality liquid assets consisting of $23.77 billion in cash and interest-earning deposits at banks (primarily held at the Federal Reserve Bank (“FRB”)) and $39.02 billion in high-quality liquid securities (“HQLS”). HQLS is mainly composed of U.S. agency mortgage-backed and U.S. Treasury investment securities. Additionally, we have unused borrowing capacity with the Federal Home Loan Bank (“FHLB”) and FRB of $16.54 billion and $5.61 billion, respectively.

In connection with the SVBB Acquisition, FCB and the FDIC, as lender and as collateral agent, entered into the Advance Facility Agreement (as defined and described in Note 2—Business Combinations). The draw period under the Advance Facility Agreement ended March 27, 2025, as of which date, FCB had no outstanding amounts under the facility. We are actively working to increase our borrowing capacity under agreements with the FRB through expansion of the eligible loan population to targeted loans historically not pledged to the FRB. Refer to the “Liquidity Risk” section of this MD&A for further discussion.

In connection with the SVBB Acquisition, FCB issued a five-year, 3.50% fixed rate Purchase Money Note (as defined in Note 2—Business Combinations), which had a carrying value of $35.83 billion at March 31, 2025. 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.

Investment Securities Duration

At March 31, 2025, our investment securities portfolio primarily consisted of debt securities available for sale and held to maturity as summarized below. We manage debt security market risk by monitoring the average duration of our investment securities portfolio. The duration of our investment securities was approximately 2.7 years at March 31, 2025. The investment securities available for sale portfolio had an average duration of 2.3 years and the held to maturity portfolio had an average duration of 4.3 years. Refer to the “Interest-earning Assets—Investment Securities” section of this MD&A and Note 3—Investment Securities for further information.

Table 4

Investment Securities


dollars in millions	March 31, 2025
	Composition(1)		Amortized Cost		Fair Value		Fair Value to Amortized Cost
Total investment securities available for sale	78.9	%	$	34,340	$	33,900	98.7	%
Total investment securities held to maturity	20.9		10,324		8,973		86.9
Investment in marketable equity securities	0.2		78		95		121.8
Total investment securities	100	%	$	44,742	$	42,968
(1) Calculated as a percentage of the total fair value of investment securities.

Capital Position

At March 31, 2025, all regulatory capital ratios for BancShares and FCB significantly exceeded the Prompt Corrective Action (“PCA”) well capitalized thresholds and Basel III requirements as further discussed in the “Capital” section of this MD&A.

RESULTS OF OPERATIONS

Net Interest Income and Net Interest Margin

NII is affected by changes in interest rates and changes in the amount and composition of interest-earning assets and interest-bearing liabilities. Interest income and expense and the respective yields and rates include amortization of premiums, accretion of discounts, and impacts from hedging activities.

The following tables present the average balances of interest-earning assets and interest-bearing liabilities with the associated yields and rates, interest income and expense, and changes therein due to changes in volume and yields or rates. Changes in interest income and expense due to changes in (i) volume (average balances of interest-earning assets and interest-bearing liabilities) and (ii) yields or rates are based on the following:

•The change in NII due to volume is calculated as the change in average balance multiplied by the yield or rate from the prior period.

•The change in NII due to yield or rate is calculated as the change in yield or rate multiplied by the average balance from the prior period.

•The change in NII due to changes in both volume and yield or rate (i.e., portfolio mix) is calculated as the change in rate multiplied by the change in volume. This component is allocated between the changes due to volume and yield or rate based on the ratio each component bears to the absolute dollar amounts of their total.

•Tax equivalent NII was not materially different from NII, therefore we present NII in our analysis.

Table 5

Average Balances, Yields and Rates, NII, and NIM (Current Quarter to Linked Quarter)


dollars in millions	Average Balance								Yield / Rate					Interest Income / Expense
	Three Months Ended				Increase (Decrease)				Three Months Ended					Three Months Ended						Increase (Decrease) due to:
	Mar 31, 2025		Dec 31, 2024						Mar 31, 2025		Dec 31, 2024		Increase (decrease) bps	Mar 31, 2025		Dec 31, 2024		Increase (Decrease)		Volume(1)		Yield /Rate(1)
Loans and leases(1)(2)	$	139,491	$	138,186	$	1,305	1	%	6.49	%	6.69	%	(20)	$	2,236	$	2,322	$	(86)	$	11	$	(97)
Investment securities	43,555		40,779		2,776		7		3.79		3.66		13	411		374		37		24		13
Securities purchased under agreements to resell	283		266		17		6		4.37		4.67		(30)	3		3		—		—		—
Interest-earning deposits at banks	22,699		25,548		(2,849)		(11)		4.38		4.70		(32)	245		302		(57)		(35)		(22)
Total interest-earning assets(2)	$	206,028	$	204,779	$	1,249	1		5.68		5.83		(15)	$	2,895	$	3,001	$	(106)	$	—	$	(106)

Noninterest-earning assets	19,421		18,927		494		3
Total assets	$	225,449	$	223,706	$	1,743	1

Interest-bearing deposits
Checking with interest	$	23,931	$	24,460	$	(529)	(2)	%	1.77	%	2.04	%	(27)	$	104	$	125	$	(21)	$	(3)	$	(18)
Money market	36,760		35,319		1,441		4		2.83		3.05		(22)	257		271		(14)		9		(23)
Savings	43,918		41,103		2,815		7		3.85		4.07		(22)	417		421		(4)		22		(26)
Time deposits	12,615		13,683		(1,068)		(8)		3.71		4.07		(36)	115		140		(25)		(12)		(13)
Total interest-bearing deposits	117,224		114,565		2,659		2		3.09		3.32		(23)	893		957		(64)		16		(80)
Borrowings:


Securities sold under customer repurchase agreements	428		370		58		16		0.52		0.57		(5)	1		1		—		—		—

Senior unsecured borrowings	169		59		110		189		4.88		4.44		44	2		1		1		1		—
Subordinated debt	959		845		114		14		3.36		2.75		61	8		6		2		1		1
Other borrowings	35,842		35,818		24		—		3.66		3.66		—	328		327		1		1		—
Long-term borrowings	36,970		36,722		248		1		3.66		3.64		2	338		334		4		3		1
Total borrowings	37,398		37,092		306		1		3.62		3.61		1	339		335		4		3		1
Total interest-bearing liabilities	$	154,622	$	151,657	$	2,965	2		3.22		3.39		(17)	$	1,232	$	1,292	$	(60)	$	19	$	(79)

Noninterest-bearing liabilities	$	48,370	$	49,451	$	(1,081)	(2)
Stockholders' equity	22,457		22,598		(141)		(1)
Total liabilities and stockholders’ equity	$	225,449	$	223,706	$	1,743	1

Net interest spread(2)									2.46	%	2.44	%	2
Net interest margin and net interest income (2)									3.26	%	3.32	%	(6)	$	1,663	$	1,709	$	(46)

(1) Loans and leases include nonaccrual loans and loans held for sale. Interest income on loans and leases includes accretion income and loan fees.

(2) The average balances and yields for loans and leases are calculated net of average credit balances of factoring clients to appropriately reflect the interest-earning portion of factoring receivables.

NII, NIM, and Average Balances (Current Quarter Compared to Linked Quarter)

The table above quantifies the increases or decreases for the Current Quarter compared to the Linked Quarter for NII and NIM, as well as average balances of interest-earning assets and interest-bearing liabilities, and the respective yields and rates paid. The main reasons for the increases and decreases are explained below.

NII and NIM

•NII for the Current Quarter was $1.66 billion, a decrease of $46 million or 3% from $1.71 billion for the Linked Quarter. NII, excluding PAA,(1) was $1.59 billion for the Current Quarter, a decrease of $39 million from $1.63 billion for the Linked Quarter. The main reasons for the decreases in NII and NII, excluding PAA,(1) are explained below.

◦Interest and fees on loans for the Current Quarter was $2.24 billion, a decrease of $86 million or 4% from $2.32 billion for the Linked Quarter. The decrease was a result of a lower yield, partially offset by the impact of a higher average balance.

•Loan PAA was $84 million for the Current Quarter, a decrease of $6 million from $90 million for the Linked Quarter.

•Interest and fees on loans, excluding loan PAA,(1) was $2.15 billion for the Current Quarter, a decrease of $80 million from $2.23 billion for the Linked Quarter.

◦Interest income on interest-earning deposits at banks for the Current Quarter was $245 million, a decrease of $57 million or 19% from $302 million for the Linked Quarter, due to declines in the average balance and the federal funds rate.

◦Interest income on investment securities and securities purchased under agreements to resell for the Current Quarter was $414 million, an increase of $37 million or 10% from $377 million for the Linked Quarter, due to a higher average balance and a higher yield.

◦Interest expense on interest-bearing deposits for the Current Quarter was $893 million, a decrease of $64 million or 7% from $957 million for the Linked Quarter, due to a lower rate paid, partially offset by the impact of a higher average balance.

◦Interest expense on borrowings for the Current Quarter was $339 million, an increase of $4 million or 1% from $335 million for the Linked Quarter, primarily due to a higher average balance as a result of the Current Quarter Debt Issuances discussed in the “Interest-bearing Liabilities—Borrowings” section of this MD&A. We expect interest expense on borrowings to increase next quarter as the Current Quarter Debt Issuances will be included in the average balance and rate paid for the entire quarter.

•NIM for the Current Quarter was 3.26%, a decrease of 6 bps from 3.32% for the Linked Quarter. NIM compression was mainly due to a decline in the yield on interest-earning assets (due primarily to decreases in the federal funds rate in the Linked Quarter that remained in effect for the entire Current Quarter), a mix shift from interest-earning deposits at banks to investment securities, and an increase in average interest-bearing deposits, partially offset by a decline in the cost of interest-bearing deposits and an increase in average loans. Lower PAA had a 1 bp negative impact on NIM during the Current Quarter. NIM, excluding PAA,(1) was 3.12% for the Current Quarter, a decrease of 4 bps from 3.16% for the Linked Quarter.

◦The yield on average interest-earning assets for the Current Quarter was 5.68%, a decrease of 15 bps from 5.83% for the Linked Quarter, mainly due to declines in yields on loans and interest-earning deposits at banks, as well as slightly lower loan PAA, partially offset by a higher yield on investment securities.

◦The rate paid on average interest-bearing liabilities for the Current Quarter was 3.22%, a decrease of 17 bps from 3.39% for the Linked Quarter, primarily due to a lower rate paid on interest-bearing deposits, partially offset by the impact of a higher average balance of interest-bearing deposits. The rate paid on borrowings for the Current Quarter was 3.62%, relatively consistent with 3.61% for the Linked Quarter.

Average Balances of Interest-earning Assets and Interest-bearing Liabilities

•Average interest-earning assets for the Current Quarter were $206.03 billion, an increase of $1.25 billion or 1% from $204.78 billion for the Linked Quarter.

•Average interest-bearing liabilities for the Current Quarter were $154.62 billion, an increase of $2.97 billion or 2% from $151.66 billion for the Linked Quarter.

•For further discussion, refer to the “Financial Performance Summary—Balance Sheet Highlights,” “Interest-earning Assets,” and “Interest-bearing Liabilities” sections of this MD&A.

(1) Refer to the “NII, NIM, and Interest and Fees on Loans, Excluding PAA” discussion in the “Non-GAAP Financial Measurements” section of this MD&A for further discussion.

Table 6

Average Balances, Yields and Rates, NII, and NIM (Current Quarter to Prior Year Quarter)


dollars in millions	Average Balance								Yield / Rate					Interest Income / Expense
	Three Months Ended				Increase (Decrease) from Prior Year Quarter				Three Months Ended					Three Months Ended						Increase (Decrease) due to:
	Mar 31, 2025		Mar 31, 2024						Mar 31, 2025		Mar 31, 2024		Increase (decrease) bps	Mar 31, 2025		Mar 31, 2024		Increase (Decrease)		Volume(1)		Yield /Rate(1)
Loans and leases(1)(2)	$	139,491	$	132,313	$	7,178	5	%	6.49	%	7.15	%	(66)	$	2,236	$	2,354	$	(118)	$	115	$	(233)
Investment securities	43,555		32,647		10,908		33		3.79		3.42		37	411		279		132		100		32
Securities purchased under agreements to resell	283		244		39		16		4.37		5.40		(103)	3		3		—		1		(1)
Interest-earning deposits at banks	22,699		33,383		(10,684)		(32)		4.38		5.39		(101)	245		448		(203)		(128)		(75)
Total interest-earning assets(2)	$	206,028	$	198,587	$	7,441	4		5.68		6.23		(55)	$	2,895	$	3,084	$	(189)	$	88	$	(277)

Noninterest-earning assets	19,421		17,494		1,927		11
Total assets	$	225,449	$	216,081	$	9,368	4

Interest-bearing deposits
Checking with interest	$	23,931	$	23,963	$	(32)	—	%	1.77	%	2.18	%	(41)	$	104	$	130	$	(26)	$	(1)	$	(25)
Money market	36,760		30,937		5,823		19		2.83		3.02		(19)	257		232		25		41		(16)
Savings	43,918		36,485		7,433		20		3.85		4.31		(46)	417		391		26		71		(45)
Time deposits	12,615		16,679		(4,064)		(24)		3.71		4.21		(50)	115		175		(60)		(40)		(20)
Total interest-bearing deposits	117,224		108,064		9,160		9		3.09		3.45		(36)	893		928		(35)		71		(106)
Borrowings:
Securities sold under customer repurchase agreements	428		431		(3)		(1)		0.52		0.47		5	1		1		—		—		—



Senior unsecured borrowings	169		376		(207)		(55)		4.88		2.50		238	2		2		—		(2)		2
Subordinated debt	959		911		48		5		3.36		3.29		7	8		8		—		—		—
Other borrowings	35,842		35,859		(17)		—		3.66		3.66		—	328		328		—		—		—
Long-term borrowings	36,970		37,146		(176)		(1)		3.66		3.64		2	338		338		—		(2)		2
Total borrowings	37,398		37,577		(179)		(1)		3.62		3.60		2	339		339		—		(2)		2
Total interest-bearing liabilities	$	154,622	$	145,641	$	8,981	6		3.22		3.49		(27)	$	1,232	$	1,267	$	(35)	$	69	$	(104)

Noninterest-bearing liabilities	$	48,370	$	48,942	$	(572)	(1)
Stockholders' equity	22,457		21,498		959		5
Total liabilities and stockholders’ equity	$	225,449	$	216,081	$	9,368	4

Net interest spread(2)									2.46	%	2.74	%	(28)
Net interest margin and net interest income (2)									3.26	%	3.67	%	(41)	$	1,663	$	1,817	$	(154)

(1) Loans and leases include nonaccrual loans and loans held for sale. Interest income on loans and leases includes accretion income and loan fees.

The following table includes the average interest-earning assets by category:

Table 7

Average Interest-earning Asset Mix


	% of Average Interest-earning Assets
	Three Months Ended
	March 31, 2025		December 31, 2024		March 31, 2024
Loans and leases	68	%	68	%	67	%
Investment securities	21		20		16

Interest-earning deposits at banks	11		12		17
Total interest-earning assets	100	%	100	%	100	%

The following table shows the average interest-bearing liability mix:

Table 8

Average Interest-bearing Liability Mix


	% of Average Interest-bearing Liabilities
	Three Months Ended
	March 31, 2025		December 31, 2024		March 31, 2024
Total interest-bearing deposits	76	%	76	%	74	%


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

Provision for Credit Losses

The provision for credit losses for the Current Quarter was $154 million, a decrease of $1 million from $155 million for the Linked Quarter. The Current Quarter provision for credit losses included a provision for loan and lease losses of $148 million, a decrease of $10 million from the Linked Quarter, and a provision for off-balance sheet credit exposure of $6 million, an increase of $9 million from the Linked Quarter.

•The decrease in provision for loan and lease losses was mainly attributable to a decline in net charge-offs of $16 million, partially offset by the impact of a $4 million reserve build in the Current Quarter compared to a $2 million reserve release in the Linked Quarter.

•The increase in provision for off-balance sheet credit exposure was mostly due to an increase in off-balance sheet credit exposure and modest deterioration in the macroeconomic forecast.

The ALLL and net charge-offs are further discussed in the “Risk Management—Credit Risk—Allowance for Loan and Lease Losses” and “—Credit Metrics” sections of this MD&A and in Note 5—Allowance for Loan and Lease Losses.

Table 9

Provision for Credit Losses


dollars in millions	Three Months Ended
	March 31, 2025		December 31, 2024		March 31, 2024

Provision for loan and lease losses	$	148	$	158	$	93


Provision (benefit) for off-balance sheet credit exposure	6		(3)		(29)


Provision for credit losses	$	154	$	155	$	64

Noninterest Income

The primary sources of noninterest income consist of rental income on operating lease equipment, lending-related fees, deposit fees and service charges, client investment fees, wealth management services, international fees, factoring commissions, cardholder and merchant services, and insurance commissions.

Table 10

Noninterest Income


dollars in millions	Three Months Ended						Increase (Decrease) from Linked Quarter
	March 31, 2025		December 31, 2024		March 31, 2024
Rental income on operating lease equipment	$	270	$	272	$	255	$	(2)	(1)	%

Lending-related fees	66		68		59		(2)		(3)
Deposit fees and service charges	58		58		58		—		(1)
Client investment fees	53		54		50		(1)		(3)
Wealth management services	56		54		51		2		5
International fees	32		33		28		(1)		(2)
Factoring commissions	17		20		17		(3)		(13)
Cardholder services, net	41		41		40		—		—
Merchant services, net	14		13		12		1		3
Insurance commissions	14		13		15		1		9
Realized gain on sale of investment securities, net	—		2		—		(2)		(100)
Fair value adjustment on marketable equity securities, net	(5)		10		(4)		(15)		(150)
Gain on sale of leasing equipment, net	5		11		10		(6)		(51)

Loss on extinguishment of debt	—		—		(2)		—		—
Other noninterest income	14		50		38		(36)		(73)

Total noninterest income	$	635	$	699	$	627	$	(64)	(9)

The above table includes the amounts for the components of noninterest income for the Current Quarter, Linked Quarter, and Prior Year Quarter, as well as the dollar and percentage increases or decreases for the Current Quarter compared to the Linked Quarter.

Noninterest income for the Current Quarter was $635 million, a decrease of $64 million or 9% from $699 million for the Linked Quarter, mainly due to the following:

•The decrease in other noninterest income of $36 million was mainly attributable to the negative impacts from fair value changes in customer derivative positions driven by changes in the rate environment, as well as the write-down of a held for sale asset.

•The decrease in the fair value adjustment on marketable equity securities of $15 million reflects lower market prices of the underlying securities.

•The decrease in the gain on sale of leasing equipment of $6 million was mostly due to lower volumes of rail equipment sales.

•The decrease in factoring commissions of $3 million was primarily due to a decline in factoring volume.

•The decrease in rental income on operating lease equipment of $2 million was mainly the result of the Linked Quarter including charges that are assessed annually, which were partially offset by strong repricing of renewed equipment during the Current Quarter. Refer to the Rail segment discussion in the “Results by Segment” section of this MD&A for further details.

Noninterest Expense

Noninterest expense includes the following primary expense categories, with the balance in other noninterest expense.

Table 11

Noninterest Expense


dollars in millions	Three Months Ended						Increase (Decrease) from Linked Quarter
	March 31, 2025		December 31, 2024		March 31, 2024
Depreciation on operating lease equipment	$	98	$	101	$	96	$	(3)	(3)	%
Maintenance and other operating lease expenses	58		55		45		3		5

Personnel cost	818		801		744		17		2
Net occupancy expense	58		60		62		(2)		(4)
Equipment expense	136		136		114		—		—
Professional fees	25		30		25		(5)		(16)
Third-party processing fees	63		57		60		6		10
FDIC insurance expense	38		33		41		5		18
Marketing expense	32		24		14		8		31
Acquisition-related expenses	42		62		58		(20)		(33)
Intangible asset amortization	15		16		17		(1)		(2)
Other noninterest expense	110		142		100		(32)		(22)

Total noninterest expense	$	1,493	$	1,517	$	1,376	$	(24)	(2)

The above table includes the amounts for the components of noninterest expense for the Current Quarter, Linked Quarter, and Prior Year Quarter, as well as the dollar and percentage increases or decreases for the Current Quarter compared to the Linked Quarter.

Noninterest expense for the Current Quarter was $1.49 billion, a decrease of $24 million or 2% from $1.52 billion for the Linked Quarter, mainly due to the following:

•The decrease in other noninterest expense of $32 million reflected declines in capitalized software impairment, state related non-income taxes, and charitable donations to support relief efforts for recent natural disasters.

•The decrease in acquisition-related expenses of $20 million is summarized in the table below.

•The increase in personnel cost of $17 million was mainly due to merit-based compensation increases, net staff additions, and seasonal increases in employee benefits and payroll taxes.

•The increase in marketing expense of $8 million was primarily due to marketing for Direct Bank deposits.

•The increase in third-party processing fees of $6 million was largely a result of higher transaction volume and additional services.

•The decrease in professional fees of $5 million was mostly related to lower consulting costs.

•The increase in FDIC insurance expense of $5 million was largely due to a higher FDIC insurance rate and an increase in average assets.

•The decrease in depreciation on operating lease equipment of $3 million is discussed in the Commercial Bank and Rail segments in the section entitled “Results by Segment” of this MD&A.

•The increase in maintenance and other operating lease expenses of $3 million is discussed in the Rail segment in the section entitled “Results by Segment” of this MD&A.

The following table presents the major components of acquisition-related expenses:

Table 12

Acquisition-related Expenses


dollars in millions	Three Months Ended
	March 31, 2025		December 31, 2024		March 31, 2024
Personnel cost	$	15	$	21	$	29
Professional fees	26		32		26


Asset impairment	—		7		—
Other acquisition-related expense	1		2		3
Total acquisition-related expense	$	42	$	62	$	58

Acquisition-related personnel cost primarily includes severance and retention costs for employees associated with business combinations. These amounts are recognized over the requisite service period, if any.

Acquisition-related professional fees mainly include consulting, legal and accounting costs associated with business combinations and the related integration, optimization, and business process reengineering, including enhancements to technology. These amounts are expensed as incurred.

Income Taxes

Table 13

Income Tax Data


dollars in millions	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
Income before income taxes	$	651		$	736		$	1,004
Income tax expense	$	168		$	36		$	273
Effective income tax rate	25.8		%	4.9		%	27.2		%

The effective income tax rate (“ETR”) was 25.8% for the Current Quarter, which is within our projected range for the 2025 ETR, compared to 4.9% for the Linked Quarter. The lower income tax expense and ETR for the Linked Quarter was primarily driven by the revaluation of the deferred tax liability due to a change in the state tax rate applied in the Linked Quarter. The tax rate applied in the Linked Quarter declined after we filed our first income tax returns that included the SVBB Acquisition.

The ETR is impacted by a number of factors, including the relative mix of domestic and international earnings, effects of changes in enacted tax laws, adjustments to valuation allowances, and discrete items. The ETR in future periods may vary from the Current Quarter ETR due to changes in these factors.

BancShares monitors and evaluates the potential impact of current events on the estimates used to establish income tax expense and income tax liabilities. On a periodic basis, we evaluate our income tax positions based on current tax law and positions taken by various tax auditors within the jurisdictions where BancShares is required to file income tax returns, as well as potential or pending audits or assessments by tax auditors. Refer to Note 15—Income Taxes for additional information.

RESULTS BY SEGMENT

We made changes to the composition of our reportable segments during the first quarter of 2025 as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation and briefly summarized in the “Recent Events” section earlier in this MD&A. Segment disclosures for 2024 periods included in this Form 10-Q were recast to reflect the changes.

BancShares’ segments include the General Bank, the Commercial Bank, SVB Commercial, and Rail. All other financial information not included in the segments is reported in the Corporate section of the segment disclosures. Certain noninterest expenses are directly incurred by a segment, while others are not. Noninterest expenses not directly incurred by a segment are included in Corporate unless allocated to a segment (“Allocated Expenses”). Under our segment expense allocation methodology, Allocated Expenses increase noninterest expense of the applicable segment(s), with an offsetting decrease to Corporate noninterest expense. “All other noninterest expense” in the segment reporting tables below are presented net of Allocated Expenses, resulting in a reduction to expense (or “Contra Expense”) for Corporate. Refer to Note 17—Segment Information for descriptions of segment products and services.

General Bank

Table 14

General Bank: Financial Data


dollars in millions	Three Months Ended
Earnings Summary	March 31, 2025		December 31, 2024		March 31, 2024
Net interest income	$	788	$	777	$	684
Total noninterest income	164		166		145
Total revenue	952		943		829
Personnel cost	214		190		207

All other noninterest expense	351		353		321
Total noninterest expense	565		543		528

Provision for credit losses	46		22		21
Income before income taxes	341		378		280
Income tax expense	88		92		79
Net income	$	253	$	286	$	201
Pre-provision net revenue (“PPNR”) (1)	387		400		301
Select Period End Balances
Loans and leases	$	64,847	$	64,887	$	62,015


Deposits	74,309		72,956		70,908

(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.

General Bank segment net income for the Current Quarter decreased $33 million compared to the Linked Quarter. PPNR decreased $13 million from the Linked Quarter. The decreases in net income and PPNR included higher personnel costs, partially offset by higher NII.

The $11 million increase in NII reflected lower deposit costs, which offset deposit growth and lower income on loans.

Personnel cost increased $24 million mainly due to seasonal increases in employee benefits and payroll taxes.

The $24 million increase in provision for credit losses in the Current Quarter was mainly due to a reserve build, including higher specific reserves, which was partially offset by lower net charge-offs.

The $40 million decrease in loans and leases compared to December 31, 2024 was mainly due to lower mortgage loans and lower commercial and business loans in our Branch Network, which offset modest growth in Wealth.

Deposits in the General Bank segment primarily include deposits from the Branch Network, as well as Wealth and Community Association Banking (“CAB”) channels. The $1.35 billion increase in deposits compared to December 31, 2024 was primarily in money market deposits in the Branch Network, along with higher CAB deposits, partially offset by lower time deposits.

Commercial Bank

Table 15

Commercial Bank: Financial Data


dollars in millions	Three Months Ended
Earnings Summary	March 31, 2025		December 31, 2024		March 31, 2024
Net interest income	$	293	$	307	$	300
Noninterest Income
Rental income on operating lease equipment	56		55		57
Less: depreciation on operating lease equipment	44		44		46

Net rental income on operating lease equipment (1)	12		11		11
All other noninterest income	69		101		83
Total noninterest income (2)	125		156		140
Noninterest income, net of depreciation (1)	81		112		94
Total revenue	418		463		440
Revenue, net of depreciation (1)	374		419		394
Noninterest Expense
Personnel cost	72		59		74

All other noninterest expense	159		160		140
Total noninterest expense (2)	275		263		260
Noninterest expense, net of depreciation (1)	231		219		214

Provision for credit losses	85		90		20
Income before income taxes	58		110		160
Income tax expense	15		22		42
Net income	$	43	$	88	$	118
PPNR (1)	143		200		180
Select Period End Balances
Loans and leases	$	38,631	$	37,898	$	36,251
Operating lease equipment, net	731		750		763

Deposits	2,994		3,502		3,400

(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 and total noninterest expense include depreciation on operating lease equipment.

Commercial Bank segment net income for the Current Quarter decreased $45 million compared to the Linked Quarter. PPNR decreased $57 million from the Linked Quarter. The decreases were mostly due to lower noninterest income, in addition to lower NII and higher personnel costs, as described below.

Segment NII decreased $14 million compared to the Linked Quarter, primarily due to lower loan yields due to a full quarter impact of federal funds rate decreases in the 2024 fourth quarter, which offset loan growth and lower funding costs.

Net rental income on operating lease equipment increased $1 million from the Linked Quarter. Rental income and depreciation expense on operating lease equipment is related to small and large ticket equipment we own and lease to others.

The $32 million decrease in all other noninterest income was mostly due to unfavorable fair value changes in customer derivative positions and foreclosed properties and lower factoring commissions, partially offset by higher lending-related fees, mostly due to higher capital market fees.

The $13 million increase in personnel cost was mainly due to seasonal increases in employee benefits and payroll taxes.

The decrease in provision for credit losses for the Current Quarter was mainly due to lower net charge-offs, largely in equipment finance, which offset loan growth.

The $733 million increase in loans and leases compared to December 31, 2024 reflects loan growth in a number of industry verticals, primarily TMT and healthcare, along with lower prepayments.

Deposits in the Commercial Bank segment decreased by $508 million from December 31, 2024, mostly due to a decline in noninterest-bearing checking deposits. Customers generally build deposits at year end in anticipation of higher first quarter usage.

SVB Commercial

Table 16

SVB Commercial: Financial Data


dollars in millions	Three Months Ended
Earnings Summary	March 31, 2025		December 31, 2024		March 31, 2024
Net interest income	$	493	$	544	$	523
Total noninterest income	132		137		134
Total revenue	625		681		657
Personnel cost	114		111		119

All other noninterest expense	265		288		247
Total noninterest expense	379		399		366

Provision for credit losses	23		43		23
Income before income taxes	223		239		268
Income tax expense	57		58		75
Net income	$	166	$	181	$	193
PPNR (1)	246		282		291
Select Period End Balances
Loans and leases	$	37,818	$	37,374	$	37,042


Deposits	37,020		36,524		33,879

(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 decreased $15 million compared to the Linked Quarter. PPNR decreased $36 million from the Linked Quarter. The decreases in net income and PPNR were mainly due to lower NII, partially offset by lower all other noninterest expense, while the decrease in segment net income also included a lower provision for credit losses.

NII decreased $51 million due to lower interest income on loans as lower yields, due to a full quarter impact of federal funds rate decreases in the 2024 fourth quarter, offset loan growth and lower funding costs.

All other noninterest expense was down. Refer to the “Noninterest Expense” section of this MD&A.

The provision for credit losses decreased $20 million, which included lower specific reserves in the investor dependent portfolios.

The $444 million increase in loans from December 31, 2024 was attributed to the global fund banking portfolio, partially offset by declines in investor dependent loans as payments exceeded new originations.

Deposits increased $496 million from December 31, 2024, mainly due to growth in noninterest-bearing deposits and money market deposits, partially offset by a decline in interest-bearing checking deposits. During the Current Quarter we made a strategic decision to move $2.4 billion in select cash sweep deposits to off-balance sheet client funds.

Rail

Table 17

Rail: Financial Data


dollars in millions	Three Months Ended
Earnings Summary	March 31, 2025		December 31, 2024		March 31, 2024
Net interest expense	$	(52)	$	(50)	$	(43)
Noninterest Income
Rental income on operating lease equipment	214		217		198
Less: depreciation on operating lease equipment	54		57		50
Less: maintenance and other operating lease expenses	58		55		45
Net rental income on operating lease equipment (1)	102		105		103
All other noninterest income	2		6		4
Total noninterest income (2)	216		223		202
Noninterest income, net of depreciation and maintenance (1)	104		111		107
Total revenue	164		173		159
Revenue, net of depreciation and maintenance (1)	52		61		64
Noninterest Expense
Personnel cost	8		5		8

All other noninterest expense	14		16		14
Total noninterest expense (2)	134		133		117
Noninterest expense, net of depreciation and maintenance (1)	22		21		22

Provision for credit losses	—		—		—
Income before income taxes	30		40		42
Income tax expense	8		9		11
Net income	$	22	$	31	$	31
PPNR (1)	30		40		42
Select Period End Balances
Loans and leases	$	62	$	62	$	62
Operating lease equipment, net	8,640		8,573		8,048

Deposits	12		18		14

(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 and total noninterest expense include depreciation and maintenance on operating lease equipment.

Rail segment net income, rental income on operating leases 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.

Rail segment net income for the Current Quarter decreased $9 million and PPNR decreased $10 million compared to the Linked Quarter. The decreases were mostly due to lower gains on sales of equipment on operating lease and net rental income. Net rental income on operating lease equipment decreased $3 million compared to the Linked Quarter. The decrease reflected lower rental income, mainly the result of the Linked Quarter including charges that are assessed annually, which were partially offset by strong repricing of renewed equipment during the Current Quarter. Lower depreciation was offset by higher maintenance costs. Depreciation on operating lease equipment decreased $3 million, primarily due to higher residual review adjustments on rail assets in the Linked Quarter, which offset the fleet additions. Maintenance and other operating lease expenses increased $3 million. Maintenance and other operating lease expenses tend to be variable due to timing and the number of railcars coming on or off lease as well as asset condition.

All other noninterest income primarily reflects net gains on sale of leasing equipment, which can vary due to the type of cars sold, volume sold, and market conditions.

Our fleet is diverse and the average re-pricing of equipment upon lease maturities was 126.0% of the average prior or expiring lease rate during the Current Quarter. Railcar utilization, including commitments to lease, was 97.0% at March 31, 2025 and 97.6% at December 31, 2024.

Portfolio

Rail segment customers include all of the U.S. and Canadian Class I railroads (i.e., railroads with annual revenues of approximately $500 million and greater) and other railroads, as well as manufacturers and commodity shippers. Our total operating lease fleet at March 31, 2025 consisted of approximately 126,600 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 18

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


	March 31, 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
Covered hoppers	45	%	41	%		45	%	42	%
Tank cars	27		39			27		38
Mill/ coil gondolas	8		6			8		6
Coal	7		1			7		1
Boxcars	6		5			6		6
Other	7		8			7		7
Total	100	%	100	%		100	%	100	%

Table 19

Rail Operating Lease Equipment by Obligor Industry


dollars in millions	March 31, 2025				December 31, 2024
Manufacturing	$	3,545	41	%		$	3,467	40	%
Rail	2,011		23			2,003		23
Wholesale	1,553		18			1,505		18
Oil and gas extraction / services	518		6			583		7
Energy and utilities	240		3			239		3
Other	773		9			776		9
Total	$	8,640	100	%		$	8,573	100	%

Corporate

Table 20

Corporate: Financial Data


dollars in millions	Three Months Ended
Earnings Summary	March 31, 2025		December 31, 2024		March 31, 2024
Net interest income	$	141	$	131	$	353
Total noninterest income	(2)		17		6
Total revenue	139		148		359
Personnel cost	410		436		336
Acquisition-related expenses	42		62		58
All other noninterest expense	(312)		(319)		(289)
Total noninterest expense	140		179		105

Provision for credit losses	—		—		—
(Loss) income before income taxes	(1)		(31)		254
Income tax (benefit) expense	—		(145)		66
Net (loss) income	$	(1)	$	114	$	188
PPNR (1)	(1)		(31)		254
Select Period End Balances


Investment securities	$	44,319	$	44,090	$	35,044
Deposits	44,990		42,229		41,408

(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 decreased $115 million and PPNR increased $30 million compared to the Linked Quarter. The decrease in net income was mainly due to the change in our estimated state tax rates that benefited the Linked Quarter as further discussed in the “Income Taxes” section of this MD&A. The higher PPNR mostly reflected lower noninterest expenses.

NII increased $10 million, reflecting lower deposit interest expense as a result of lower rates on Direct Bank deposits and an increase in interest income on investment securities resulting from continued purchases and higher yields, partially offset by lower interest income on interest-earning deposits at banks, a decline in loan PAA, and higher borrowing costs due to the Current Quarter Debt Issuances.

Noninterest income decreased $19 million mostly due to lower fair value adjustments on marketable equity securities.

Personnel cost decreased $26 million and acquisition-related expenses decreased $20 million from the Linked Quarter. Both are further discussed in the “Noninterest Expense” section of this MD&A. All other noninterest expense is presented net of Allocated Expenses, resulting in a Contra Expense for Corporate as further discussed above and in Note 17—Segment Information.

Corporate deposits increased $2.76 billion from December 31, 2024 primarily due to growth in savings deposits, partially offset by lower time deposits. Total deposits in Corporate mainly include $44.17 billion of Direct Bank deposits with the remaining balance consisting of brokered and other deposits.

BALANCE SHEET ANALYSIS

Interest-earning Assets

Interest-earning assets include interest-earning deposits at banks, securities purchased under agreements to resell, investment securities, loans held for sale, and loans and leases, all of which reflect varying interest rates based on the risk level and repricing characteristics of the underlying asset. Higher-risk investments typically carry a higher interest rate, but expose us to higher levels of market and/or credit risk. We strive to maintain a high level of interest-earning assets relative to total assets while keeping non-earning assets at a minimum.

Interest-earning Deposits at Banks

Interest-earning deposits at banks are primarily comprised of interest-bearing deposits with the FRB. Interest-earning deposits at banks as of March 31, 2025 totaled $24.69 billion, an increase of $3.33 billion or 16% from $21.36 billion at December 31, 2024. The increase from December 31, 2024 is related to continued liquidity and funding management as we grew customer deposits and issued debt, funded loan growth, and were a main funding source for purchases of investment securities and repurchases of shares of the Parent Company’s Class A common stock during the Current Quarter.

Securities Purchased Under Agreements to Resell

Securities purchased under agreements to resell at March 31, 2025 totaled $345 million, an increase of $187 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 March 31, 2025 totaled $44.32 billion, an increase of $229 million or 1% from $44.09 billion at December 31, 2024. The increase from December 31, 2024 resulted from purchases that totaled $2.07 billion, which were primarily U.S agency residential mortgage-backed and short-duration U.S. Treasury investment securities, and non-cash items, such as fair value changes for investment securities available for sale and marketable equity securities along with amortization and accretion, that offset maturities, sales, and payments of $2.23 billion.

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 March 31, 2025, investment securities available for sale had a net pretax unrealized loss of $440 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 March 31, 2025. For corporate bonds, we analyzed the changes in interest rates relative to when the investment securities were purchased or acquired, and considered other factors including changes in credit ratings, delinquencies, and other macroeconomic factors. We determined no allowance for credit loss was required as of March 31, 2025.

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 March 31, 2025.

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

Table 21

Investment Securities


dollars in millions	March 31, 2025						December 31, 2024
	Amortized Cost		Fair Value		Composition(1)			Amortized Cost		Fair Value		Composition(1)
Investment securities available for sale:
U.S. Treasury	$	13,105	$	13,150	30.6	%		$	13,897	$	13,903	32.7	%
Government agency	71		69		0.2			79		77		0.2
Residential mortgage-backed securities	16,905		16,605		38.6			16,161		15,620		36.7
Commercial mortgage-backed securities	3,759		3,594		8.4			3,869		3,666		8.6
Corporate bonds	483		465		1.1			489		467		1.1
Municipal bonds	17		17		—			17		17		—

Total investment securities available for sale	$	34,340	$	33,900	78.9	%		$	34,512	$	33,750	79.3	%
Investment in marketable equity securities	$	78	$	95	0.2	%		$	79	$	101	0.2	%
Investment securities held to maturity:
U.S. Treasury	$	484	$	459	1.1	%		$	483	$	452	1.1	%
Government agency	1,491		1,400		3.3			1,489		1,374		3.2
Residential mortgage-backed securities	4,668		4,090		9.5			4,558		3,878		9.1
Commercial mortgage-backed securities	3,378		2,748		6.4			3,407		2,729		6.5

Supranational securities	301		274		0.6			300		267		0.6
Other	2		2		—			2		2		—
Total investment securities held to maturity	$	10,324	$	8,973	20.9	%		$	10,239	$	8,702	20.5	%
Total investment securities	$	44,742	$	42,968	100.0	%		$	44,830	$	42,553	100.0	%
(1) Calculated as a percentage of the total fair value of investment securities.

The following table presents the weighted average yields for investment securities available for sale and held to maturity at March 31, 2025, segregated by major category with ranges of contractual maturities. The weighted average yield on the portfolio was calculated using security-level annualized yields based on book yield to maturity and takes into account amortization of premiums and accretion of discounts, but does not include the effects of hedging. The total weighted average yields for investment securities available for sale and held to maturity are based on the underlying weighted average amortized cost.

Table 22

Weighted Average Yield on Investment Securities


	March 31, 2025
	Within One Year		One to Five Years		Five to 10 Years		After 10 Years		Total
Investment securities available for sale:
U.S. Treasury	4.33	%	4.31	%	—	%	—	%	4.32	%
Government agency	1.95		4.16		4.22		—		4.19
Residential mortgage-backed securities (1)	—		4.20		4.71		4.00		4.15
Commercial mortgage-backed securities (1)	4.30		4.78		5.68		2.96		4.09
Corporate bonds	6.53		7.89		5.39		6.13		6.00
Municipal bonds	—		—		—		7.00		7.00

Total investment securities available for sale	4.34	%	4.44	%	4.79	%	3.90	%	4.23	%

Investment securities held to maturity:
U.S. Treasury	1.19	%	1.42	%	1.57	%	—	%	1.38	%
Government agency	1.25		1.51		1.88		—		1.54
Residential mortgage-backed securities (1)	—		—		2.08		2.57		2.57
Commercial mortgage-backed securities (1)	—		2.46		1.80		2.53		2.53

Supranational securities	1.23		1.49		1.68		—		1.56
Other	3.86		—		—		—		3.86
Total investment securities held to maturity	1.24	%	1.49	%	1.79	%	2.55	%	2.32	%

(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 March 31, 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 March 31, 2025 were $185 million, an increase of $100 million or 119% from $85 million at December 31, 2024.

Table 23

Assets Held for Sale


dollars in millions	March 31, 2025		December 31, 2024
Loans and leases:
Commercial	$	113	$	27
Consumer	70		55
SVB	—		—
Loans and leases	183		82
Operating lease equipment	2		3
Total assets held for sale	$	185	$	85

Loans and Leases

Loans and leases held for investment at March 31, 2025 were $141.36 billion, an increase of $1.14 billion or 1% from $140.22 billion at December 31, 2024. The increase from December 31, 2024 reflects growth in commercial and SVB loans. The increase of $741 million in commercial loans was spread across various industry verticals such as TMT and healthcare. Within SVB loan classes, the $477 million growth was mostly attributed to the global fund banking portfolio, partially offset by declines in investor dependent portfolios as loan payments exceeded new originations. Consumer loans decreased $81 million, as we continue to originate and sell rather than hold for investment.

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 24

Loans and Leases


dollars in millions	March 31, 2025				December 31, 2024
	Balance		% to Total Loans			Balance		% to Total Loans
Commercial:
Commercial construction	$	5,529	4	%		$	5,109	4	%
Owner occupied commercial mortgage	16,951		12			16,842		12
Non-owner occupied commercial mortgage	16,139		11			16,194		12
Commercial and industrial	31,899		23			31,640		22
Leases	2,022		1			2,014		1
Total commercial	$	72,540	51	%		$	71,799	51	%
Consumer:
Residential mortgage	$	23,060	16	%		$	23,152	16	%
Revolving mortgage	2,635		2			2,567		2
Consumer auto	1,487		1			1,523		1
Consumer other	965		1			986		1
Total consumer	$	28,147	20	%		$	28,228	20	%
SVB:
Global fund banking	$	28,572	20	%		$	27,904	20	%
Investor dependent - early stage	908		1			997		1
Investor dependent - growth stage	2,050		1			2,196		2
Innovation C&I and cash flow dependent	9,141		6			9,097		6



Total SVB (1)	$	40,671	29	%		$	40,194	29	%
Total loans and leases	$	141,358	100	%		$	140,221	100	%
Allowance for loan and lease losses	(1,680)					(1,676)
Net loans and leases	$	139,678				$	138,545

(1) Total SVB loans are irrespective of segment composition further described in Note 17—Segment Information.

The unamortized discount related to acquired loans was $1.52 billion at March 31, 2025, a decrease of $74 million from $1.60 billion at December 31, 2024. The decrease from December 31, 2024 reflects accretion of $84 million, including $8 million for unfunded commitments.

Operating Lease Equipment, Net

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

Table 25

Operating Lease Equipment, Net


dollars in millions	March 31, 2025		December 31, 2024
Railcars and locomotives	$	8,640	$	8,573
Other equipment	731		750
Total (1)	$	9,371	$	9,323

(1) Includes off-lease rail equipment of $256 million at March 31, 2025, and $219 million at December 31, 2024.

Interest-bearing Liabilities

Interest-bearing liabilities include interest-bearing deposits, securities sold under agreements to repurchase, and borrowings. Interest-bearing liabilities at March 31, 2025 totaled $156.96 billion, an increase of $3.32 billion or 2% from $153.65 billion at December 31, 2024, mainly due to deposit growth as well as the Current Quarter Debt Issuances, as further discussed below.

Deposits

Total deposits at March 31, 2025 were $159.33 billion, an increase of $4.10 billion or 3% from $155.23 billion at December 31, 2024. The increase from December 31, 2024 was mainly attributable to:

•growth in savings deposits, partially offset by lower time deposits in the Direct Bank,

•higher noninterest-bearing demand, partially offset by a decline in interest-bearing checking deposits in the SVB Commercial segment,

•growth in money market deposits, partially offset by lower time deposit accounts in the Branch Network, and

•lower noninterest-bearing demand deposits in the Commercial Bank.

The following table summarizes the types of deposits:

Table 26

Deposits


dollars in millions	March 31, 2025			December 31, 2024
Noninterest-bearing demand	$	40,767		$	38,633
Checking with interest	23,041			25,343
Money market	37,705			35,722
Savings	45,817			42,278
Time	11,995			13,253
Interest-bearing deposits	118,558			116,596
Total deposits	$	159,325		$	155,229
Noninterest-bearing deposits to total deposits	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 March 31, 2025 were in North Carolina, California, and South Carolina, which represented approximately 25.6%, 8.4%, and 7.8%, respectively, of total deposits.

The Direct Bank had $44.17 billion or 27.7% of our total deposits as of March 31, 2025. The Direct Bank deposits mainly consist of savings deposit accounts.

SVB Commercial segment deposits as of March 31, 2025 were $37.02 billion or 23.2% 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 $7.16 billion as of March 31, 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 March 31, 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 $58.06 billion, which represented approximately 36.4% of total deposits at March 31, 2025, compared to $59.51 billion or 38.3% of total deposits at December 31, 2024.

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

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

Table 27

Maturities of Time Deposits In Excess of $250,000


dollars in millions	March 31, 2025
Time deposits maturing in:
Three months or less	$	888
Over three months through six months	394
Over six months through 12 months	244
More than 12 months	14
Total	$	1,540

Borrowings

Total borrowings at March 31, 2025 were $38.41 billion, an increase of $1.36 billion from $37.05 billion at December 31, 2024. The increase from December 31, 2024 primarily related to the Current Quarter Debt Issuances (refer to the table below), as well as higher securities sold under agreements to repurchase.

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

Table 28

Borrowings


dollars in millions	March 31, 2025		December 31, 2024
Securities sold under agreements to repurchase	$	450	$	367


Federal Deposit Insurance Corporation
3.500% fixed rate note due March 2028(1)	35,829		35,816
Senior Unsecured Borrowings
5.231% fixed-to-floating rate notes due March 2031(2)	497		—
6.000% fixed rate notes due April 2036	58		58
Subordinated debt
3.375% fixed-to-floating rate notes due March 2030(3)	350		350
6.125% fixed rate notes due March 2028	441		445
6.254% fixed-to-fixed rate notes due March 2040(4)	745		—

Capital lease obligations	36		15
Total borrowings	$	38,406	$	37,051

(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 $163 million and $176 million at March 31, 2025 and December 31, 2024, respectively.

(2) The fixed rate period will end on March 12, 2030, and the notes will thereafter bear a floating interest rate equal to a benchmark rate based on the Compounded Secured Overnight Financing Rate (“SOFR”) Index Rate plus 141 bps per annum until the maturity date (or date of earlier redemption).

(3) The fixed rate period ended on March 15, 2025, and the notes now bear a floating interest rate equal to Three-Month Term SOFR plus 246.5 bps per annum.

(4) 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 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 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 29

Other Assets


dollars in millions	March 31, 2025		December 31, 2024
Affordable housing tax credit and other unconsolidated investments (1)	$	2,578	$	2,516
Accrued interest receivable	920		902
Fair value of derivative financial instruments	553		660
Pension and other retirement plan assets	667		658
Right of use assets for operating leases, net	300		316
Income tax receivable	500		505
Counterparty receivables	87		69
Bank-owned life insurance	107		106
Nonmarketable equity securities	136		127
Other real estate owned	97		56
Mortgage servicing rights	28		27
Federal Home Loan Bank stock	20		20
Other	803		778
Total other assets	$	6,796	$	6,740

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

The following table includes the components of other liabilities:

Table 30

Other Liabilities


dollars in millions	March 31, 2025		December 31, 2024
Deferred taxes	$	3,525	$	3,534
Commitments to fund tax credit investments	1,234		1,214
Accrued personnel cost (1)	495		1,024
Fair value of derivative financial instruments	541		625
Lease liabilities	340		357
Reserve for off-balance sheet credit exposure	284		278
Accrued interest payable	107		134
Accounts payable and other	1,125		1,030
Total other liabilities	$	7,651	$	8,196

(1) Accrued personnel cost can fluctuate based on timing of the payroll cycle. The December 31, 2024 accrued balance also included amounts related to annual incentive compensation that were paid in the Current Quarter.

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 for identifying, assessing, monitoring, and managing risk are part of the decision-making process. The Board’s role in risk oversight is an integral part of our overall Risk Management Framework and Risk Appetite Framework. The Board 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 is directed to monitor and advise the full Board regarding risk exposures, including credit, market, capital, liquidity, operational, compliance, asset, strategic, and reputational risks; review, approve and monitor adherence to the Risk Appetite Statement and supporting risk tolerance levels via a series of established metrics; and evaluate, monitor and oversee the adequacy and effectiveness of the Risk Management Framework and Risk Appetite Framework and Statement. 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 and the Compensation, Nominations and Governance Committee for the review of financial statements and related risks, compensation risk management and other areas of joint 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.

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 probability of obligor default (“PD”), loss given default (“LGD”), and/or overall credit rating using scorecards developed to rate each type of transaction incorporating assessments of both quantitative and qualitative factors. 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.

Our ALLL estimate as of March 31, 2025 included extensive reviews of the changes in credit risk associated with the uncertainties around macroeconomic forecasts. These loss estimates consider industry risk and the actual net losses incurred during prior periods of economic stress as well as recent credit trends.

Our ALLL methodology was 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.

Allowance for Loan and Lease Losses

The ALLL at March 31, 2025 was $1.68 billion, representing an increase of $4 million from December 31, 2024. The ALLL as a percentage of total loans and leases at March 31, 2025 was 1.19%, compared to 1.20% at December 31, 2024. The increase in the ALLL at March 31, 2025 compared to December 31, 2024 was primarily due to modest deterioration in the macroeconomic forecast, as well as increases in loan volume, partially offset by the result of a mix shift from the investor dependent portfolio to the global fund banking portfolio, which has a lower loss rate relative to our other loan portfolios, and lower specific reserves for individually evaluated loans. The reserve release in the Linked Quarter was primarily due to lower specific reserves, partially offset by increases in loan volume.

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 unemployment, gross domestic product, home price index, CRE index, corporate profits, and credit spreads, utilized in the ALLL models. These economic variables are based on macroeconomic scenario forecasts with a forecast horizon that covers the lives of the loan portfolios. In addition, during the first quarter of 2025, economic uncertainty increased due to the potential impacts of new trade and other economic policies in the United States, including tariffs. 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. At March 31, 2025, ALLL estimates in these scenarios ranged from approximately $1.42 billion, when weighing the upside scenario 100%, to approximately $2.17 billion when weighting the downside scenario 100%. BancShares management determined that an ALLL of $1.68 billion was appropriate as of March 31, 2025.

Table 31

ALLL for Loans and Leases


dollars in millions	Three Months Ended March 31, 2025
	Commercial			Consumer			SVB			Total
Balance at beginning of period	$	1,063		$	158		$	455		$	1,676


Provision for loan and lease losses	105			10			33			148

Charge-offs	(105)			(8)			(54)			(167)
Recoveries	15			3			5			23

Balance at end of period	$	1,078		$	163		$	439		$	1,680
Net charge-off ratio										0.41		%
Net charge-offs	$	90		$	5		$	49		$	144
Average loans										$	140,780
Percent of loans in each category to total loans	51		%	20		%	29		%	100		%

	Three Months Ended December 31, 2024
	Commercial			Consumer			SVB			Total
Balance at beginning of period	$	1,076		$	150		$	452		$	1,678


Provision for loan and lease losses	95			13			50			158

Charge-offs	(120)			(9)			(64)			(193)
Recoveries	12			4			17			33

Balance at end of period	$	1,063		$	158		$	455		$	1,676
Net charge-off ratio										0.46		%
Net charge-offs	$	108		$	5		$	47		$	160
Average loans										$	139,641
Percent of loans in each category to total loans	51		%	20		%	29		%	100		%

	Three Months Ended March 31, 2024
	Commercial			Consumer			SVB			Total
Balance at beginning of period	$	1,126		$	166		$	455		$	1,747


Provision (benefit) for loan and lease losses	59			(6)			40			93

Charge-offs	(75)			(7)			(46)			(128)
Recoveries	10			2			13			25

Balance at end of period	$	1,120		$	155		$	462		$	1,737
Net charge-off ratio										0.31		%
Net charge-offs	$	65		$	5		$	33		$	103
Average loans										$	133,703
Percent of loans in each category to total loans	50		%	21		%	29		%	100		%

Net charge-offs during the Current Quarter were $144 million, a decrease of $16 million from $160 million during the Linked Quarter. The lower net charge-offs within commercial loans were primarily related to decreased net charge-offs in the equipment finance portfolio.

The following table provides trends in the ALLL ratios:

Table 32

ALLL Ratios


dollars in millions	March 31, 2025			December 31, 2024
ALLL	$	1,680		$	1,676
Total loans and leases	$	141,358		$	140,221
ALLL to total loans and leases	1.19		%	1.20		%
Commercial loans and leases:
ALLL - commercial	$	1,078		$	1,063
Commercial loans and leases	$	72,540		$	71,799
Commercial ALLL to commercial loans and leases	1.49		%	1.48		%
Consumer loans:
ALLL - consumer	$	163		$	158
Consumer loans	$	28,147		$	28,228
Consumer ALLL to consumer loans	0.58		%	0.56		%
SVB loans:
ALLL - SVB	$	439		$	455
SVB loans	$	40,671		$	40,194
SVB ALLL to SVB loans	1.08		%	1.13		%

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 PD and LGD models to those expected funding amounts to estimate the reserve. The reserve for off-balance sheet credit exposure was $284 million at March 31, 2025, an increase of $6 million compared to $278 million at December 31, 2024. The increase from December 31, 2024 primarily reflects changes in the unfunded commitments. Refer to Note 18—Commitments and Contingencies for information relating to off-balance sheet commitments.

The following table presents the ALLL by loan class:

Table 33

ALLL by Loan Class


dollars in millions	March 31, 2025				December 31, 2024
	ALLL		ALLL as a Percentage of Loans			ALLL		ALLL as a Percentage of Loans
Commercial
Commercial construction	$	61	1.10	%		$	53	1.03	%
Owner occupied commercial mortgage	54		0.32			51		0.30
Non-owner occupied commercial mortgage	331		2.05			340		2.10
Commercial and industrial	596		1.87			583		1.84
Leases	36		1.79			36		1.80
Total commercial	1,078		1.49			1,063		1.48
Consumer
Residential mortgage	87		0.38			85		0.37
Revolving mortgage	23		0.87			21		0.83
Consumer auto	9		0.60			5		0.35
Consumer other	44		4.59			47		4.75
Total consumer	163		0.58			158		0.56
SVB
Global fund banking	75		0.26			75		0.27
Investor dependent - early stage	72		7.92			87		8.71
Investor dependent - growth stage	104		5.10			108		4.91
Innovation C&I and cash flow dependent	188		2.05			185		2.03



Total SVB	439		1.08			455		1.13
Total ALLL	$	1,680	1.19	%		$	1,676	1.20	%

Credit Metrics

Nonperforming Assets

Nonperforming assets include nonaccrual loans and leases, 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.

The following table presents total nonperforming assets:

Table 34

Non-Performing Assets


dollars in millions	March 31, 2025			December 31, 2024
Nonaccrual loans:
Commercial loans	$	838		$	812
Consumer loans	196			181
SVB loans	172			191
Total nonaccrual loans	1,206			1,184
Other real estate owned and repossessed assets	105			64
Total nonperforming assets	$	1,311		$	1,248

ALLL to total loans and leases	1.19		%	1.20		%
Ratio of total nonperforming assets to total loans, leases, other real estate owned and repossessed assets	0.93			0.89
Ratio of nonaccrual loans and leases to total loans and leases	0.85			0.84
Ratio of ALLL to nonaccrual loans and leases	139.25			141.58

Nonaccrual loans and leases at March 31, 2025 were $1.21 billion, an increase of $22 million from $1.18 billion at December 31, 2024. The increase from December 31, 2024 was mainly due to higher nonaccrual loans in the commercial and industrial, owner occupied commercial mortgage, and residential mortgage portfolios, partially offset by lower nonaccrual loans in the commercial real estate and investor dependent portfolios. Refer to the “CRE Portfolio” discussion below for further information and Note 4—Loans and Leases for tabular presentation of nonaccrual loans by loan class.

OREO and repossessed assets at March 31, 2025 and December 31, 2024 were $105 million and $64 million, respectively. The increase reflects additional properties. Nonperforming assets as a percentage of total loans, leases, OREO and repossessed assets at March 31, 2025 and December 31, 2024 were 0.93% and 0.89%, respectively.

Past Due Accounts

Accruing loans 30 days or more past due were 0.73% and 0.54% of total loans at March 31, 2025 and December 31, 2024, respectively. 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 as of March 31, 2025 and December 31, 2024:

Table 35

Commercial Real Estate Portfolio (1)


dollars in millions	March 31, 2025				December 31, 2024
	Balance		% to Total Loans and Leases			Balance		% to Total Loans and Leases
Multi-Family	$	4,465	3.16	%		$	4,647	3.31	%
Medical Office	3,738		2.64			3,730		2.66
Industrial/Warehouse	3,632		2.57			3,604		2.57
General Office	2,376		1.68			2,476		1.77
Retail	1,862		1.32			1,863		1.33
Healthcare	1,277		0.90			1,162		0.83
Hotel/Motel	861		0.61			876		0.62
Other	5,173		3.66			4,559		3.25
Total	$	23,384	16.54	%		$	22,917	16.34	%

(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. Select metrics specific to our general office loan portfolio are as follows:

Table 36

Select General Office Loan Metrics


dollars in millions	March 31, 2025			December 31, 2024
% of total loans and leases	1.68		%	1.77		%
% of CRE loans	10.16		%	10.81		%
Average loan balance	$	2		$	2
Net charge-offs (YTD annualized %)	4.77		%	3.95		%
Delinquencies as a % of general office loans	11.08		%	10.92		%
Non-performing loans as a % of general office loans	10.87		%	12.10		%
ALLL ratio	4.35		%	4.59		%

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, SVB portfolio loans are 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, consumer, and SVB loan portfolios is summarized below.

Commercial Loan Concentrations

Geographic Concentrations

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

Table 37

Commercial Loans and Leases - Geography


dollars in millions	March 31, 2025				December 31, 2024
State
California	$	15,334	21.2	%		$	15,119	21.1	%
North Carolina	10,643		14.7			10,709		14.9
Texas	4,570		6.3			4,487		6.3
Florida	4,367		6.0			4,314		6.0
South Carolina	3,651		5.0			3,733		5.2
All other states	32,096		44.2			31,695		44.1
Total U.S.	$	70,661	97.4	%		$	70,057	97.6	%
Total International	1,879		2.6			1,742		2.4
Total	$	72,540	100.0	%		$	71,799	100.0	%

Industry Concentrations

The following table represents loans by industry of obligor:

Table 38

Commercial Loans and Leases - Industry


dollars in millions	March 31, 2025				December 31, 2024
Real Estate	$	18,198	25.1	%		$	17,898	24.9	%
Healthcare	10,178		14.0			10,247		14.3
Business Services	8,294		11.5			8,173		11.4
Transportation, Communication, Gas, Utilities	5,946		8.2			5,928		8.3
Manufacturing	5,904		8.1			5,966		8.3
Service Industries	4,135		5.7			4,124		5.7
Retail	3,934		5.4			3,740		5.2
Wholesale	3,299		4.6			3,252		4.5
Finance and Insurance	3,059		4.2			3,051		4.3
Other	9,593		13.2			9,420		13.1
Total	$	72,540	100.0	%		$	71,799	100.0	%

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% based on customer address:

Table 39

Consumer Loans - Geography


dollars in millions	March 31, 2025				December 31, 2024
State
California	$	8,450	30.0	%		$	8,655	30.7	%
North Carolina	6,965		24.7			6,923		24.5
South Carolina	3,618		12.9			3,607		12.8
Massachusetts	1,678		6.0			1,692		6.0
Other states	7,436		26.4			7,351		26.0
Total	$	28,147	100.0	%		$	28,228	100.0	%

SVB Loans

SVB loan concentrations may exist when there are borrowers engaged in similar activities or types of loans extended to a diverse group of borrowers that could cause those borrowers or portfolios to be similarly impacted by economic or other conditions.

The SVB portfolio includes global fund banking and innovation banking loans.

Global Fund Banking

The global fund banking loan portfolio includes loans to clients in the private equity and venture capital community. Global fund banking represented 70% of SVB loans and 20% of total loans at March 31, 2025, compared to 69% and 20%, respectively, at December 31, 2024. The vast majority of this portfolio consists of capital call lines of credit, the repayment of which is dependent on the payment of capital calls by the underlying limited partner investors in the funds managed by these firms. These facilities are generally governed by financial covenants oriented towards ensuring that the funds’ remaining callable capital is sufficient to repay the loan, and larger commitments (typically provided to larger private equity funds) are typically secured by an assignment of the general partner's right to call capital from the fund's limited partner investors.

Innovation Banking

Innovation banking primarily includes loans to technology, life science and healthcare industry clients in the various stages of their life cycles. The loans are classified as investor dependent - early stage, investor dependent - growth stage, and innovation commercial and industrial (“innovation C&I”) and cash flow dependent for reporting purposes.

Investor Dependent - Early Stage loans represented 2% of SVB loans and 1% of total loans at March 31, 2025 and December 31, 2024. These include loans to pre-revenue, development-stage companies and companies that are in the early phases of commercialization, with revenues of up to $5 million. Repayment of these loans may be dependent upon receipt by borrowers of additional equity financing from venture capital firms or other investors, or in some cases, a successful sale to a third-party or an initial public offering.

Investor Dependent - Growth Stage loans represented 5% of SVB loans and 1% of total loans at March 31, 2025, compared to 5% and 2%, respectively, at December 31, 2024. These include loans to growth-stage enterprises. Companies with revenues between $5 million and $15 million, or pre-revenue clinical-stage biotechnology companies, are considered to be mid-stage, and companies with revenues in excess of $15 million are considered to be later-stage.

Innovation C&I and Cash Flow Dependent loans represented 23% of SVB loans and 7% of total loans at March 31, 2025, compared to 23% and 6%, respectively, at December 31, 2024. This portfolio is comprised of two types of loans, innovation C&I and cash flow dependent. Innovation C&I includes loans in innovation sectors such as technology, life science and healthcare industries. These loans are dependent on either the borrower’s cash flows or balance sheet for repayment. Cash flow dependent loans are typically used to assist a select group of private equity sponsors with the acquisition of businesses, and repayment is generally dependent upon the cash flows of the combined entities.

The following table provides a summary of SVB loans by size and class. The breakout below is based on total client balances (individually or in the aggregate) as of March 31, 2025:

Table 40

SVB Loans by Size and Class


dollars in millions	Less Than $10 Million		$10 to < $30 Million		> $30 Million		Total SVB Loans
Global fund banking	$	2,136	$	4,773	$	21,663	$	28,572
Investor dependent - early stage	828		80		—		908
Investor dependent - growth stage	1,110		647		293		2,050
Innovation C&I and cash flow dependent	424		1,513		7,204		9,141
Total	$	4,498	$	7,013	$	29,160	$	40,671

SVB Loans - State Concentrations

The following table summarizes state concentrations greater than 5.0% within the SVB loans portfolio based on borrower location:

Table 41

SVB Loans - Geography


dollars in millions	March 31, 2025				December 31, 2024
State
California	$	9,970	24.5	%		$	9,372	23.3	%
New York	6,931		17.0			7,180		17.9
Massachusetts	4,359		10.7			4,691		11.7
Connecticut	4,176		10.3			4,061		10.1
Texas	3,706		9.1			3,972		9.9
Illinois	2,257		5.6			1,966		4.9
All other states	8,331		20.5			8,159		20.2
Total U.S.	39,730		97.7			39,401		98.0
Total International	941		2.3			793		2.0
Total	$	40,671	100.0	%		$	40,194	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.

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 indexed to SOFR. 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, 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 42

Net Interest Income Sensitivity Simulation Analysis


	Estimated (Decrease) Increase in NII
Change in interest rate (bps)	March 31, 2025		December 31, 2024
-200	(11.4)	%	(10.6)	%
-100	(6.1)		(6.1)
+100	5.9		6.9
+200	12.3		11.1

NII Sensitivity metrics at March 31, 2025, compared to December 31, 2024, were primarily affected by cash increase from deposit growth and the Current Quarter Debt Issuances, as well as impacts from changes in forward rate curve expectations, partially offset by additional execution of cash flow hedges.

As of March 31, 2025, BancShares continues to have an asset sensitive interest rate risk profile and the potential exposure to forecasted earnings was largely due to the composition of the balance sheet (primarily due to floating rate commercial loans and cash), as well as estimates of modest future deposit betas. Approximately 64% of our loans have floating contractual reference rates, indexed primarily to SOFR and the U.S. prime rate. Deposit betas are currently modeled to have a portfolio average of approximately 35%-45% over the twelve-month forecast horizon, including 50%-60% for interest-bearing non-maturity deposits. Deposit beta is the portion of a change in the federal funds rate that is passed on to the deposit rate. Actual deposit betas may be different than modeled, depending on various factors, including liquidity requirements, deposit mix and competitive pressures. Impacts to NII Sensitivity may change due to actual results differing from modeled expectations.

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

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

Table 43

Economic Value of Equity Modeling Analysis


	Estimated Increase (Decrease) in EVE
Change in interest rate (bps)	March 31, 2025		December 31, 2024
-200	3.2	%	5.4	%
-100	2.5		3.1
+100	(2.9)		(3.2)
+200	(5.5)		(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 44

Loan Maturity Distribution


dollars in millions	At March 31 2025, Maturing
	Within One Year		One to Five Years		Five to 15 Years		After 15 Years		Total
Commercial
Commercial construction	$	1,610	$	3,129	$	745	$	45	$	5,529
Owner occupied commercial mortgage	1,990		7,826		6,693		442		16,951
Non-owner occupied commercial mortgage	3,719		9,442		2,144		834		16,139
Commercial and industrial	8,612		17,732		4,516		1,039		31,899
Leases	641		1,300		81		—		2,022
Total commercial	16,572		39,429		14,179		2,360		72,540
Consumer
Residential mortgage	962		2,818		7,597		11,683		23,060
Revolving mortgage	69		187		966		1,413		2,635
Consumer auto	336		1,022		129		—		1,487
Consumer other	304		529		124		8		965
Total consumer	1,671		4,556		8,816		13,104		28,147
SVB
Global fund banking	26,357		2,067		148		—		28,572
Investor dependent - early stage	133		775		—		—		908
Investor dependent - growth stage	203		1,847		—		—		2,050
Innovation and cash flow dependent	1,375		7,499		267		—		9,141
Total SVB	28,068		12,188		415		—		40,671
Total loans and leases	$	46,311	$	56,173	$	23,410	$	15,464	$	141,358

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 March 31, 2025:

Table 45

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	$	1,342	$	2,577
Owner occupied commercial mortgage	13,265		1,696
Non-owner occupied commercial mortgage	6,300		6,120
Commercial and industrial	10,123		13,164
Leases	1,372		9
Total commercial	32,402		23,566
Consumer
Residential mortgage	8,708		13,390
Revolving mortgage	29		2,537
Consumer auto	1,151		—
Consumer other	280		381
Total consumer	10,168		16,308
SVB
Global fund banking	2		2,213
Investor dependent - early stage	19		756
Investor dependent - growth stage	4		1,843
Innovation and cash flow dependent	—		7,766
Total SVB	25		12,578
Total loans and leases	$	42,595	$	52,452

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 March 31, 2025 we had $62.79 billion of high-quality liquid assets (27.4% of total assets) and $22.25 billion of contingent liquidity sources available. The higher available cash level presented below was due in part from funds received in connection with the Current Quarter Debt Issuances in March 2025. 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. We are actively working to increase our borrowing capacity under agreements with the FRB through expansion of the eligible loan population to targeted loans historically not pledged to the FRB.

Table 46

Liquidity


dollars in millions	March 31, 2025			December 31, 2024
Available cash	$	23,769		$	20,545
High-quality liquid securities (1)	39,018			38,794
High-quality liquid assets	$	62,787		$	59,339

Credit Facilities:	Current Capacity(2)			Current Capacity(2)
FHLB facility (3)	$	16,542		$	16,423
FRB facility	5,612			5,475
FDIC facility (4)	—			5,291
Line of credit	100			100
Total contingent sources	$	22,254		$	27,289
Total liquid assets and contingent sources	$	85,041		$	86,628
Total uninsured deposits	$	58,063		$	59,510
Coverage ratio of total liquid assets and contingent sources to uninsured deposits	146		%	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 March 31, 2025 and December 31, 2024.

(3) Refer to Table 47 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 March 31, 2025 were $159.33 billion, an increase of $4.10 billion or 3% 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 March 31, 2025 were $38.41 billion, an increase of $1.36 billion from $37.05 billion at December 31, 2024. The increase is primarily due to the Current Quarter Debt Issuances with aggregate principal amounts totaling $1.25 billion, as detailed in the “Interest-bearing Liabilities—Borrowings” section in this MD&A and referenced above. We continually monitor our capital needs and market conditions in an effort to diversify our borrowing base 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 47

FHLB Balances


dollars in millions	March 31, 2025		December 31, 2024

Total borrowing capacity	$	17,992	$	17,873
Less:
Advances	—		—
Letters of credit (1)	1,450		1,450
Available capacity	$	16,542	$	16,423
Pledged Non-PCD loans	$	30,112	$	30,421

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

FRB Capacity

Under borrowing arrangements with the FRB, FCB has access to $5.61 billion on a secured basis. There were no outstanding borrowings with the FRB Discount Window at March 31, 2025 and December 31, 2024.

FDIC Credit Facility

FCB and the FDIC entered into the Advance Facility Agreement, dated as of March 27, 2023, and effective as of November 20, 2023, providing total advances available through March 27, 2025 of up to $70 billion solely to provide liquidity to offset deposit withdrawal or runoff of former SVBB deposit accounts and to fund the unfunded commercial lending commitments acquired in the SVBB Acquisition. There were no amounts outstanding at the end of the draw period on March 27, 2025.

Refer to Note 2—Business Combinations for further discussion.

Contractual Obligations and Commitments

The following table includes significant contractual obligations and commitments as of March 31, 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 48

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 (1)	$	11,641	$	308	$	46	$	—	$	11,995
Short-term borrowings	450		—		—		—		450
Long-term borrowings (1)(2)	(39)		36,310		349		1,336		37,956
Total contractual obligations	$	12,052	$	36,618	$	395	$	1,336	$	50,401
Commitments:
Financing commitments	$	29,703	$	14,719	$	1,529	$	6,563	$	52,514
Letters of credit	1,752		619		23		10		2,404
Deferred purchase agreements	1,602		—		—		—		1,602
Purchase and funding commitments	119		—		—		—		119
Affordable housing partnerships (1)	599		549		34		52		1,234
Total commitments	$	33,775	$	15,887	$	1,586	$	6,625	$	57,873

(1) Time deposits and long-term borrowings are presented net of purchase accounting adjustments of $1 million and $116 million, respectively. On-balance sheet commitments for affordable housing partnerships are included in other liabilities and presented net of a purchase accounting adjustment of $28 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 48, 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.

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 of 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 Gross Domestic Product growth trends for the markets the equipment serves, as well as the more immediate conditions of those markets. Cyclicality in the economy and shifts in trade flows due to specific events represent risks to the earnings that can be realized by these businesses. 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.

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.

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 quarter of 2025, we paid quarterly dividends of $1.95 per share on the Class A common stock and Class B common stock. In April 2025, the Board declared a quarterly dividend on the Class A common stock and Class B common stock of $1.95 per common share. The dividends are payable on June 16, 2025 to stockholders of record as of May 30, 2025.

During the first quarter 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 April 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 June 16, 2025.

Capital Composition and Ratios

As discussed earlier in this MD&A, the Board authorized a Class A common stock SRP in July 2024. During the Current Quarter, we repurchased 302,683 shares. Refer to the “Recent Events” section above for more information and Item 5. Market for Registrants Common Equity for additional information related to our monthly repurchase activity during the Current Quarter.

The following table details the change in outstanding Class A common stock through March 31, 2025. Refer to Note 12—Stockholders' Equity for additional information.

Table 49

Changes in Shares of Class A Common Stock Outstanding


												Three Months Ended March 31, 2025
Class A common stock shares outstanding at beginning of period												12,712,436
Shares repurchased under authorized repurchase plan												(302,683)

Class A common stock shares outstanding at end of period												12,409,753

We also had 1,005,185 Class B common stock outstanding at March 31, 2025 and December 31, 2024.

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

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

Table 50

Analysis of Capital Adequacy


dollars in millions	Basel III Requirements		PCA Well Capitalized Thresholds		March 31, 2025						December 31, 2024
					Amount		Ratio		Adjusted Ratio (1)			Amount		Ratio		Adjusted Ratio (1)
BancShares
Risk-based capital ratios
Total risk-based capital	10.50	%	10.00	%	$	25,071	15.23	%	14.49	%		$	24,610	15.04	%	14.27	%
Tier 1 risk-based capital	8.50		8.00		21,970		13.35		12.70			22,137		13.53		12.84
Common equity Tier 1	7.00		6.50		21,089		12.81		12.19			21,256		12.99		12.33
Tier 1 leverage ratio	4.00		5.00		21,970		9.75		n/a (2)			22,137		9.90		n/a (2)

FCB
Risk-based capital ratios
Total risk-based capital	10.50	%	10.00	%	$	23,758	14.45	%	13.74	%		$	23,975	14.66	%	13.91	%
Tier 1 risk-based capital	8.50		8.00		21,682		13.18		12.54			21,852		13.37		12.68
Common equity Tier 1	7.00		6.50		21,682		13.18		12.54			21,852		13.37		12.68
Tier 1 leverage ratio	4.00		5.00		21,682		9.63		n/a (2)			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.

As of March 31, 2025, BancShares and FCB had risk-based capital ratio conservation buffers of 7.23% and 6.45%, 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 March 31, 2025 and December 31, 2024 over the Basel III minimum for the applicable ratio. Additional Tier 1 capital for BancShares includes perpetual preferred stock.

Additional Tier 2 capital for BancShares and FCB primarily consists of qualifying ALLL and qualifying subordinated debt.

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 asset (“RWA”) assumptions permissible for Covered Assets (as defined in Note 2—Business Combinations). 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 will not be 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 March 31, 2025 and December 31, 2024 when both including and excluding the impact of the Shared Loss Agreement to illustrate the expected 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.

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— Allowance for Loan and Lease Losses” 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 (“FASB”) but are not yet effective for BancShares:


Standard	Summary of Guidance	Effect on BancShares’ Financial Statements
ASU No. 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.
ASU No. 2024-03 - Income Statement -Reporting Comprehensive Income - Expense Disaggregation Disclosures 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 and the guidance can be applied prospectively or retrospectively. We are currently evaluating the impact of this ASU on our 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.

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 51

PPNR


dollars in millions	Three Months Ended March 31, 2025
	General Bank		Commercial Bank		SVB Commercial		Rail		Corporate		Total BancShares
Net income (GAAP)	$	253	$	43	$	166	$	22	$	(1)	$	483
Plus: provision for credit losses	46		85		23		—		—		154
Plus: income tax expense (benefit)	88		15		57		8		—		168
PPNR (non-GAAP)	$	387	$	143	$	246	$	30	$	(1)	$	805

	Three Months Ended December 31, 2024
	General Bank		Commercial Bank		SVB Commercial		Rail		Corporate		Total BancShares
Net income (GAAP)	$	286	$	88	$	181	$	31	$	114	$	700
Plus: provision for credit losses	22		90		43		—		—		155
Plus: income tax expense (benefit)	92		22		58		9		(145)		36
PPNR (non-GAAP)	$	400	$	200	$	282	$	40	$	(31)	$	891

	Three Months Ended March 31, 2024
	General Bank		Commercial Bank		SVB Commercial		Rail		Corporate		Total BancShares
Net income (GAAP)	$	201	$	118	$	193	$	31	$	188	$	731
Plus: provision for credit losses	21		20		23		—		—		64
Plus: income tax expense	79		42		75		11		66		273
PPNR (non-GAAP)	$	301	$	180	$	291	$	42	$	254	$	1,068

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 52

Commercial Bank Segment


dollars in millions		Three Months Ended
		March 31, 2025		December 31, 2024		March 31, 2024
Rental income on operating leases (GAAP)		$	56	$	55	$	57
Less: depreciation on operating lease equipment	a	44		44		46

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

Total noninterest income (GAAP)	b	$	125	$	156	$	140
Noninterest income, net of depreciation (non-GAAP)	b-a	81		112		94
Total revenue (GAAP)	c	418		463		440
Revenue, net of depreciation (non-GAAP)	c-a	374		419		394
Total noninterest expense (GAAP)	d	275		263		260
Noninterest expense, net of depreciation (non-GAAP)	d-a	231		219		214

Table 53

Rail Segment


dollars in millions		Three Months Ended
		March 31, 2025		December 31, 2024		March 31, 2024
Rental income on operating leases (GAAP)		$	214	$	217	$	198
Less: depreciation on operating lease equipment	a	54		57		50
Less: maintenance and other operating lease expenses	b	58		55		45
Net rental income on operating lease equipment (non-GAAP)		$	102	$	105	$	103

Total noninterest income (GAAP)	c	$	216	$	223	$	202
Noninterest income, net of depreciation and maintenance (non-GAAP)	c-a-b	104		111		107
Total revenue (GAAP)	d	164		173		159
Revenue, net of depreciation and maintenance (non-GAAP)	d-a-b	52		61		64
Total noninterest expense (GAAP)	e	134		133		117
Noninterest expense, net of depreciation and maintenance (non-GAAP)	e-a-b	22		21		22

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 54

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


dollars in millions		Three Months Ended
		March 31, 2025			December 31, 2024			March 31, 2024
NII (GAAP)	a	$	1,663		$	1,709		$	1,817
Loan PAA	b	84			90			163
Other PAA	c	(9)			(8)			(4)
PAA	d = (b+c)	75			82			159
NII, excluding PAA (non-GAAP)	e = (a-d)	$	1,588		$	1,627		$	1,658
Annualized NII	f = a annualized	$	6,744		$	6,798		$	7,308
Annualized NII, excluding PAA	g = e annualized	6,439			6,472			6,670
Average interest-earning assets	h	$	206,028		$	204,779		$	198,587
NIM (GAAP)	f/h	3.26		%	3.32		%	3.67		%
NIM, excluding PAA (non-GAAP)	g/h	3.12			3.16			3.35

Interest and fees on loans (GAAP)		$	2,236		$	2,322		$	2,354
Less: loan PAA	b	84			90			163
Interest and fees on loans, excluding loan PAA (non-GAAP)		$	2,152		$	2,232		$	2,191

100

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 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 55

Adjusted Risk Based Capital Ratios


		March 31, 2025						December 31, 2024
		BancShares			FCB			BancShares			FCB
Risk-weighted assets (GAAP)	a	$	164,574		$	164,455		$	163,615		$	163,493
Plus: impact of FDIC Shared-Loss Agreement		8,459			8,459			8,813			8,813
Adjusted risk-weighted assets (non-GAAP)	b	$	173,033		$	172,914		$	172,428		$	172,306

Total Risk Based Capital Ratio
Total risk based capital	c	$	25,071		$	23,758		$	24,610		$	23,975
Total risk based capital ratio (GAAP)	c/a	15.23		%	14.45		%	15.04		%	14.66		%
Less: impact of FDIC Shared-Loss Agreement		0.74			0.71			0.77			0.75
Adjusted total risk based capital ratio (non-GAAP)	c/b	14.49		%	13.74		%	14.27		%	13.91		%

CET1 Capital Ratio
CET1 capital	d	$	21,089		$	21,682		$	21,256		$	21,852
CET1 capital ratio (GAAP)	d/a	12.81		%	13.18		%	12.99		%	13.37		%
Less: impact of FDIC Shared-Loss Agreement		0.62			0.64			0.66			0.69
Adjusted CET1 capital ratio (non-GAAP)	d/b	12.19		%	12.54		%	12.33		%	12.68		%

Tier 1 Capital Ratio
Tier 1 capital	e	$	21,970		$	21,682		$	22,137		$	21,852
Tier 1 capital ratio (GAAP)	e/a	13.35		%	13.18		%	13.53		%	13.37		%
Less: impact of FDIC Shared-Loss Agreement		0.65			0.64			0.69			0.69
Adjusted tier 1 capital ratio (non-GAAP)	e/b	12.70		%	12.54		%	12.84		%	12.68		%

101

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 on trading partners), political (including the makeup of the U.S. Congress and Trump administration), 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’ previous acquisition transactions or any future transactions.

BancShares’ SRP allows BancShares to repurchase shares of its Class A common stock through 2025. BancShares is not obligated under the 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 will be utilized at management’s discretion. The actual timing and amount of Class A common stock that may be repurchased will depend on a number of factors, including the terms of any Rule 10-b5-1 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 SEC.

102

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 first quarter of 2025 that have materially affected, or are reasonably likely to materially affect, BancShares’ internal control over financial reporting.

103

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 negotiating 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.

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, 2025. Subsequent to March 31, 2025, BancShares purchased an additional 120,558 shares of Class A common stock through April 30, 2025.

Table 56

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, 2025	93,729	$	2,166.44	93,729	$	1,634
Repurchases from February 1 - 28, 2025	91,274	2,117.76		91,274	1,441
Repurchases from March 1 - 31, 2025	117,680	1,841.20		117,680	1,224
Total	302,683	$	2,025.22	302,683	$	1,224

On July 25, 2024, BancShares announced that the Board authorized an SRP, which allows BancShares to repurchase shares of its Class A common stock in an aggregate amount up to $3.50 billion through December 31, 2025.

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

104

Item 5. Other Information.

During the first 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.

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.
10.1						Termination Agreement dated April 7, 2025, by and between the Federal Deposit Insurance Corporation, as receiver for Silicon Valley Bridge Bank, N.A., and First-Citizens Bank & Trust Company (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed April 7, 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 9, 2025

First Citizens BancShares, Inc.

(Registrant)

By:

/s/ Craig L. Nix

Craig L. Nix

Chief Financial Officer

106