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, 2023
	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 principle 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— 13,514,808 shares

Class B Common Stock— 1,005,185 shares

(Number of shares outstanding, by class, as of April 30, 2023

CONTENTS
Part One — 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 the Unaudited Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	60
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	102
Item 4.	Controls and Procedures	103
Part Two — Other Information:
Item 1.	Legal Proceedings	103
Item 1A.	Risk Factors	103
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	106
Item 6.	Exhibits	107
Signatures		107

2

GLOSSARY OF ABBREVIATIONS AND ACRONYMS

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

Acronym	Definition	Acronym	Definition
ACL	Allowance for Credit Losses	HOA	Home Owner’s Association
AFS	Available for Sale	HQLS	High Quality Liquid Securities
AOCI	Accumulated Other Comprehensive Income	HTM	Held to Maturity
ASC	Accounting Standards Codification	LIBOR	London Inter-Bank Offered Rate
ASU	Accounting Standards Update	LGD	Loss Given Default
BHC	Bank Holding Company	LOCOM	Lower of the Cost or Market Value
BOLI	Bank Owned Life Insurance	MD&A	Management’s Discussion and Analysis
bps	Basis point(s); 1 bp = 0.01%	MSRs	Mortgage Servicing Rights
CAB	Community Association Banking	NCCOB	North Carolina Commissioner of Banks
CCAR	Comprehensive Capital Analysis and Review	NII	Net Interest Income
CECL	Current Expected Credit Losses	NII Sensitivity	Net Interest Income Sensitivity
DPA	Deferred Purchase Agreement	NIM	Net Interest Margin
DTAs	Deferred Tax Assets	OREO	Other Real Estate Owned
ETR	Effective Tax Rate	PAA	Purchase Accounting Adjustments
EVE Sensitivity	Economic Value of Equity Sensitivity	PCA	Prompt corrective action
FASB	Financial Accounting Standards Board	PCAOB	Public Company Accounting Oversight Board
FCB	First-Citizens Bank & Trust Company	PCD	Purchased Credit Deteriorated
FDIC	Federal Deposit Insurance Corporation	PD	Probability of Obligor Default
FHA	Federal Housing Administration	PPP	Paycheck Protection Program
FHC	Financial Holding Company	ROU	Right of Use
FHLB	Federal Home Loan Bank	RSU	Restricted Stock Unit
FOMC	Federal Open Market Committee	SBA	Small Business Administration
FRB	Federal Reserve Bank	SOFR	Secured Overnight Financing Rate
GAAP	Accounting Principles Generally Accepted in the U.S.	TDRs	Troubled Debt Restructuring
GDP	Gross Domestic Product	UPB	Unpaid Principal Balance
HFI	Held for Investment	VIE	Variable Interest Entity

3

PART I

Item 1. Financial Statements

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Balance Sheets (Unaudited)

dollars in millions, except share data	March 31, 2023		December 31, 2022
Assets
Cash and due from banks	$	1,598	$	518
Interest-earning deposits at banks	38,522		5,025
Investment in marketable equity securities (cost of $75 at March 31, 2023 and $75 at December 31, 2022)	85		95
Investment securities available for sale (cost of $9,955 at March 31, 2023 and $9,967 at December 31, 2022), net of allowance for credit losses	9,061		8,995
Investment securities held to maturity (fair value of $8,993 at March 31, 2023 and $8,795 at December 31, 2022)	10,381		10,279
Assets held for sale	94		60
Loans and leases	138,288		70,781
Allowance for credit losses	(1,605)		(922)
Loans and leases, net of allowance for credit losses	136,683		69,859
Operating lease equipment, net	8,331		8,156
Premises and equipment, net	1,743		1,456
Goodwill	346		346
Other intangible assets	364		140
Other assets	7,450		4,369
Total assets	$	214,658	$	109,298
Liabilities
Deposits:
Noninterest-bearing	$	54,649	$	24,922
Interest-bearing	85,401		64,486
Total deposits	140,050		89,408
Credit balances of factoring clients	1,126		995
Borrowings:
Short-term borrowings	1,009		2,186
Long-term borrowings	45,085		4,459
Total borrowings	46,094		6,645
Other liabilities	8,172		2,588
Total liabilities	195,442		99,636
Stockholders’ equity
Preferred stock - $0.01 par value (10,000,000 shares authorized at March 31, 2023 and December 31, 2022)	881		881
Common stock:
Class A - $1 par value (16,000,000 shares authorized at March 31, 2023; 13,514,808 and 13,501,017 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively)	14		14
Class B - $1 par value (2,000,000 shares authorized; 1,005,185 shares issued and outstanding at March 31, 2023 and December 31, 2022)	1		1
Additional paid in capital	4,104		4,109
Retained earnings	14,885		5,392
Accumulated other comprehensive loss	(669)		(735)
Total stockholders’ equity	19,216		9,662
Total liabilities and stockholders’ equity	$	214,658	$	109,298

See accompanying Notes to the Unaudited Consolidated Financial Statements.

4

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	2023		2022
Interest income
Interest and fees on loans	$	1,017	$	621
Interest on investment securities	107		83
Interest on deposits at banks	87		6
Total interest income	1,211		710
Interest expense
Deposits	288		39
Borrowings	73		22
Total interest expense	361		61
Net interest income	850		649
Provision for credit losses	783		464
Net interest income after provision for credit losses	67		185
Noninterest income
Rental income on operating lease equipment	233		208
Fee income and other service charges	50		36
Wealth management services	42		35
Service charges on deposit accounts	24		27
Factoring commissions	19		27
Cardholder services, net	21		25
Merchant services, net	10		10
Insurance commissions	13		12
Realized loss on sale of investment securities available for sale, net	(14)		—
Fair value adjustment on marketable equity securities, net	(9)		3
Bank-owned life insurance	5		8
Gain on sale of leasing equipment, net	4		6
Gain on acquisition	9,824		431
Gain on extinguishment of debt	—		6
Other noninterest income	37		16
Total noninterest income	10,259		850
Noninterest expense
Depreciation on operating lease equipment	89		81
Maintenance and other operating lease expenses	56		43
Salaries and benefits	420		356
Net occupancy expense	50		48
Equipment expense	58		52
Professional fees	12		12
Third-party processing fees	29		24
FDIC insurance expense	18		12
Marketing expense	15		8
Acquisition-related expenses	28		135
Intangible asset amortization	5		6
Other noninterest expense	75		33
Total noninterest expense	855		810
Income before income taxes	9,471		225
Income tax (benefit) expense	(47)		(46)
Net income	$	9,518	$	271
Preferred stock dividends	14		7
Net income available to common stockholders	$	9,504	$	264
Earnings per common share
Basic	$	654.22	$	16.70
Diluted	$	653.64	$	16.70
Weighted average common shares outstanding
Basic	14,526,693		15,779,153
Diluted	14,539,709		15,779,153

See accompanying Notes to the Unaudited Consolidated Financial Statements.

5

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

	Three Months Ended March 31,
dollars in millions	2023		2022
Net income	$	9,518	$	271
Other comprehensive income (loss), net of tax
Net unrealized gain (loss) on securities available for sale	58		(318)
Net change in unrealized loss on securities available for sale transferred to securities held to maturity	—		1
Net change in defined benefit pension items	8		2
Other comprehensive income (loss), net of tax	$	66	$	(315)
Total comprehensive income (loss)	$	9,584	$	(44)

See accompanying Notes to the Unaudited Consolidated Financial Statements.

6

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

	Three Months Ended March 31,
dollars in millions, except share data	Preferred Stock		Class A Common Stock		Class B Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total Stockholders' Equity
Balance at December 31, 2022	$	881	$	14	$	1	$	4,109	$	5,392	$	(735)	$	9,662
Net income	—		—		—		—		9,518		—		9,518
Other comprehensive (loss) income, net of tax	—		—		—		—		—		66		66
Stock based compensation	—		—		—		(5)		—		—		(5)
Cash dividends declared ($0.75 per common share):
Class A common stock	—		—		—		—		(10)		—		(10)
Class B common stock	—		—		—		—		(1)		—		(1)
Preferred stock dividends declared:
Series A	—		—		—		—		(4)		—		(4)
Series B	—		—		—		—		(7)		—		(7)
Series C	—		—		—		—		(3)		—		(3)
Balance at March 31, 2023	$	881	$	14	$	1	$	4,104	$	14,885	$	(669)	$	19,216
Balance at December 31, 2021	$	340	$	9	$	1	$	—	$	4,378	$	10	$	4,738
Net income	—		—		—		—		271		—		271
Other comprehensive (loss) income, net of tax	—		—		—		—		—		(315)		(315)
Issued in CIT Merger:
Common stock	—		6		—		5,273		—		—		5,279
Series B preferred stock	334		—		—		—		—		—		334
Series C preferred stock	207		—		—		—		—		—		207
Stock based compensation	—		—		—		71		—		—		71
Cash dividends declared ( $0.47 per common share):
Class A common stock	—		—		—		—		(7)		—		(7)
Class B common stock	—		—		—		—		—		—		—
Preferred stock dividends declared
Series A	—		—		—		—		(5)		—		(5)
Series C	—		—		—		—		(3)		—		(3)
Balance at March 31, 2022	$	881	$	15	$	1	$	5,344	$	4,634	$	(305)	$	10,570

See accompanying Notes to the Unaudited Consolidated Financial Statements.

7

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended March 31,
dollars in millions	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	9,518	$	271
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Provision for credit losses	783		464
Deferred tax benefit	(69)		(61)
Depreciation, amortization, and accretion, net	124		114
Stock based compensation expense	1		12
Realized loss on sale of investment securities available for sale, net	14		—
Fair value adjustment on marketable equity securities, net	9		(3)
Gain on sale of loans, net	(1)		(3)
Gain on sale of operating lease equipment, net	(4)		(6)
Loss on sale of premises and equipment, net	—		1
Gain on other real estate owned, net	—		(2)
Gain on acquisition	(9,824)		(431)
Gain on extinguishment of debt	—		(6)
Origination of loans held for sale	(82)		(235)
Proceeds from sale of loans held for sale	67