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 June 30, 2026
	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
Depositary Shares, Each Representing a 1/40th Interest in a Share of 6.625% Non-Cumulative Perpetual Preferred Stock, Series E	FCNCN	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—10,287,935 shares

Class B Common Stock—1,005,185 shares

(Number of shares outstanding, by class, as of August 3, 2026)

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)	9
	Notes to Consolidated Financial Statements (Unaudited)	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	56
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	108
Item 4.	Controls and Procedures	108
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	109
Item 1A.	Risk Factors	109
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	109
Item 5.	Other Information	109
Item 6.	Exhibits	110
Signatures		111

2

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
ACL	Allowance for Credit Losses	LGD	Loss Given Default
ALLL	Allowance for Loan and Lease Losses	LOCOM	Lower of Cost or Fair Value
AOCI	Accumulated Other Comprehensive Income	LP	Limited Partner
ASC	Accounting Standards Codification	MD&A	Management’s Discussion and Analysis
ASU	Accounting Standards Update	MSRs	Mortgage Servicing Rights
BHC	Bank Holding Company	NDFI	Non-Depository Financial Institution
bp or bps	Basis point(s); 1 bp = 0.01%	NII	Net Interest Income
CET1	Common Equity Tier 1 Risk-based Capital	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 Income Tax Rate	PAA	Purchase Accounting Accretion or Amortization
EVE Sensitivity	Economic Value of Equity Sensitivity	PAM	Proportional Amortization Method
FCB	First-Citizens Bank & Trust Company	PCA	Prompt Corrective Action
FDIC	Federal Deposit Insurance Corporation	PCD	Purchased Credit Deteriorated
Federal Reserve	Board of Governors of the Federal Reserve System	PD	Probability of Obligor Default
FHLB	Federal Home Loan Bank	PSL	Purchased Seasoned Loan
FRB	Federal Reserve Bank	ROU	Right of Use
GAAP	United States Generally Accepted Accounting Principles	SBA	Small Business Administration
GDP	Gross Domestic Product	SOFR	Secured Overnight Financing Rate
HLBVM	Hypothetical Liquidation at Book Value Method	SRP	Share Repurchase Program
HPI	Home Price Index	UPB	Unpaid Principal Balance
HQLS	High-Quality Liquid Securities	VIE	Variable Interest Entity
ISDA	International Swaps and Derivatives Association

3

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Balance Sheets (Unaudited)

dollars in millions, except share data	June 30, 2026		December 31, 2025
Assets
Cash and due from banks	$	1,519	$	801
Interest-earning deposits at banks	21,132		19,801
Securities purchased under agreements to resell	737		232
Investment in marketable equity securities (cost of $95 at June 30, 2026 and $83 at December 31, 2025)	156		127
Investment securities available for sale (cost of $34,510 at June 30, 2026 and $31,952 at December 31, 2025)	33,983		31,790
Investment securities held to maturity (fair value of $8,214 at June 30, 2026 and $8,491 at December 31, 2025)	9,418		9,647
Assets held for sale	93		804
Loans and leases	151,034		147,930
Allowance for loan and lease losses	(1,484)		(1,566)
Loans and leases, net of allowance for loan and lease losses	149,550		146,364
Operating lease equipment, net	9,755		9,621
Premises and equipment, net	2,523		2,447
Goodwill	346		346
Other intangible assets, net	171		195
Other assets	7,459		7,523
Total assets	$	236,842	$	229,698
Liabilities
Deposits:
Noninterest-bearing	$	42,475	$	40,653
Interest-bearing	130,952		120,925
Total deposits	173,427		161,578
Credit balances of factoring clients	1,339		1,148
Borrowings:
Short-term borrowings	152		224
Long-term borrowings	32,036		35,784
Total borrowings	32,188		36,008
Other liabilities	7,988		8,726
Total liabilities	214,942		207,460
Stockholders’ equity
Preferred stock - $0.01 par value (20,000,000 shares authorized at June 30, 2026 and December 31, 2025)	1,765		1,375
Common stock:
Class A - $1 par value (32,000,000 shares authorized at June 30, 2026 and December 31, 2025; 10,385,222 and 11,133,974 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively)	10		11
Class B - $1 par value (2,000,000 shares authorized and 1,005,185 shares issued and outstanding at June 30, 2026 and December 31, 2025)	1		1
Retained earnings	20,354		20,768
Accumulated other comprehensive (loss) income	(230)		83
Total stockholders’ equity	21,900		22,238
Total liabilities and stockholders’ equity	$	236,842	$	229,698

See accompanying Notes to the Unaudited Consolidated Financial Statements.

4

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Income (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
dollars in millions, except share and per share data	2026		2025		2026		2025
Interest income
Loans and leases	$	2,253	$	2,270	$	4,459	$	4,506
Investment securities	401		419		785		833
Deposits at banks	197		256		393		501
Total interest income	2,851		2,945		5,637		5,840
Interest expense
Deposits	881		894		1,714		1,787
Borrowings	314		356		646		695
Total interest expense	1,195		1,250		2,360		2,482
Net interest income	1,656		1,695		3,277		3,358
(Benefit) provision for credit losses	(10)		115		62		269
Net interest income after provision for credit losses	1,666		1,580		3,215		3,089
Noninterest income
Rental income on operating lease equipment	280		272		561		542
Lending-related fees	73		69		142		135
Deposit fees and service charges	74		59		144		117
Client investment fees	59		52		112		105
Wealth management services	62		55		121		111
International fees	36		33		71		65
Factoring commissions	18		18		35		35
Cardholder services, net	38		41		76		82
Merchant services, net	13		13		26		27
Insurance commissions	13		14		26		28
Fair value adjustment on marketable equity securities, net	15		2		18		(3)
Gain on sale of leasing equipment, net	14		8		25		13
Loss on extinguishment of debt	(7)		—		(15)		—
Other noninterest income	88		42		126		56
Total noninterest income	776		678		1,468		1,313
Noninterest expense
Depreciation on operating lease equipment	101		100		202		198
Maintenance and other operating lease expenses	67		55		132		113
Personnel cost	844		810		1,713		1,628
Net occupancy expense	59		61		119		119
Equipment expense	141		131		277		267
Professional fees	26		30		50		55
Third-party processing fees	100		63		193		126
FDIC insurance expense	39		38		77		76
Marketing expense	45		32		75		64
Acquisition-related expenses	8		38		13		80
Intangible asset amortization	11		13		24		28
Other noninterest expense	110		129		212		239
Total noninterest expense	1,551		1,500		3,087		2,993
Income before income taxes	891		758		1,596		1,409
Income tax expense	219		183		390		351
Net income	$	672	$	575	$	1,206	$	1,058
Preferred stock dividends	32		14		58		29
Net income available to common stockholders	$	640	$	561	$	1,148	$	1,029
Earnings per common share
Basic and diluted	$	55.52	$	42.36	$	97.95	$	76.73
Weighted average common shares outstanding
Basic and diluted	11,535,792		13,237,226		11,729,271		13,405,295

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 June 30,				Six Months Ended June 30,
dollars in millions	2026		2025		2026		2025
Net income	$	672	$	575	$	1,206	$	1,058
Other comprehensive (loss) income, net of tax
Net unrealized (loss) gain on securities available for sale	(133)		89		(272)		328
Net change in defined benefit pension items	(3)		(3)		(5)		(3)
Net unrealized (loss) gain on cash flow hedge derivatives	(22)		(1)		(36)		6
Other comprehensive (loss) income, net of tax	$	(158)	$	85	$	(313)	$	331
Total comprehensive income	$	514	$	660	$	893	$	1,389

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
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 (Loss) Income		Total Stockholders' Equity
Balance at March 31, 2026	$	1,765	$	11	$	1	$	—	$	20,343	$	(72)	$	22,048
Net income	—		—		—		—		672		—		672
Other comprehensive loss, net of tax	—		—		—		—		—		(158)		(158)
Repurchased 298,907 shares of Class A common stock	—		(1)		—		—		(606)		—		(607)
Cash dividends declared ($2.10 per common share):
Class A common stock	—		—		—		—		(21)		—		(21)
Class B common stock	—		—		—		—		(2)		—		(2)
Preferred stock dividends declared:
Series A	—		—		—		—		(4)		—		(4)
Series B	—		—		—		—		(6)		—		(6)
Series C	—		—		—		—		(3)		—		(3)
Series D	—		—		—		—		(9)		—		(9)
Series E	—		—		—		—		(10)		—		(10)
Balance at June 30, 2026	$	1,765	$	10	$	1	$	—	$	20,354	$	(230)	$	21,900
Balance at March 31, 2025	$	881	$	12	$	1	$	1,798	$	19,802	$	(199)	$	22,295
Net income	—		—		—		—		575		—		575
Other comprehensive income, net of tax	—		—		—		—		—		85		85
Repurchased 338,959 shares of Class A common stock	—		—		—		(619)		—		—		(619)
Cash dividends declared ($1.95 per common share):
Class A common stock	—		—		—		—		(24)		—		(24)
Class B common stock	—		—		—		—		(2)		—		(2)
Preferred stock dividends declared:
Series A	—		—		—		—		(4)		—		(4)
Series B	—		—		—		—		(7)		—		(7)
Series C	—		—		—		—		(3)		—		(3)
Balance at June 30, 2025	$	881	$	12	$	1	$	1,179	$	20,337	$	(114)	$	22,296

7

	Six Months Ended
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 Income (Loss)		Total Stockholders' Equity
Balance at December 31, 2025	$	1,375	$	11	$	1	$	—	$	20,768	$	83	$	22,238
Net income	—		—		—		—		1,206		—		1,206
Other comprehensive loss, net of tax	—		—		—		—		—		(313)		(313)
Issuance of Series E preferred stock	390		—		—		—		—		—		390
Repurchased 748,752 shares of Class A common stock	—		(1)		—		—		(1,514)		—		(1,515)
Cash dividends declared ($4.20 per common share):
Class A common stock	—		—		—		—		(44)		—		(44)
Class B common stock	—		—		—		—		(4)		—		(4)
Preferred stock dividends declared:
Series A	—		—		—		—		(9)		—		(9)
Series B	—		—		—		—		(13)		—		(13)
Series C	—		—		—		—		(6)		—		(6)
Series D	—		—		—		—		(20)		—		(20)
Series E	—		—		—		—		(10)		—		(10)
Balance at June 30, 2026	$	1,765	$	10	$	1	$	—	$	20,354	$	(230)	$	21,900
Balance at December 31, 2024	$	881	$	13	$	1	$	2,417	$	19,361	$	(445)	$	22,228
Net income	—		—		—		—		1,058		—		1,058
Other comprehensive income, net of tax	—		—		—		—		—		331		331
Repurchased 641,642 shares of Class A common stock	—		(1)		—		(1,238)		—		—		(1,239)
Cash dividends declared ($3.90 per common share):
Class A common stock	—		—		—		—		(49)		—		(49)
Class B common stock	—		—		—		—		(4)		—		(4)
Preferred stock dividends declared:
Series A	—		—		—		—		(9)		—		(9)
Series B	—		—		—		—		(14)		—		(14)
Series C	—		—		—		—		(6)		—		(6)
Balance at June 30, 2025	$	881	$	12	$	1	$	1,179	$	20,337	$	(114)	$	22,296

See accompanying Notes to the Unaudited Consolidated Financial Statements.

8

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended June 30,
dollars in millions	2026		2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,206	$	1,058
Adjustments to reconcile net income to cash provided by operating activities:
Provision for credit losses	62		269
Deferred tax expense (benefit)	79		(74)
Depreciation, amortization, and accretion, net	336		193
Fair value adjustment on marketable equity securities, net	(18)		3
Gain on sale of loans, net	(8)		(4)
Gain on sale of operating lease equipment, net	(25)		(13)
(Gain) loss on other real estate owned, net	(2)		7
Loss on extinguishment of debt	15		—
Origination of loans held for sale	(681)		(678)
Proceeds from sale of loans held for sale	911		771
Impairment of premises and equipment and other assets	1		5
Net change in other assets	(183)		(241)
Net change in other liabilities	(447)		(290)
Other operating activities	(31)		(49)
Net cash provided by operating activities	1,215		957
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in interest-earning deposits at banks	(1,331)		(4,820)
Purchases of investment securities available for sale	(8,685)		(2,910)
Proceeds from maturities of investment securities available for sale	2,806		2,972
Proceeds from sales of investment securities available for sale	3,427		1,196
Purchases of investment securities held to maturity	(100)		(218)
Proceeds from maturities of investment securities held to maturity	341		282
Net increase in securities purchased under agreements to resell	(505)		(142)
Net increase in loans	(3,968)		(1,320)
Proceeds from sales of loans	1,265		146
Net increase in credit balances of factoring clients	181		127
Purchases of operating lease equipment	(382)		(385)
Proceeds from sales of operating lease equipment	146		124
Purchases of premises and equipment	(243)		(229)
Proceeds from sales of other real estate owned	26		10
Other investing activities	(267)		(272)
Net cash used in investing activities	(7,289)		(5,439)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in time deposits	3,891		(2,010)
Net increase in demand and other interest-bearing deposits	7,955		6,885
Net (decrease) increase in securities sold under agreements to repurchase	(72)		104
Repayment of long-term borrowings	(5,005)		(352)
Net proceeds from issuance of long-term borrowings	1,244		1,242
Issuance of Series E preferred stock	390		—
Repurchase of Class A common stock	(1,505)		(1,231)
Cash dividends paid	(106)		(82)
Other financing activities	—		1
Net cash provided by financing activities	6,792		4,557
Change in cash and due from banks	718		75
Cash and due from banks at beginning of period	801		814
Cash and due from banks at end of period	$	1,519	$	889

9

	Six Months Ended June 30,
dollars in millions	2026		2025
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest	$	2,263	$	2,422
Income taxes	168		171
Significant non-cash investing and financing activities:
Transfers of loans to other real estate	15		54
Transfer of assets from held for investment to held for sale	862		286
Transfer of assets from held for sale to held for investment	55		—
Retained interests in a securitization	18		—
Commitments extended during the period on affordable housing investment credits	32		197

See accompanying Notes to the Unaudited Consolidated Financial Statements.

10

First Citizens BancShares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Nature of Operations

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

BASIS OF PRESENTATION

Principles of Consolidation and Basis of Presentation

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 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, 2025 (the “2025 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. VIEs are legal entities that either do not have sufficient equity to finance their activities without the support from other parties or whose equity investors lack a controlling financial interest. 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 9—Variable Interest Entities for additional information regarding VIEs.

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.

11

SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies are described in the 2025 Form 10-K. There were no material changes to these policies during the six months ended June 30, 2026, other than as described below:

Loan Sales and Securitizations

We periodically sell loans, or transfer loans in securitizations. We recognize the sale or transfer of loans when they are legally isolated from our creditors and the other appropriate accounting criteria are met, including the requirements of Accounting Standards Codification (“ASC”) 860, Transfers and Servicing.

In a securitization, financial assets are transferred into special purpose trusts or entities which could be VIEs. BancShares evaluates whether it will consolidate any VIEs in accordance with ASC 810, Consolidation, which includes an assessment of whether BancShares is the primary beneficiary because it has the power to direct activities that most significantly impact the economic performance of the VIE (“Significant VIE Power”), and bears the obligation to absorb losses of, or holds the right to receive benefits from the VIE that could be potentially significant to the VIE (“Significant VIE Exposure”). If BancShares does not consolidate the purchaser of the loans or the transferee, the loans are removed from the Consolidated Balance Sheets and a gain or loss is recognized in the Consolidated Statements of Income when the sale or securitization transaction is completed. Refer to Note 9—Variable Interest Entities for further discussion.

We may retain the servicing for loans sold, or loans transferred in a securitization. We recognize the servicing assets as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation of our 2025 Form 10-K.

We may retain a portion of the debt securities issued in a securitization (“Retained Interests”). Retained Interests with high credit quality (i.e. generally a credit rating equivalent of AAA or AA) are accounted for in accordance with ASC 320, Investments—Debt Securities as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation of our 2025 Form 10-K. Interest income is recognized based on contractual terms. When changes in prepayments occur, a cumulative catch-up adjustment is recognized in current period earnings for the difference between interest income previously recognized and the amount that would have been recognized under the updated yield since inception. The effective yield is not prospectively adjusted.

Retained Interests that are not of high credit quality are subject to ASC 320, Investments—Debt Securities and ASC 325-40, Beneficial Interests in Securitized Financial Assets. Interest income is recognized based on expected cash flows. Changes in expected prepayments and other noncredit-related cash flows are recognized through prospective yield adjustments. Increases in expected credit losses are recognized through the provision for credit losses with a corresponding increase to the allowance for credit losses (“ACL”). For available for sale Retained Interests, the ACL is limited to the amount by which amortized cost exceeds fair value. Accordingly, any portion of a credit-related decline in expected cash flows that cannot be recognized through the ACL is reflected prospectively as a reduction in yield. Decreases in expected credit losses are recognized through reductions in the ACL and provision for credit losses, not to exceed the amount of the previously recorded ACL, and any further credit-related improvement in expected cash flows increases the prospective yield.

Refer to Note 3—Investment Securities for further discussion.

Newly Adopted Accounting Standards

As of January 1, 2026, BancShares adopted the following Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board:

ASU 2025-08—Financial Instruments — Credit Losses (Topic 326): Purchased Loans, Issued November 2025

Under this ASU, purchased seasoned loans (“PSLs” as described below) must be recognized at the purchase price, plus the ALLL at the acquisition date (the “Gross-Up Approach”). Since the ALLL at the acquisition date is established through the Gross-Up Approach, there is no corresponding increase to the provision for loan and lease losses (“Day 2 Provision for Loan and Lease Losses”).

Prior to this ASU, the Gross-Up Approach was only permitted for purchased credit deteriorated (“PCD”) loans, while the initial ALLL for Non-PCD loans was established through the Day 2 Provision for Loan and Lease Losses. Under this ASU, the Gross-Up Approach applies to PCD loans and the following Non-PCD loans which qualify as PSLs: (i) non-credit card loans acquired in a business combination and (ii) non-credit card loans purchased more than 90 days after origination in a non-business combination transaction, provided the acquirer was not involved in the original lending. This ASU specifically excludes credit card loans from the definition of PSLs. This ASU is required to be applied prospectively upon adoption.

12

We early adopted this ASU as of January 1, 2026 (the “Adoption Date”) on a prospective basis. For PSLs acquired on or after the Adoption Date, this ASU could reduce the Day 2 Provision for Loan and Lease Losses, and the subsequent credit-related loan purchase accounting accretion or amortization that was prevalent for Non-PCD loans acquired prior to the Adoption Date. This ASU did not have a material impact on our consolidated financial statements or related disclosures for the six month period ended June 30, 2026.

ASU 2025-05—Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, Issued July 2025

This ASU provides an optional practical expedient which permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when estimating the ALLL for accounts receivable.

We adopted this ASU as of January 1, 2026. We did not elect the optional practical expedient and adoption of this ASU did not impact our consolidated financial statements or disclosures.

NOTE 2 — BUSINESS COMBINATIONS

Pending Branch Acquisition

On October 16, 2025, FCB announced that it had entered into an agreement to acquire 138 branches from BMO Bank N.A. located throughout the Midwest, Great Plains and West regions of the U.S. (the “BMO Branch Acquisition”). We expect to assume approximately $5.3 billion in deposits and acquire approximately $700 million in loans. We expect the transaction to be completed during the third quarter of 2026.

SVBB Acquisition

On March 27, 2023, 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. from the Federal Deposit Insurance Corporation (the “FDIC” and such transaction, the “SVBB Acquisition”) and FCB issued a five-year $36.07 billion note payable to the FDIC, maturing March 27, 2028, which was amended and restated on November 20, 2023 (the “Purchase Money Note”) and is collateralized by certain loans. Refer to Note 10—Borrowings for the outstanding carrying value of the Purchase Money Note.

13

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	June 30, 2026								December 31, 2025
			Gross Unrealized								Gross Unrealized
	Amortized Cost		Gains		Losses		Fair Value		Amortized Cost		Gains		Losses		Fair Value
Investment securities available for sale
U.S. Treasury	$	13,365	$	6	$	(51)	$	13,320	$	10,624	$	50	$	(1)	$	10,673
Government agency	34		—		(1)		33		44		—		(1)		43
Residential mortgage-backed securities	17,804		71		(375)		17,500		17,683		263		(323)		17,623
Commercial mortgage-backed securities	3,145		7		(180)		2,972		3,444		28		(173)		3,299
Corporate bonds	132		—		(4)		128		145		—		(5)		140
Municipal bonds	12		—		—		12		12		—		—		12
Other	18		—		—		18		—		—		—		—
Total investment securities available for sale	$	34,510	$	84	$	(611)	$	33,983	$	31,952	$	341	$	(503)	$	31,790
Investment in marketable equity securities	$	95	$	62	$	(1)	$	156	$	83	$	44	$	—	$	127
Investment securities held to maturity
U.S. Treasury	$	390	$	—	$	(14)	$	376	$	388	$	—	$	(15)	$	373
Government agency	1,190		—		(55)		1,135		1,225		—		(55)		1,170
Residential mortgage-backed securities	4,311		17		(498)		3,830		4,450		32		(490)		3,992
Commercial mortgage-backed securities	3,279		—		(633)		2,646		3,337		—		(608)		2,729
Supranational securities	247		—		(21)		226		246		—		(20)		226
Other	1		—		—		1		1		—		—		1
Total investment securities held to maturity	$	9,418	$	17	$	(1,221)	$	8,214	$	9,647	$	32	$	(1,188)	$	8,491
Total investment securities	$	44,023	$	163	$	(1,833)	$	42,353	$	41,682	$	417	$	(1,691)	$	40,408

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 (“GNMA”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”). 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.

The Retained SBA Notes (as defined in Note 9—Variable Interest Entities) totaling $18 million are reported in other investment securities available for sale and include $14 million with a credit rating equivalent of AAA or AA. Refer to Note 1—Significant Accounting Policies and Basis of Presentation for discussion of the accounting policies for Retained Interests. Other investment securities held to maturity include certificates of deposit with 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 has elected not to participate in any exchange offers pertaining to its shares of Visa Class B-1 common stock, including the exchange offer Visa commenced on April 13, 2026. 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.

14

Accrued interest receivable for available for sale and held to maturity debt securities was excluded from the estimate for credit losses. At June 30, 2026, accrued interest receivable for available for sale and held to maturity debt securities was $177 million and $19 million, respectively. At December 31, 2025, accrued interest receivable for available for sale and held to maturity debt securities was $157 million and $20 million, respectively. During the three months ended June 30, 2026 and 2025, 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 June 30, 2026 or December 31, 2025.

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, government agency, and other investment securities are stated separately as they are not due at a single maturity date.

Maturities

dollars in millions	June 30, 2026				December 31, 2025
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Investment securities available for sale
Non-amortizing securities maturing in:
One year or less	$	4,486	$	4,489	$	4,893	$	4,914
After one through five years	8,995		8,945		5,853		5,879
After five through 10 years	16		14		23		20
After 10 years	12		12		12		12
Government agency	34		33		44		43
Residential mortgage-backed securities	17,804		17,500		17,683		17,623
Commercial mortgage-backed securities	3,145		2,972		3,444		3,299
Other	18		18		—		—
Total investment securities available for sale	$	34,510	$	33,983	$	31,952	$	31,790
Investment securities held to maturity
Non-amortizing securities maturing in:
One year or less	$	452	$	446	$	307	$	303
After one through five years	1,376		1,292		1,434		1,360
After five through 10 years	—		—		119		107
Residential mortgage-backed securities	4,311		3,830		4,450		3,992
Commercial mortgage-backed securities	3,279		2,646		3,337		2,729
Total investment securities held to maturity	$	9,418	$	8,214	$	9,647	$	8,491

15

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

Interest and Dividends on Investment Securities

dollars in millions	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Interest income - taxable investment securities (1)	$	401	$	418	$	784	$	831
Dividend income - marketable equity securities	—		1		1		2
Interest on investment securities	$	401	$	419	$	785	$	833

(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 June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Gross realized gain on sale of investment securities available for sale	$	12	$	—	$	12	$	1
Gross realized loss on sale of investment securities available for sale	(12)		—		(12)		(2)
Net realized gain (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 Investment Securities Available For Sale

dollars in millions	June 30, 2026
	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	$	9,139	$	(51)	$	—	$	—	$	9,139	$	(51)
Government agency	—		—		33		(1)		33		(1)
Residential mortgage-backed securities	6,898		(49)		2,858		(326)		9,756		(375)
Commercial mortgage-backed securities	665		(3)		1,000		(177)		1,665		(180)
Corporate bonds	8		—		112		(4)		120		(4)
Total	$	16,710	$	(103)	$	4,003	$	(508)	$	20,713	$	(611)
	December 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	$	859	$	(1)	$	—	$	—	$	859	$	(1)
Government agency	—		—		43		(1)		43		(1)
Residential mortgage-backed securities	815		(2)		3,292		(321)		4,107		(323)
Commercial mortgage-backed securities	48		—		1,129		(173)		1,177		(173)
Corporate bonds	—		—		123		(5)		123		(5)
Total	$	1,722	$	(3)	$	4,587	$	(500)	$	6,309	$	(503)

16

As of June 30, 2026, there were 292 investment securities available for sale with continuous unrealized losses for more than 12 months, of which 277 were government sponsored enterprise-issued mortgage-backed securities including GNMA, FHLMC and FNMA, or government agency securities, and the remaining 15 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 June 30, 2026, no ACL 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 ACL was required for investment securities available for sale as of June 30, 2026. We reviewed the underlying credit exposures related to the Retained SBA Notes and determined no ACL was required as of June 30, 2026.

BancShares’ portfolio of held to maturity debt securities consists of mortgage-backed securities issued by government agencies and government sponsored entities including GNMA, FHLMC and FNMA, 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 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, no ACL was required for debt securities held to maturity as of June 30, 2026.

There were no debt securities on nonaccrual status as of June 30, 2026 or December 31, 2025.

Investment securities having an aggregate carrying value of $3.73 billion at June 30, 2026, and $3.89 billion at December 31, 2025, were pledged as collateral to secure public funds on deposit, the Purchase Money Note, 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, investments in qualified affordable housing projects that are accounted for under the proportional amortization method (the “PAM”), and renewable energy tax credit investments that utilize the hypothetical liquidation at book value method (“HLBVM”). Refer to Note 1—Significant Accounting Policies and Basis of Presentation of our 2025 Form 10-K for descriptions of the accounting methodologies.

NOTE 4 — ASSETS HELD FOR SALE

The composition of assets held for sale is summarized in the following table.

dollars in millions	June 30, 2026		December 31, 2025
Loans and leases:
Commercial (1)	$	34	$	18
Consumer	56		781
Loans and leases	90		799
Operating lease equipment	3		5
Total assets held for sale	$	93	$	804

(1) There were nonaccrual loans held for sale of $0 at June 30, 2026 and $10 million at December 31, 2025.

In March 2026, FCB management committed to a plan to sell SBA commercial loans, which were then transferred from held for investment to held for sale. We did not establish a valuation allowance for the loans transferred to held for sale as the estimated fair value exceeded amortized cost. In June 2026, all of the SBA commercial loans held for sale totaling $363 million in amortized cost were sold in the SBA Securitization (as defined in Note 9—Variable Interest Entities) and BancShares recognized a gain of $3 million.

Consumer loans held for sale at June 30, 2026 and December 31, 2025 consisted of residential mortgage loans that FCB originated with the intent to sell. Additionally, consumer loans held for sale at December 31, 2025 were largely comprised of residential mortgage loans that were transferred from held for investment to held for sale in December 2025. We did not establish a valuation allowance for the loans transferred to held for sale as the estimated fair value exceeded the amortized cost. In April 2026, these residential mortgage loans held for sale totaling $644 million in amortized cost were sold and BancShares recognized a gain of $1 million.

17

NOTE 5 — LOANS AND LEASES

Loans held for sale are excluded from loans and leases on the Consolidated Balance Sheets and are included in Note 4—Assets Held for Sale. Finance leases for which we are the lessor are included in the commercial and industrial loan class in the following tables. Refer to Note 7—Leases for further information on leases.

The following table summarizes loans by class:

Loans by Class

dollars in millions	June 30, 2026		December 31, 2025
Commercial
Commercial and industrial	$	46,574	$	44,721
Capital call lines	34,203		31,791
Owner occupied commercial mortgage	17,904		17,660
Investor dependent	2,624		2,778
Commercial real estate	23,233		23,784
Total commercial	124,538		120,734
Consumer
Residential mortgage	21,566		21,861
Revolving mortgage	2,868		2,863
Auto	1,261		1,416
Other consumer	801		1,056
Total consumer	26,496		27,196
Total loans and leases	$	151,034	$	147,930

At June 30, 2026 and December 31, 2025, accrued interest receivable on loans included in other assets was $646 million and $635 million, respectively, and was excluded from the estimate of the ALLL.

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 $55 million and $103 million for the three and six months ended June 30, 2026, including $1 million and $2 million for unfunded commitments, respectively. Discount accretion income was $75 million and $159 million for the three and six months ended June 30, 2025, including $4 million and $12 million for unfunded commitments, respectively.

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	June 30, 2026		December 31, 2025
Deferred fees, including unamortized costs and unearned fees on Non-PCD loans	$	(103)	$	(103)
Net unamortized discount on acquired loans
Non-PCD	$	1,185	$	1,281
PCD	36		45
Total net unamortized discount	$	1,221	$	1,326

18

The aging and nonaccrual status of the outstanding loans and leases by class at June 30, 2026 and December 31, 2025 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)

dollars in millions	June 30, 2026
	Accruing Loans
	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Accruing		Nonaccrual Loans (2)		Total
Commercial
Commercial and industrial	$	139	$	65	$	37	$	241	$	45,835	$	46,076	$	498	$	46,574
Capital call lines	—		—		—		—		34,203		34,203		—		34,203
Owner occupied commercial mortgage	71		14		14		99		17,652		17,751		153		17,904
Investor dependent	2		3		—		5		2,578		2,583		41		2,624
Commercial real estate	26		2		197		225		22,496		22,721		512		23,233
Total commercial	238		84		248		570		122,764		123,334		1,204		124,538
Consumer
Residential mortgage	129		26		7		162		21,208		21,370		196		21,566
Revolving mortgage	25		3		—		28		2,805		2,833		35		2,868
Auto	11		2		—		13		1,238		1,251		10		1,261
Other consumer	5		2		1		8		792		800		1		801
Total consumer	170		33		8		211		26,043		26,254		242		26,496
Total loans and leases	$	408	$	117	$	256	$	781	$	148,807	$	149,588	$	1,446	$	151,034
	December 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 (2)		Total
Commercial
Commercial and industrial	$	232	$	56	$	63	$	351	$	43,914	$	44,265	$	456	$	44,721
Capital call lines	—		—		—		—		31,791		31,791		—		31,791
Owner occupied commercial mortgage	78		19		1		98		17,403		17,501		159		17,660
Investor dependent	11		1		—		12		2,717		2,729		49		2,778
Commercial real estate	221		31		171		423		22,943		23,366		418		23,784
Total commercial	542		107		235		884		118,768		119,652		1,082		120,734
Consumer
Residential mortgage	168		42		7		217		21,465		21,682		179		21,861
Revolving mortgage	25		4		—		29		2,799		2,828		35		2,863
Auto	15		3		—		18		1,389		1,407		9		1,416
Other consumer	5		3		2		10		1,044		1,054		2		1,056
Total consumer	213		52		9		274		26,697		26,971		225		27,196
Total loans and leases	$	755	$	159	$	244	$	1,158	$	145,465	$	146,623	$	1,307	$	147,930

(1)    Accrued interest that was deducted from interest income when the loan was moved to nonaccrual status was $9 million for the six months ended June 30, 2026 and $10 million for the six months ended June 30, 2025.

(2)    Nonaccrual loans for which there was no related ALLL totaled $374 million at June 30, 2026 and $415 million at December 31, 2025. Refer to Note 1—Significant Accounting Policies and Basis of Presentation of our 2025 Form 10-K for discussion of loans individually evaluated to determine the ALLL.

Other real estate owned (“OREO”) and repossessed assets were $116 million as of June 30, 2026 and $124 million as of December 31, 2025.

19

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 June 30, 2026 and December 31, 2025, 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 end of the period. 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.

20

The following tables summarize the commercial 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

June 30, 2026
Risk Classification:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2026		2025		2024		2023		2022		2021 & Prior		Revolving				Total
Commercial and industrial
Pass	$	8,427	$	9,973	$	5,984	$	2,921	$	2,039	$	2,440	$	11,240	$	125	$	43,149
Special Mention	111		171		274		55		82		123		166		—		982
Substandard	138		412		342		169		371		305		325		8		2,070
Doubtful	60		24		16		21		44		15		40		—		220
Ungraded	—		—		—		—		—		—		153		—		153
Total commercial and industrial	8,736		10,580		6,616		3,166		2,536		2,883		11,924		133		46,574
Capital call lines
Pass	—		—		—		—		—		—		34,137		66		34,203
Total capital call lines	—		—		—		—		—		—		34,137		66		34,203
Owner occupied commercial mortgage
Pass	1,585		2,615		2,568		1,995		2,297		5,618		274		28		16,980
Special Mention	20		11		40		29		66		59		1		—		226
Substandard	19		35		89		136		154		253		11		1		698
Doubtful	—		—		—		—		—		—		—		—		—
Total owner occupied commercial mortgage	1,624		2,661		2,697		2,160		2,517		5,930		286		29		17,904
Investor dependent
Pass	378		871		401		32		50		—		308		—		2,040
Special Mention	2		33		20		18		—		—		18		—		91
Substandard	—		164		184		52		1		2		52		—		455
Doubtful	7		21		4		4		—		—		2		—		38
Total Investor dependent	387		1,089		609		106		51		2		380		—		2,624
Commercial real estate
Pass	2,640		4,444		4,252		3,387		2,501		3,587		864		—		21,675
Special Mention	50		134		37		40		28		5		—		—		294
Substandard	236		422		73		186		92		178		1		—		1,188
Doubtful	12		12		21		4		17		9		—		—		75
Ungraded	1		—		—		—		—		—		—		—		1
Total commercial real estate	2,939		5,012		4,383		3,617		2,638		3,779		865		—		23,233
Total commercial
Pass	13,030		17,903		13,205		8,335		6,887		11,645		46,823		219		118,047
Special Mention	183		349		371		142		176		187		185		—		1,593
Substandard	393		1,033		688		543		618		738		389		9		4,411
Doubtful	79		57		41		29		61		24		42		—		333
Ungraded	1		—		—		—		—		—		153		—		154
Total commercial	$	13,686	$	19,342	$	14,305	$	9,049	$	7,742	$	12,594	$	47,592	$	228	$	124,538

21

Consumer Loans - Delinquency Status by Class

June 30, 2026
Days Past Due:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2026		2025		2024		2023		2022		2021 & Prior		Revolving				Total
Residential mortgage
Current	$	948	$	1,512	$	1,546	$	2,301	$	4,581	$	10,368	$	4	$	—	$	21,260
30-59 days	3		3		6		12		26		94		—		—		144
60-89 days	—		—		2		4		7		25		—		—		38
90 days or greater	—		3		5		11		18		87		—		—		124
Total residential mortgage	951		1,518		1,559		2,328		4,632		10,574		4		—		21,566
Revolving mortgage
Current	—		—		—		—		—		—		2,672		144		2,816
30-59 days	—		—		—		—		—		—		21		8		29
60-89 days	—		—		—		—		—		—		—		4		4
90 days or greater	—		—		—		—		—		—		3		16		19
Total revolving mortgage	—		—		—		—		—		—		2,696		172		2,868
Auto
Current	193		392		315		162		113		66		—		—		1,241
30-59 days	—		2		4		3		2		2		—		—		13
60-89 days	—		1		1		1		1		—		—		—		4
90 days or greater	—		1		1		1		—		—		—		—		3
Total consumer auto	193		396		321		167		116		68		—		—		1,261
Other consumer
Current	103		149		64		44		39		13		380		—		792
30-59 days	—		1		—		—		—		—		4		—		5
60-89 days	—		—		—		—		—		—		2		—		2
90 days or greater	—		—		—		—		—		—		2		—		2
Total consumer other	103		150		64		44		39		13		388		—		801
Total consumer	$	1,247	$	2,064	$	1,944	$	2,539	$	4,787	$	10,655	$	3,088	$	172	$	26,496

22

The following tables represent current credit quality indicators by origination year as of December 31, 2025:

Commercial Loans - Risk Classifications by Class

December 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 and industrial
Pass	$	13,484	$	7,906	$	3,552	$	2,963	$	1,428	$	1,539	$	10,143	$	76	$	41,091
Special Mention	213		264		113		97		143		60		181		—		1,071
Substandard	451		296		215		475		347		65		416		5		2,270
Doubtful	18		24		27		35		10		—		32		—		146
Ungraded	—		—		—		—		—		—		143		—		143
Total Commercial and industrial	14,166		8,490		3,907		3,570		1,928		1,664		10,915		81		44,721
Capital call lines
Pass	—		—		—		—		—		—		31,758		33		31,791
Total capital call lines	—		—		—		—		—		—		31,758		33		31,791
Owner occupied commercial mortgage
Pass	2,816		2,739		2,177		2,430		2,290		3,954		248		28		16,682
Special Mention	26		34		49		78		24		27		2		—		240
Substandard	41		55		128		179		88		222		8		3		724
Doubtful	—		4		10		—		—		—		—		—		14
Total owner occupied commercial mortgage	2,883		2,832		2,364		2,687		2,402		4,203		258		31		17,660
Investor dependent
Pass	981		648		110		67		—		—		326		—		2,132
Special Mention	29		78		1		19		—		—		19		—		146
Substandard	104		164		117		14		4		—		50		—		453
Doubtful	13		11		16		5		—		—		2		—		47
Total investor dependent	1,127		901		244		105		4		—		397		—		2,778
Commercial real estate
Pass	5,005		4,720		4,512		2,791		1,614		2,631		732		—		22,005
Special Mention	202		19		139		25		2		31		—		—		418
Substandard	409		249		221		145		70		193		1		—		1,288
Doubtful	29		3		—		18		1		22		—		—		73
Total commercial real estate	5,645		4,991		4,872		2,979		1,687		2,877		733		—		23,784
Total commercial
Pass	22,286		16,013		10,351		8,251		5,332		8,124		43,207		137		113,701
Special Mention	470		395		302		219		169		118		202		—		1,875
Substandard	1,005		764		681		813		509		480		475		8		4,735
Doubtful	60		42		53		58		11		22		34		—		280
Ungraded	—		—		—		—		—		—		143		—		143
Total commercial	$	23,821	$	17,214	$	11,387	$	9,341	$	6,021	$	8,744	$	44,061	$	145	$	120,734

23

Consumer Loans - Delinquency Status by Class

December 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	$	1,601	$	1,609	$	2,512	$	4,783	$	4,715	$	6,295	$	2	$	—	$	21,517
30-59 days	3		4		12		32		32		94		2		—		179
60-89 days	—		1		3		9		3		38		—		—		54
90 days or greater	1		5		6		10		7		82		—		—		111
Total residential mortgage	1,605		1,619		2,533		4,834		4,757		6,509		4		—		21,861
Revolving mortgage
Current	—		—		—		—		—		—		2,686		125		2,811
30-59 days	—		—		—		—		—		—		20		9		29
60-89 days	—		—		—		—		—		—		—		6		6
90 days or greater	—		—		—		—		—		—		3		14		17
Total revolving mortgage	—		—		—		—		—		—		2,709		154		2,863
Auto
Current	504		405		217		157		77		33		—		—		1,393
30-59 days	3		4		3		3		2		1		—		—		16
60-89 days	—		1		1		1		1		—		—		—		4
90 days or greater	—		1		1		1		—		—		—		—		3
Total consumer auto	507		411		222		162		80		34		—		—		1,416
Other consumer
Current	176		100		65		53		15		6		630		—		1,045
30-59 days	1		1		—		—		—		—		4		—		6
60-89 days	—		—		—		—		—		—		2		—		2
90 days or greater	1		—		—		—		—		—		2		—		3
Total consumer other	178		101		65		53		15		6		638		—		1,056
Total consumer	$	2,290	$	2,131	$	2,820	$	5,049	$	4,852	$	6,549	$	3,351	$	154	$	27,196

24

Gross Charge-offs

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

Six Months Ended June 30, 2026
	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2026		2025		2024		2023		2022		2021 & Prior		Revolving				Total
Commercial
Commercial and industrial	$	2	$	15	$	27	$	13	$	35	$	7	$	68	$	1	$	168
Capital call lines	—		—		—		—		—		—		—		—		—
Owner occupied commercial mortgage	—		1		4		—		—		—		—		—		5
Investor dependent	—		7		9		3		6		2		2		—		29
Commercial real estate	20		8		—		—		—		15		—		—		43
Total commercial	22		31		40		16		41		24		70		1		245
Consumer
Residential mortgage	—		—		—		—		—		1		—		—		1
Revolving mortgage	—		—		—		—		—		—		—		—		—
Auto	—		1		1		1		1		—		—		—		4
Other consumer	—		1		1		1		—		—		9		—		12
Total consumer	—		2		2		2		1		1		9		—		17
Total loans and leases	$	22	$	33	$	42	$	18	$	42	$	25	$	79	$	1	$	262

Six Months Ended June 30, 2025
	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2025		2024		2023		2022		2021		2020 & Prior		Revolving				Total
Commercial
Commercial and industrial	$	16	$	13	$	34	$	35	$	8	$	5	$	56	$	1	$	168
Capital call lines	—		—		—		—		—		—		—		—		—
Owner occupied commercial mortgage	—		—		—		—		—		1		—		—		1
Investor dependent	—		6		23		26		6		4		3		—		68
Commercial real estate	—		23		2		17		—		17		—		—		59
Total commercial	16		42		59		78		14		27		59		1		296
Consumer
Residential mortgage	—		—		—		—		—		—		—		—		—
Revolving mortgage	—		—		—		—		—		—		—		—		—
Auto	—		1		1		1		—		—		—		—		3
Other consumer	—		1		1		1		—		—		9		—		12
Total consumer	—		2		2		2		—		—		9		—		15
Total loans and leases	$	16	$	44	$	61	$	80	$	14	$	27	$	68	$	1	$	311

25

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, payment delays, interest rate reductions, 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. Loan modifications for principal forgiveness round to less than $1 million for all loan classes in all periods presented and are not presented in the following tables.

Amortized Cost of Loans Modified during the three months ended June 30, 2026

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 (2)		Total		Percent of Total Loan Class
Commercial
Commercial and industrial	$	167	$	49	$	—	$	1	$	20	$	—	$	237	0.51	%
Owner occupied commercial mortgage	5		3		—		—		1		2		11		0.06
Investor dependent	3		24		—		—		—		—		27		1.05
Commercial real estate	69		—		115		—		—		7		191		0.82
Total commercial	244		76		115		1		21		9		466		0.37
Consumer
Residential mortgage	2		—		1		—		—		—		3		0.01
Revolving mortgage	1		—		—		—		—		—		1		0.02
Auto	—		—		—		—		—		—		—		—
Other consumer	—		—		—		—		—		—		—		0.01
Total consumer	3		—		1		—		—		—		4		0.01
Total loans and leases	$	247	$	76	$	116	$	1	$	21	$	9	$	470	0.31	%

(1) Term extensions include modifications which extended the maturity date or amortization period, and modifications that deferred lump-sum principal payments to a later date.

(2) Consists of $7 million of commercial real estate loans modified with a term extension, interest rate reduction, and payment delay, as well as $2 million of owner occupied commercial mortgage loans modified with a payment delay and interest rate reduction.

Amortized Cost of Loans Modified during the three months ended June 30, 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 (2)		Total		Percent of Total Loan Class
Commercial
Commercial and industrial	$	23	$	60	$	—	$	2	$	10	$	5	$	100	0.23	%
Owner occupied commercial mortgage	2		2		—		29		7		—		40		0.24
Investor dependent	7		28		—		—		—		—		35		1.27
Commercial real estate	84		—		—		64		10		—		158		0.67
Total commercial	116		90		—		95		27		5		333		0.29
Consumer
Residential mortgage	5		—		3		1		24		—		33		0.14
Revolving mortgage	1		—		—		—		—		—		1		0.03
Auto	—		—		—		—		—		—		—		0.01
Other consumer	—		—		—		—		—		—		—		0.01
Total consumer	6		—		3		1		24		—		34		0.12
Total loans and leases	$	122	$	90	$	3	$	96	$	51	$	5	$	367	0.26	%

(1) Term extensions include modifications which extended the maturity date or amortization period, and modifications that deferred lump-sum principal payments to a later date.

(2) Consists of $5 million of commercial and industrial loans modified with a term extension, payment delay, and interest rate reduction.

26

Financial Effects of Loan Modifications made during the three months ended June 30, 2026

	Weighted Average Term Extension (in Months)	Weighted Average Interest Rate Reduction		Weighted Average Payment Delay (in Months)
Commercial
Commercial and industrial	32	2.61	%	12
Owner occupied commercial mortgage	11	1.95		8
Investor dependent	6	—		6
Commercial real estate	5	1.50		9
Total commercial	24	1.52		10
Consumer
Residential mortgage	20	1.87		—
Revolving mortgage	51	5.49		—
Auto	27	0.75		—
Other consumer	—	8.45		—
Total consumer	27	2.23		—
Total loans and leases	24	1.52	%	10

Financial Effects of Loan Modifications made during the three months ended June 30, 2025

	Weighted Average Term Extension (in Months)	Weighted Average Interest Rate Reduction		Weighted Average Payment Delay (in Months)
Commercial
Commercial and industrial	13	1.06	%	15
Owner occupied commercial mortgage	12	1.93		5
Investor dependent	6	—		5
Commercial real estate	23	0.60		6
Total commercial	19	1.01		11
Consumer
Residential mortgage	8	1.14		6
Revolving mortgage	43	4.40		—
Auto	19	—		—
Other consumer	60	8.94		—
Total consumer	9	1.58		6
Total loans and leases	18	1.04	%	11

27

Amortized Cost of Loans Modified during the six months ended June 30, 2026

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 (2)		Total		Percent of Total Loan Class
Commercial
Commercial and industrial	$	236	$	52	$	—	$	3	$	43	$	18	$	352	0.75	%
Owner occupied commercial mortgage	28		3		—		18		3		2		54		0.30
Investor dependent	10		51		—		—		—		—		61		2.33
Commercial real estate	72		—		115		3		—		7		197		0.84
Total commercial	346		106		115		24		46		27		664		0.53
Consumer
Residential mortgage	3		—		1		—		—		—		4		0.02
Revolving mortgage	1		—		—		—		—		—		1		0.03
Auto	—		—		—		—		—		—		—		0.01
Other consumer	—		—		—		—		—		—		—		0.01
Total consumer	4		—		1		—		—		—		5		0.02
Total loans and leases	$	350	$	106	$	116	$	24	$	46	$	27	$	669	0.44	%

(1) Term extensions include modifications which extended the maturity date or amortization period, and modifications that deferred lump-sum principal payments to a later date.

(2) Consists of $18 million of commercial and industrial loans and $7 million of commercial real estate loans modified with a term extension, interest rate reduction, and payment delay, as well as $2 million of owner occupied commercial mortgage loans modified with a payment delay and interest rate reduction.

Amortized Cost of Loans Modified during the six months ended June 30, 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 (2)		Total		Percent of Total Loan Class
Commercial
Commercial and industrial	$	79	$	77	$	—	$	3	$	18	$	5	$	182	0.42	%
Owner occupied commercial mortgage	11		4		—		29		20		—		64		0.37
Investor dependent	10		44		—		—		6		—		60		2.15
Commercial real estate	88		—		—		64		39		—		191		0.80
Total commercial	188		125		—		96		83		5		497		0.44
Consumer
Residential mortgage	9		—		3		2		25		—		39		0.17
Revolving mortgage	1		—		—		—		—		—		1		0.05
Auto	—		—		—		—		—		—		—		0.02
Other consumer	—		—		—		—		—		—		—		0.02
Total consumer	10		—		3		2		25		—		40		0.14
Total loans and leases	$	198	$	125	$	3	$	98	$	108	$	5	$	537	0.38	%

(1) Term extensions include modifications which extended the maturity date or amortization period, and modifications that deferred lump-sum principal payments to a later date.

(2) Consists of $5 million of commercial and industrial loans modified with a term extension, payment delay, and interest rate reduction.

28

Financial Effects of Loan Modifications made during the six months ended June 30, 2026

	Weighted Average Term Extension (in Months)	Weighted Average Interest Rate Reduction		Weighted Average Payment Delay (in Months)
Commercial
Commercial and industrial	27	0.82	%	10
Owner occupied commercial mortgage	8	1.91		7
Investor dependent	10	—		6
Commercial real estate	6	1.47		9
Total commercial	21	1.44		8
Consumer
Residential mortgage	18	1.87		4
Revolving mortgage	54	4.30		—
Auto	25	0.45		—
Other consumer	—	9.87		—
Total consumer	24	2.51		4
Total loans and leases	21	1.45	%	8

Financial Effects of Loan Modifications made during the six months ended June 30, 2025

	Weighted Average Term Extension (in Months)	Weighted Average Interest Rate Reduction		Weighted Average Payment Delay (in Months)
Commercial
Commercial and industrial	16	1.03	%	13
Owner occupied commercial mortgage	11	1.93		5
Investor dependent	7	—		5
Commercial real estate	20	0.60		7
Total commercial	17	1.01		9
Consumer
Residential mortgage	11	1.18		6
Revolving mortgage	47	3.75		5
Auto	20	—		—
Other consumer	60	9.20		—
Total consumer	12	1.67		6
Total loans and leases	17	1.05	%	9

Note: The financial effects of loan modifications for certain loan classes reported in the tables above were not reported in the preceding tables as the total amortized cost of loans modified during the period for such loan classes rounded to less than $1 million.

Borrowers experiencing financial difficulties are typically identified in our credit risk management process and are consequently addressed in our methodology to estimate the ALLL, which incorporates delinquencies, probability of obligor default, and loss given default. Therefore, a change to the ALLL is generally not recorded upon modification. An assessment of whether a borrower is experiencing financial difficulty is reassessed or performed on the date of a 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 June 30, 2026, there were $168 million of loans modified in the twelve-months ended June 30, 2026, which defaulted subsequent to modification.

29

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 June 30, 2026)

dollars in millions	Current		30–59 Days Past Due		60–89 Days Past Due		90 Days or Greater Past Due		Total
Commercial
Commercial and industrial	$	530	$	1	$	3	$	36	$	570
Capital call lines	—		—		—		—		—
Owner occupied commercial mortgage	64		5		2		8		79
Investor dependent	72		—		2		—		74
Commercial real estate	166		—		—		135		301
Total commercial	832		6		7		179		1,024
Consumer
Residential mortgage	23		3		2		3		31
Revolving mortgage	2		—		—		—		2
Auto	—		—		—		—		—
Other consumer	4		—		—		—		4
Total consumer	29		3		2		3		37
Total loans and leases	$	861	$	9	$	9	$	182	$	1,061

Modified Loans Payment Status (twelve months ended June 30, 2025)

dollars in millions	Current		30–59 Days Past Due		60–89 Days Past Due		90 Days or Greater Past Due		Total
Commercial
Commercial and industrial	$	262	$	2	$	4	$	1	$	269
Capital call lines	—		—		—		—		—
Owner occupied commercial mortgage	71		1		1		3		76
Investor dependent	76		—		3		—		79
Commercial real estate	304		14		—		43		361
Total commercial	713		17		8		47		785
Consumer
Residential mortgage	37		3		2		3		45
Revolving mortgage	7		—		—		—		7
Auto	—		—		—		—		—
Other consumer	—		—		—		—		—
Total consumer	44		3		2		3		52
Total loans and leases	$	757	$	20	$	10	$	50	$	837

At June 30, 2026, there were $13 million of commitments to lend additional funds to debtors experiencing financial difficulty for which the terms of the loan were modified during the six months ended June 30, 2026. At December 31, 2025, there were $60 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, 2025.

30

Loans Pledged

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

Loans Pledged

dollars in millions	June 30, 2026		December 31, 2025
FHLB of Atlanta
Lendable collateral value of pledged Non-PCD loans	$	19,200	$	19,225
Less: advances	—		—
Less: letters of credit	1,450		1,450
Available borrowing capacity	$	17,750	$	17,775
Pledged Non-PCD loans	$	31,820	$	31,713
FRB
Lendable collateral value of pledged Non-PCD loans	$	12,772	$	12,962
Less: advances	—		—
Available borrowing capacity	$	12,772	$	12,962
Pledged Non-PCD loans	$	13,520	$	13,640
FDIC
Lendable collateral value of pledged loans	$	32,121	$	35,705
Less: advances	—		—
Less: principal amount of the Purchase Money Note	28,500		33,500
Available borrowing capacity (1)	$	—	$	—
Pledged loans (2)	$	30,963	$	34,465

(1) The draw period for the Advance Facility Agreement (an expired funding agreement between FCB and the FDIC in connection with the SVBB Acquisition) ended on March 27, 2025 so there was no available borrowing capacity at June 30, 2026 or December 31, 2025.

(2) Carrying value, net of remaining discount, for loans pledged as collateral for the Purchase Money Note.

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. There were no outstanding advances from the FHLB at June 30, 2026 or December 31, 2025.

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 June 30, 2026 or December 31, 2025.

31

NOTE 6 — 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 of $184 million and $260 million at June 30, 2026 and December 31, 2025, respectively, 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) other receivables or 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 tables:

Allowance for Loan and Lease Losses

dollars in millions	Three Months Ended June 30, 2026						Three Months Ended June 30, 2025
	Commercial		Consumer		Total		Commercial		Consumer		Total
Balance at beginning of period	$	1,428	$	130	$	1,558	$	1,517	$	163	$	1,680
Provision for loan and lease losses	28		6		34		111		—		111
Charge-offs	(122)		(8)		(130)		(137)		(7)		(144)
Recoveries	19		3		22		21		4		25
Balance at end of period	$	1,353	$	131	$	1,484	$	1,512	$	160	$	1,672

dollars in millions	Six Months Ended June 30, 2026						Six Months Ended June 30, 2025
	Commercial		Consumer		Total		Commercial		Consumer		Total
Balance at beginning of period	$	1,436	$	130	$	1,566	$	1,518	$	158	$	1,676
Provision for loan and lease losses	125		12		137		249		10		259
Charge-offs	(245)		(17)		(262)		(296)		(15)		(311)
Recoveries	37		6		43		41		7		48
Balance at end of period	$	1,353	$	131	$	1,484	$	1,512	$	160	$	1,672

The ALLL may vary significantly from period to period due to changes in economic conditions, economic forecasts, the composition and credit quality of the loan and lease portfolio, and the related impacts to the ALLL models. We continuously monitor and update our ALLL estimation methodology and models, as appropriate. During the second quarter of 2026, we implemented enhancements to our probability of obligor default, loss given default and exposure at default models for the commercial and industrial, and commercial real estate portfolios which contributed to the decrease in the ALLL compared to December 31, 2025.

The ALLL was $1.48 billion at June 30, 2026, a decrease of $82 million from $1.57 billion at December 31, 2025, largely driven by lower specific reserves, improvements in credit quality including updates to certain models used to estimate the allowance as discussed above, changes in the macroeconomic scenarios, and growth concentrated in capital call lines which have a significantly lower loss rate relative to our other loan portfolios.

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

Provision for Credit Losses

dollars in millions	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Provision for loan and lease losses	$	34	$	111	$	137	$	259
(Benefit) provision for off-balance sheet credit exposure	(44)		4		(76)		10
Provision for other receivables	—		—		1		—
(Benefit) provision for credit losses	$	(10)	$	115	$	62	$	269

32

NOTE 7 — LEASES

Lessee

BancShares’ leases primarily include administrative offices and bank locations. Substantially all of our operating lease liabilities relate to United States real estate leases. Our finance lease liabilities mainly relate to equipment leases, including the lease of certain ATMs. Our real estate leases have remaining lease terms of up to 31 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	June 30, 2026			December 31, 2025
Lease assets:
Operating lease ROU assets	Other assets	$	278		$	294
Finance leases	Premises and equipment	83			71
Total lease assets		$	361		$	365
Lease liabilities:
Operating leases	Other liabilities	$	310		$	329
Finance leases	Other borrowings	85			72
Total lease liabilities		$	395		$	401
Weighted-average remaining lease terms:
Operating leases		6.9 years			7.2 years
Finance leases		8.1 years			7.7 years
Weighted-average discount rate:
Operating leases		3.11		%	3.10		%
Finance leases		4.29			4.20

As of June 30, 2026, 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 June 30,				Six Months Ended June 30,
	Classification	2026		2025		2026		2025
Operating lease cost	Occupancy expense	$	18	$	18	$	35	$	36
Finance lease ROU asset amortization	Equipment expense	3		2		6		3
Interest on lease liabilities	Interest expense - other borrowings	1		1		2		1
Variable lease cost (1)	Occupancy expense	4		5		9		12
Sublease income	Occupancy expense	(1)		(1)		(2)		(3)
Net lease cost (1)		$	25	$	25	$	50	$	49

(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.

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 11 years.

33

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

Supplemental Cash Flow Information

dollars in millions	Six Months Ended June 30,
	2026		2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	37	$	40
Operating cash flows from finance leases	2		1
Financing cash flows from finance leases	5		2
ROU assets obtained in exchange for new operating lease liabilities	15		41
ROU assets obtained in exchange for new finance lease liabilities	18		48

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 following table presents lease income related to BancShares’ equipment leases:

Lease Income

dollars in millions	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Lease income – operating leases	$	267	$	258	$	535	$	512
Variable lease income – operating leases (1)	13		14		26		30
Rental income on operating leases	280		272		561		542
Interest income – sales type and direct financing leases	43		44		85		87
Variable lease income included in other noninterest income (2)	14		16		28		30
Interest income – leveraged leases	—		1		1		2
Total lease income	$	337	$	333	$	675	$	661

(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 8 — GOODWILL AND CORE DEPOSIT INTANGIBLES

Goodwill

BancShares had goodwill of $346 million at June 30, 2026 and December 31, 2025. There was no goodwill impairment during the six months ended June 30, 2026 or 2025. 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

	Six Months Ended June 30,
dollars in millions	2026
Balance at beginning of period, net of accumulated amortization	$	195
Less: amortization for the period	24
Balance at end of period, net of accumulated amortization	$	171

34

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

Core Deposit Intangible Accumulated Amortization

dollars in millions	June 30, 2026		December 31, 2025
Gross balance	$	501	$	501
Less: accumulated amortization	330		306
Balance, net of accumulated amortization	$	171	$	195

The following table summarizes the expected amortization expense as of June 30, 2026 in subsequent periods for core deposit intangibles:

Core Deposit Intangible Expected Amortization

dollars in millions
Remainder 2026	$	22
2027	39
2028	34
2029	30
2030	28
2031	18
Balance, net of accumulated amortization	$	171

NOTE 9 — VARIABLE INTEREST ENTITIES

Unconsolidated VIEs

Unconsolidated VIEs include limited partnership interests, joint ventures and a securitization trust. The table below provides a summary of the assets and liabilities included on the Consolidated Balance Sheets associated with unconsolidated VIEs. The maximum exposure to loss for unconsolidated VIEs is generally limited to the sum of the unconsolidated VIE investment balance and off-balance sheet funding commitments. The maximum exposure to loss 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.

Refer to Note 19—Commitments and Contingencies for off-balance sheet commitments to fund other tax credit investments and other unconsolidated investments.

Unconsolidated VIEs Carrying Value and Liabilities for Funding Commitments

dollars in millions	June 30, 2026		December 31, 2025
Affordable housing tax credit investments	$	2,485	$	2,761
Other tax credit investments	28		—
Total tax credit equity investments	2,513		2,761
Other unconsolidated investments	218		194
Tax credit and other unconsolidated VIE investments (1)	2,731		2,955
Other investment securities available for sale (2)	18		—
Total unconsolidated VIE investments	$	2,749	$	2,955
Liabilities for commitments to fund tax credit investments (3)	$	1,166	$	1,321

(1) Included in other assets.

(2) Represents the Retained SBA Notes further discussed in Note 3—Investment Securities.

(3)    Represents commitments to invest in qualified affordable housing investments. These commitments are payable on demand and included in other liabilities.

During the second quarter of 2026, we sold $161 million of tax credit investments and recognized a pretax gain of $17 million, reflected in other noninterest income on the Consolidated Statements of Income.

35

The table below summarizes the tax benefits, recognized in income tax expense on the Consolidated Statements of Income, for the affordable housing tax credit investments accounted for under the PAM.

Tax Benefits - PAM

dollars in millions	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Amortization of affordable housing tax credit investments (1)	$	70	$	70	$	150	$	134
Tax credits from affordable housing tax credit investments	(77)		(67)		(157)		(135)
Other tax benefits from affordable housing tax credit investments	(15)		(16)		(32)		(23)
Net income tax benefit from affordable housing tax credit investments (2)	$	(22)	$	(13)	$	(39)	$	(24)

(1) Amortization is included in depreciation, amortization, and accretion, net, in cash flows from operating activities on the Consolidated Statements of Cash Flows.

(2) The net income tax benefit is included in cash flows from operating activities on the Consolidated Statements of Cash Flows. Changes in income taxes payable are reported in net change in other liabilities in cash flows from operating activities on the Consolidated Statements of Cash Flows.

Other Tax Credit Investments

Other tax credit investments at June 30, 2026 consisted of renewable energy tax credit investments accounted for under the HLBVM. We elected the deferral method for the tax credits and deferred tax assets (“DTAs”) related to HLBVM tax credit investments.

Refer to Note 1—Significant Accounting Policies and Basis of Presentation of our 2025 Form 10-K for further discussion of the PAM, HLBVM, and deferral method.

SBA Securitization

On June 29, 2026, FCB completed a securitization transaction of $363 million in amortized cost of SBA commercial loans held for sale (the “SBA Securitization”). As part of the SBA Securitization, First Citizens Securitization Depositor LLC (the “Depositor”), a consolidated subsidiary of FCB, sold the loans to a special purpose trust (the “SBA Trust”), which then issued multiple classes of asset-backed notes (the “SBA Notes”). The SBA Trust transferred the SBA Notes to the Depositor, which retained 5% of each class of SBA Notes (the “Retained SBA Notes”) and offered and sold 95% of each class of SBA Notes in a private placement under Rule 144A and Regulation S of the Securities Act of 1933.

FCB did not consolidate the SBA Trust because FCB does not have both Significant VIE Power and Significant VIE Exposure. FCB recognized a servicing asset and earns servicing and other ancillary fees for its role as servicer which includes performing remedy obligations regarding representations and warranties. BancShares recognized a gain of $3 million on the SBA Securitization, which is net of transaction costs and includes recognition of the servicing asset.

Refer to Note 1—Significant Accounting Policies and Basis of Presentation for further information regarding accounting policies for loan sales and securitizations. Refer to Note 3—Investment Securities for further information regarding the Retained SBA Notes.

NOTE 10 — BORROWINGS

Short-term Borrowings

Securities Sold under Agreements to Repurchase

BancShares held $152 million and $224 million at June 30, 2026 and December 31, 2025, 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 0.37% and 0.41% at June 30, 2026 and December 31, 2025, 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.

36

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. BancShares 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 $190 million and $230 million at June 30, 2026 and December 31, 2025, respectively.

Long-term Borrowings

On June 24, 2026, FCB issued and sold $750 million aggregate principal amount of its 5.097% Fixed-to-Floating Rate Senior Notes due in 2029. On March 3, 2026, the Parent Company issued and sold $500 million aggregate principal amount of its 4.869% Fixed-to-Floating Rate Senior Notes due in 2032.

During the six months ended June 30, 2026, FCB made prepayments of $5.00 billion on the Purchase Money Note and recognized a loss on extinguishment of debt of $15 million. In July 2026, we made an additional prepayment of $1.00 billion.

The following table presents long-term borrowings as of June 30, 2026 and December 31, 2025, net of the respective unamortized purchase accounting adjustments, issuance costs, and impacts of fair value hedges:

Long-term Borrowings

dollars in millions	Initial Issuance Date	Maturity	Rate Reset Date	Interest Rate After Reset	June 30, 2026		December 31, 2025
Parent Company:
Senior unsecured:
Fixed-to-Floating Senior Notes at 5.231%	March 12, 2025	March 2031	March 12, 2030	Compounded SOFR + 141 bps	$	491	$	497
Fixed-to-Floating Senior Notes at 4.869%	March 3, 2026	March 2032	March 3, 2031	Compounded SOFR + 148.7 bps	489		—
Subordinated:
Fixed Rate Reset Subordinated Notes at 5.600%	September 5, 2025	September 2035	September 5, 2030	Five-year U.S. Treasury Rate + 185 bps	589		597
Fixed-to-Fixed Subordinated Notes at 6.254%	March 12, 2025	March 2040	March 12, 2035	Five-year U.S. Treasury Rate + 197 bps	732		745
Subsidiaries:
Senior unsecured:
Fixed-to-Floating Senior Notes at 5.097%	June 24, 2026	July 2029	July 13, 2028	Compounded SOFR + 114.6 bps	746		—
Fixed Senior Notes at 6.000%	March 27, 2006	April 2036	—	—	58		58
Subordinated:
Fixed Subordinated Notes at 6.125%	March 9, 2018	March 2028	—	—	423		430
Secured:
Purchase Money Note to FDIC fixed at 3.500% (1)	March 27, 2023	March 2028	—	—	28,423		33,385
Capital lease obligations	—	Maturities through May 2057	—	—	85		72
Total long-term borrowings					$	32,036	$	35,784

(1)    Issued in connection with the SVBB Acquisition. The unamortized discount was $77 million and $115 million at June 30, 2026 and December 31, 2025, respectively. Refer to Note 5—Loans and Leases for further information on loans pledged as collateral to secure borrowings.

August 2026 Debt Issuance

On August 3, 2026, FCB issued and sold an additional $400 million aggregate principal amount of its 5.097% Fixed-to-Floating Rate Senior Notes due in 2029.

Pledged Assets

Refer to the “Loans Pledged” section in Note 5—Loans and Leases for information on loans pledged as collateral to secure borrowings. Additionally, interest-earning deposits at banks included $180 million and $212 million at June 30, 2026 and December 31, 2025, respectively, that were required minimum deposits under the Purchase Money Note.

37

NOTE 11 — DERIVATIVE FINANCIAL INSTRUMENTS

Our derivatives designated as hedging instruments (“Designated Derivatives”) 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.

Our derivatives not designated as hedging instruments (“Non-Designated Derivatives”) 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. Our Non-Designated Derivatives also include risk participation agreements, as well as equity warrants that we often obtain through credit facility negotiations, primarily with private venture-backed companies in the technology, life sciences, or healthcare industries.

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

Refer to Note 1—Significant Accounting Policies and Basis of Presentation of our 2025 Form 10-K for accounting policies for 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	June 30, 2026						December 31, 2025
	Notional Amount		Asset Fair Value		Liability Fair Value		Notional Amount		Asset Fair Value		Liability Fair Value
Designated Derivatives
Fair Value Hedges
Interest rate contracts hedging long-term borrowings (1) (2)	$	3,100	$	—	$	(2)	$	—	$	—	$	—
Cash Flow Hedges
Interest rate contracts hedging loans (1) (2)	10,000		—		(1)		4,000		—		—
Total Designated Derivatives	$	13,100	$	—	$	(3)	$	4,000	$	—	$	—
Non-Designated Derivatives
Interest rate contracts (1) (2)	$	30,488	$	349	$	(380)	$	28,741	$	385	$	(381)
Foreign exchange contracts (3)	9,470		110		(82)		8,912		122		(113)
Other contracts (4)	1,431		49		(1)		1,485		27		—
Total Non-Designated derivatives	$	41,389	$	508	$	(463)	$	39,138	$	534	$	(494)
Gross derivatives fair values presented in the Consolidated Balance Sheets			$	508	$	(466)			$	534	$	(494)
Less: gross amount offset in the Consolidated Balance Sheets			—		—				—		—
Net amount included in other assets and other liabilities in the Consolidated Balance Sheets			$	508	$	(466)			$	534	$	(494)

(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 $605 million and $1 million, respectively, as of June 30, 2026, and $252 million and $0 million, respectively, as of December 31, 2025.

(4)    Other contracts include risk participation agreements and equity warrants.

38

The following table presents the impact of variation margin netting (form of collateral payment when the underlying fair value changes) on derivative assets and liabilities:

Variation Margin Payments

dollars in millions	June 30, 2026				December 31, 2025
	Asset Fair Value		Liability Fair Value		Asset Fair Value		Liability Fair Value
Designated Derivatives
Gross fair value	$	3	$	(41)	$	19	$	—
Cleared trades, variation margin netting	(3)		38		(19)		—
Total Designated Derivatives	$	—	$	(3)	$	—	$	—
Non-Designated Derivatives
Gross fair value	$	589	$	(483)	$	596	$	(529)
Cleared trades, variation margin netting	(81)		20		(62)		35
Total Non-Designated Derivatives	$	508	$	(463)	$	534	$	(494)
Gross derivatives fair values presented in the Consolidated Balance Sheets	$	508	$	(466)	$	534	$	(494)
Amounts subject to master netting agreements (1)	(73)		73		(118)		118
Cash collateral pledged (received) subject to master netting agreements (2)	(296)		3		(204)		62
Total net derivative fair value	$	139	$	(390)	$	212	$	(314)

(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 June 30,				Six Months Ended June 30,
	Interest Expense	2026		2025		2026		2025
Loss on hedging instruments - borrowings	Borrowings	(30)		—		$	(38)	$	—
Gain on hedged item - borrowings	Borrowings	30		1		38		2
Net gain on fair value hedges	Total interest expense	$	—	$	1	$	—	$	2

The following table presents the carrying value of hedged items and associated cumulative hedging adjustment related to fair value hedges as of June 30, 2026. There were no fair value hedges outstanding as of December 31, 2025.

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
June 30, 2026
Long-term borrowings	$	3,047	$	(38)	$	—

39

Cash Flow Hedges

The following table presents the pretax unrealized (loss) or 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:

Other Comprehensive Loss on Cash Flow Hedges, Pretax

dollars in millions	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Other comprehensive (loss) income on cash flow hedge derivatives before reclassifications	$	(28)	$	—	$	(47)	$	12
Amounts reclassified from AOCI to earnings	(2)		(1)		(2)		(4)
Other comprehensive (loss) income on cash flow hedge derivatives	$	(30)	$	(1)	$	(49)	$	8

The following table presents other information for cash flow hedges:

Other Information for Cash Flow Hedges

dollars in millions	June 30, 2026		December 31, 2025
Unrealized (loss) gain on cash flow hedge derivatives reported in AOCI, net of income taxes	$	(22)	$	14
Estimate to be reclassified from AOCI to earnings during the next 12 months, net of income taxes (1)	$	(13)	$	9
Maximum number of months over which forecasted cash flows are hedged (2)	27		27

(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.

(2) Maximum number of months is based on the latest maturity date of cash flow hedges outstanding at June 30, 2026 and December 31, 2025.

Non-Designated Derivatives

The following table presents the gain or (loss) on Non-Designated Derivatives recognized on the Consolidated Statements of Income:

Gain (Loss) on Non-Designated Derivatives

dollars in millions		Three Months Ended June 30,				Six Months Ended June 30,
	Amounts Recognized	2026		2025		2026		2025
Interest rate contracts	Other noninterest income	$	8	$	7	$	12	$	6
Foreign currency forward contracts (1)	Other noninterest income	18		(45)		37		(64)
Other contracts	Other noninterest income	31		2		35		2
Gain (loss) on Non-Designated Derivatives		$	57	$	(36)	$	84	$	(56)

(1) This is primarily related to economic hedges of foreign currency risks arising from loans and other assets denominated in foreign currency. There is an offsetting impact within noninterest income for the foreign exchange revaluation of the associated assets denominated in foreign currency.

NOTE 12 — 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.

40

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	June 30, 2026								December 31, 2025
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets
Investment securities available for sale
U.S. Treasury	$	13,320	$	—	$	13,320	$	—	$	10,673	$	—	$	10,673	$	—
Government agency	33		—		33		—		43		—		43		—
Residential mortgage-backed securities	17,500		—		17,500		—		17,623		—		17,623		—
Commercial mortgage-backed securities	2,972		—		2,972		—		3,299		—		3,299		—
Corporate bonds	128		—		108		20		140		—		117		23
Municipal bonds	12		—		12		—		12		—		12		—
Other	18		—		18		—		—		—		—		—
Total investment securities available for sale	$	33,983	$	—	$	33,963	$	20	$	31,790	$	—	$	31,767	$	23
Marketable equity securities	156		69		87		—		127		50		77		—
Loans held for sale	56		—		56		—		87		—		87		—
Loans	24		—		24		—		22		—		22		—
Derivative assets (1)
Total Designated Derivatives assets	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest rate contracts — Non-Designated Derivatives	$	349	$	—	$	347	$	2	$	385	$	—	$	383	$	2
Foreign exchange contracts — Non-Designated Derivatives	110		—		110		—		122		—		122		—
Other derivative contracts — Non-Designated Derivatives	49		—		1		48		27		—		—		27
Total Non-Designated Derivatives assets	$	508	$	—	$	458	$	50	$	534	$	—	$	505	$	29
Total derivative assets	$	508	$	—	$	458	$	50	$	534	$	—	$	505	$	29
Liabilities
Derivative liabilities (1)
Interest rate contracts — Designated Derivatives	$	3	$	—	$	3	$	—	$	—	$	—	$	—	$	—
Interest rate contracts — Non-Designated Derivatives	$	380	$	—	$	380	$	—	$	381	$	—	$	381	$	—
Foreign exchange contracts — Non-Designated Derivatives	82		—		82		—		113		—		113		—
Other derivative contracts — Non-Designated Derivatives	1		—		1		—		—		—		—		—
Total Non-Designated Derivatives liabilities	$	463	$	—	$	463	$	—	$	494	$	—	$	494	$	—
Total derivative liabilities	$	466	$	—	$	466	$	—	$	494	$	—	$	494	$	—
(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, and therefore classified as Level 3. Fair value of other investment securities available for sale are estimated using a third-party pricing service and are considered Level 2.

Marketable equity securities. Equity securities are measured at fair value using observable closing prices. 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.

41

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 11—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
	June 30, 2026		December 31 2025
Assets
Corporate bonds	$	20	$	23	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-Designated Derivatives	$	50	$	29	Internal valuation model	Multiple factors, including but not limited to, private company valuation, illiquidity discount, and estimated life of the instrument.

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	Six Months Ended June 30, 2026						Six Months Ended June 30, 2025
	Corporate Bonds		Other Derivative Assets — Non-Designated		Other Derivative Liabilities — Non-Designated		Corporate Bonds		Other Derivative Assets — Non-Designated		Other Derivative Liabilities — Non-Designated
Beginning balance	$	23	$	29	$	—	$	168	$	17	$	1
Purchases	—		3		—		—		4		—
Changes in fair value included in earnings	—		28		—		—		3		—
Changes in fair value included in comprehensive income	—		—		—		5		—		—
Transfers out	—		—		—		—		—		—
Maturity and settlements	(3)		(10)		—		(35)		(1)		—
Ending balance	$	20	$	50	$	—	$	138	$	23	$	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	June 30, 2026						December 31, 2025
	Fair Value		Unpaid Principal Balance		Difference		Fair Value		Unpaid Principal Balance		Difference
Originated loans held for sale (1)	$	80	$	81	$	(1)	$	109	$	109	$	—

(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 and six months ended June 30, 2026 and 2025. Interest earned on originated loans held for sale is recorded within interest income on loans and leases in the Consolidated Statements of Income.

42

No originated loans held for sale were 90 or more days past due or on nonaccrual status as of June 30, 2026 or December 31, 2025.

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
	Carrying Value		Level 1		Level 2		Level 3		Total Gains (Losses)
June 30, 2026
Assets held for sale - loans	$	3	$	—	$	—	$	3	$	(3)
Loans - collateral dependent loans	209		—		—		209		(67)
Other real estate owned	56		—		—		56		1
Total	$	268	$	—	$	—	$	268	$	(69)
December 31, 2025
Assets held for sale - loans	$	5	$	—	$	—	$	5	$	(7)
Loans - collateral dependent loans	186		—		—		186		(157)
Other real estate owned	104		—		—		104		—
Total	$	295	$	—	$	—	$	295	$	(164)

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 in instances where there is an active market, or Level 2 when there is no active market. The fair value of Level 2 assets may also be 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 5% and 14%, applied for estimated selling costs and other external factors that may impact the marketability of the property. At June 30, 2026 and December 31, 2025, the weighted average discount applied was 8.90% and 7.86%, 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.

43

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	June 30, 2026
	Carrying Value		Estimated Fair Value
			Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	1,519	$	1,519	$	—	$	—	$	1,519
Interest-earning deposits at banks	21,132		21,132		—		—		21,132
Securities purchased under agreements to resell	737		—		737		—		737
Investment in marketable equity securities	156		69		87		—		156
Investment securities available for sale	33,983		—		33,963		20		33,983
Investment securities held to maturity	9,418		—		8,214		—		8,214
Loans held for sale	90		—		56		34		90
Net loans	147,624		—		1,552		146,686		148,238
Accrued interest receivable	943		—		943		—		943
Federal Home Loan Bank stock	20		—		20		—		20
Mortgage servicing rights	45		—		—		68		68
Derivative assets - Non-Designated Derivatives	508		—		458		50		508
Financial Liabilities
Deposits with no stated maturity	158,300		—		158,300		—		158,300
Time deposits	15,127		—		15,100		—		15,100
Credit balances of factoring clients	1,339		—		—		1,339		1,339
Securities sold under customer repurchase agreements	152		—		152		—		152
Long-term borrowings	31,951		—		31,845		—		31,845
Accrued interest payable	167		—		167		—		167
Derivative liabilities - Non-Designated Derivatives	463		—		463		—		463
	December 31, 2025
	Carrying Value		Estimated Fair Value
			Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	801	$	801	$	—	$	—	$	801
Interest-earning deposits at banks	19,801		19,801		—		—		19,801
Securities purchased under agreements to resell	232		—		232		—		232
Investment in marketable equity securities	127		50		77		—		127
Investment securities available for sale	31,790		—		31,767		23		31,790
Investment securities held to maturity	9,647		—		8,491		—		8,491
Loans held for sale	799		—		781		18		799
Net loans	144,346		—		1,580		143,782		145,362
Accrued interest receivable	912		—		912		—		912
Federal Home Loan Bank stock	20		—		20		—		20
Mortgage servicing rights	32		—		—		50		50
Derivative assets - Non-Designated Derivatives	534		—		505		29		534
Financial Liabilities
Deposits with no stated maturity	150,342		—		150,342		—		150,342
Time deposits	11,236		—		11,227		—		11,227
Credit balances of factoring clients	1,148		—		—		1,148		1,148
Securities sold under customer repurchase agreements	224		—		224		—		224
Long-term borrowings	35,712		—		35,795		—		35,795
Accrued interest payable	140		—		140		—		140
Derivative liabilities - Non-Designated Derivatives	494		—		494		—		494

44

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 June 30, 2026 and December 31, 2025 included $180 million and $212 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 June 30, 2026 and December 31, 2025. 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.

45

NOTE 13 — 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 - March 31, 2026	10,684,129	1,005,185
Shares repurchased under authorized repurchase plan	(298,907)	—
Common stock - June 30, 2026	10,385,222	1,005,185
Common stock - December 31, 2025	11,133,974	1,005,185
Shares repurchased under authorized repurchase plan	(748,752)	—
Common stock - June 30, 2026	10,385,222	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 and Class B common stockholders have 16 votes per share.

Non-Cumulative Perpetual Preferred Stock

As of June 30, 2026, the Parent Company had Series A, Series B, Series C, Series D, and Series E non-cumulative perpetual preferred stock outstanding (together, “BancShares Preferred Stock”) as summarized in the following table:

Preferred Stock

dollars in millions, except per share, depositary share, and per depositary share data
Preferred Stock	Issuance Date	Earliest Redemption Date	Book Value (1)		Par Value Per Share		Shares Authorized, Issued and Outstanding	Aggregate Liquidation Preference		Liquidation Preference Per Share		Depositary Shares (Fractional Interest) (2)	Liquidation Preference Per Depositary Share		Dividend
Series A	March 12, 2020	March 15, 2025	$	340	$	0.01	345,000	$	345	$	1,000	13,800,000 (1/40th)	$	25	5.375	%
Series B (3)	January 3, 2022	January 4, 2027	334		0.01		325,000	325		1,000		n/a	n/a		SOFR + 3.972%
Series C	January 3, 2022	January 4, 2027	207		0.01		8,000,000	200		25		n/a	n/a		5.625	%
Series D (4)	November 18, 2025	December 15, 2030	494		0.01		5,000	500		100,000		500,000 (1/100th)	1,000		7.000	%
Series E (5)	February 5, 2026	March 15, 2031	390		0.01		400,000	400		1,000		16,000,000 (1/40th)	25		6.625	%
Total			$	1,765			9,075,000	$	1,770

(1) The book value is net of direct issuance costs and premiums or discounts.

(2) Each depositary share represents a fractional ownership interest in a share of non-cumulative perpetual preferred stock.

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

(4) The dividend rate is 7.000% per annum from the issuance date to, but excluding, the first reset date of December 15, 2030. Thereafter, the dividend rate resets to the five-year treasury rate plus 3.301% on the fifth anniversary of the preceding reset date.

(5) The initial dividend period will commence on and include the issuance date and will end on and include June 14, 2026. The dividend rate is 6.625% per annum from the issuance date to, but excluding, the first reset date of March 15, 2031. Thereafter, the dividend rate resets to the five-year treasury rate plus 2.830% on the fifth anniversary of the preceding reset date.

Dividends on 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.

At its option and subject to any required regulatory approval, the Parent Company may redeem the BancShares Preferred Stock at a redemption price equal to the “Liquidation Preference Per Share” in the table above, plus any applicable dividends, (i) in whole or in part on any dividend payment date on or after the “Earliest Redemption Date” in the table above, or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event.

46

NOTE 14 — ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following table includes the components of AOCI:

Components of Accumulated Other Comprehensive Loss

dollars in millions	June 30, 2026						December 31, 2025
	Pretax		Income Taxes		Net of Income Taxes		Pretax		Income Taxes		Net of Income Taxes
Unrealized loss on securities available for sale	$	(527)	$	118	$	(409)	$	(162)	$	25	$	(137)
Unrealized loss on securities available for sale transferred to held to maturity	(5)		1		(4)		(5)		1		(4)
Defined benefit pension items	276		(71)		205		282		(72)		210
Unrealized (loss) gain on cash flow hedge derivatives	(30)		8		(22)		19		(5)		14
Total accumulated other comprehensive (loss) income	$	(286)	$	56	$	(230)	$	134	$	(51)	$	83

The following table summarizes 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 (loss) on cash flow hedge derivatives		Total accumulated other comprehensive income (loss)
Balance as of December 31, 2025	$	(137)	$	(4)	$	210	$	14	$	83
AOCI activity before reclassifications	(272)		—		(4)		(34)		(310)
Amounts reclassified from AOCI to earnings	—		—		(1)		(2)		(3)
Other comprehensive loss for the period	(272)		—		(5)		(36)		(313)
Balance as of June 30, 2026	$	(409)	$	(4)	$	205	$	(22)	$	(230)
Balance as of December 31, 2024	$	(584)	$	(4)	$	135	$	8	$	(445)
AOCI activity before reclassifications	328		—		(3)		9		334
Amounts reclassified from AOCI to earnings	—		—		—		(3)		(3)
Other comprehensive income (loss) for the period	328		—		(3)		6		331
Balance as of June 30, 2025	$	(256)	$	(4)	$	132	$	14	$	(114)

47

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 June 30,
	2026						2025
	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 (loss) income on securities available for sale	$	(178)	$	45	$	(133)	$	119	$	(30)	$	89
Defined benefit pension items:
Actuarial loss	$	(3)	$	1	$	(2)	$	(4)	$	1	$	(3)
Amounts reclassified from AOCI to earnings	(1)		—		(1)		—		—		—		Other noninterest expense
Actuarial loss	$	(4)	$	1	$	(3)	$	(4)	$	1	$	(3)
Unrealized (loss) gain on cash flow hedge derivatives:
AOCI activity before reclassifications	$	(28)	$	8	$	(20)	$	—	$	(1)	$	(1)
Amounts reclassified from AOCI to earnings	(2)		—		(2)		(1)		1		—		Interest income on loans and leases
Other comprehensive loss on cash flow hedge derivatives	$	(30)	$	8	$	(22)	$	(1)	$	—	$	(1)
Total other comprehensive (loss) income	$	(212)	$	54	$	(158)	$	114	$	(29)	$	85

dollars in millions	Six Months Ended June 30,
	2026						2025
	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 (loss) income on securities available for sale	$	(365)	$	93	$	(272)	$	441	$	(113)	$	328
Defined benefit pension items:
Actuarial loss	$	(5)	$	1	$	(4)	$	(4)	$	1	$	(3)
Amounts reclassified from AOCI to earnings	(1)		—		(1)		—		—		—		Other noninterest expense
Actuarial loss	$	(6)	$	1	$	(5)	$	(4)	$	1	$	(3)
Unrealized (loss) gain on cash flow hedge derivatives:
AOCI activity before reclassifications	$	(47)	$	13	$	(34)	$	12	$	(3)	$	9
Amounts reclassified from AOCI to earnings	(2)		—		(2)		(4)		1		(3)		Interest income on loans and leases
Other comprehensive (loss) income on cash flow hedge derivatives	$	(49)	$	13	$	(36)	$	8	$	(2)	$	6
Total other comprehensive (loss) income	$	(420)	$	107	$	(313)	$	445	$	(114)	$	331

48

NOTE 15 — 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 share and per share data	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Net income	$	672	$	575	$	1,206	$	1,058
Preferred stock dividends	32		14		58		29
Net income available to common stockholders	$	640	$	561	$	1,148	$	1,029
Weighted average common shares outstanding
Basic shares outstanding	11,535,792		13,237,226		11,729,271		13,405,295
Stock-based awards	—		—		—		—
Diluted shares outstanding	11,535,792		13,237,226		11,729,271		13,405,295
Earnings per common share
Basic and diluted	$	55.52	$	42.36	$	97.95	$	76.73

NOTE 16 — INCOME TAXES

BancShares’ global effective income tax rates (“ETRs”) were 24.5% and 24.1% for the three months ended June 30, 2026 and 2025, respectively. The increase in the ETR for the three months ended June 30, 2026 compared to 2025 was primarily due to the favorable impact from the revaluation of deferred taxes due to a change in state law enacted in the prior year quarter. BancShares’ global ETRs were 24.4% and 24.9% for the six months ended June 30, 2026 and 2025, respectively. The decrease in the ETR for the six months ended June 30, 2026 compared to 2025 was primarily due to a higher tax credit benefit for 2026.

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 2026 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 recognized.

Deferred Tax Assets and Valuation Adjustments

BancShares’ ability to recognize 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 our DTAs, changes to the valuation allowance may be required.

49

NOTE 17 — EMPLOYEE BENEFIT PLANS

BancShares sponsors non-contributory defined benefit pension plans and supplemental and executive retirement 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:

Net Periodic Benefit Costs

dollars in millions	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Service cost	$	2	$	2	$	4	$	4
Interest cost	16		16		32		32
Expected return on assets	(24)		(23)		(49)		(47)
Amortization of net actuarial gain	(1)		—		(1)		—
Total net periodic benefit	$	(7)	$	(5)	$	(14)	$	(11)

NOTE 18 — SEGMENT INFORMATION

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

Under our segment expense allocation methodology, allocated expenses increase noninterest expense of the applicable segment(s), with an offsetting decrease to Corporate noninterest expense. “All other noninterest expense” in the segment reporting tables below includes the effect of allocated expenses, resulting in a reduction to expense (or “Contra Expense”) for Corporate.

General Bank

The General Bank segment delivers products and services to consumer and small business clients 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, 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 teams. Our wealth and private banking business 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. Offerings include 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 business that supports deposit, cash management and lending to homeowner associations and property management companies.

Revenue is primarily generated from interest income on loans and leases. Noninterest income is primarily generated from fees for banking and advisory services, including lending-related fees, most of the deposit fees and service charges and 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 Community Reinvestment Act initiatives.

Commercial Bank

The Commercial Bank segment provides a range of lending, leasing, capital markets, asset management, and other financial and advisory services, primarily tailored to commercial and middle market companies in a wide range of industries, including energy, healthcare, technology media and telecommunications, maritime, and aerospace and defense. 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

50

commercial real estate professionals. Additionally, we provide business loans and leases, including both capital and operating leases, through a highly automated credit approval, documentation and funding process.

Commercial Bank also includes products and services offered to commercial clients and investors across stages, sectors and regions in the innovation ecosystem, as well as private equity and venture capital firms. Loan products are offered through Global Fund Banking and Technology and Healthcare Banking and consist of capital call lines of credit, investor dependent loans, and commercial and industrial loans made primarily to technology, life science and healthcare companies.

We also provide factoring, receivable management, supply chain financing, and secured financing to businesses that operate in several industries. These include apparel, textile, furniture, home furnishings, and consumer electronics. See further disclosure on factoring in Note 21—Segment Information in our 2025 Form 10-K.

Revenue is primarily generated from interest income on loans and leases. Noninterest income is mostly generated from rental income on operating lease equipment, lending-related fees, including most of the capital market fees and international fees, essentially all of the client investment fees, and other revenue from banking services. Noninterest income also includes all of the commissions earned on factoring-related activities. We derive our commercial lending business through direct marketing to borrowers, lessees, manufacturers, vendors, and distributors, as well as through our private equity and venture capital relationships. We also utilize referrals as a source for commercial lending business and may periodically buy participations or syndications of loans and lines of credit, or purchase loans on a whole-loan basis.

Rental income and depreciation expense on operating lease equipment is related to small and large ticket equipment we own and lease to others. Rental income is generally influenced by the size of the operating lease portfolio. 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.

We offer a full suite of commercial deposit products and services through online and mobile banking platforms, as well as physical 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. 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, and discount accretion income for certain acquired loans. Corporate also includes the offsetting impacts of allocated expenses as discussed above.

51

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.

dollars in millions	Three Months Ended June 30, 2026
	General Bank		Commercial Bank		Rail		Corporate (1)		BancShares (2)
Net interest income (expense)	$	819	$	805	$	(59)	$	91	$	1,656
Rental income on operating lease equipment	—		54		226		—		280
All other noninterest income	187		270		7		32		496
Total noninterest income	187		324		233		32		776
Total revenue	1,006		1,129		174		123		2,432
Depreciation on operating lease equipment	—		43		58		—		101
Maintenance and other operating lease expenses	—		—		67		—		67
Personnel cost	209		186		6		443		844
Acquisition-related expenses	—		—		—		8		8
All other noninterest expense (3)	392		400		18		(279)		531
Total noninterest expense	601		629		149		172		1,551
Provision (benefit) for credit losses	54		(64)		—		—		(10)
Income (loss) before income taxes	351		564		25		(49)		891
Income tax expense (benefit)	85		136		6		(8)		219
Net income (loss)	$	266	$	428	$	19	$	(41)	$	672
Select Period End Balances
Loans and leases	$	64,355	$	86,635	$	44	$	—	$	151,034
Operating lease equipment, net	—		723		9,032		—		9,755
Investment securities	18		—		—		43,539		43,557
Deposits	75,718		45,690		2		52,017		173,427
	Three Months Ended June 30, 2025
	General Bank		Commercial Bank		Rail		Corporate (1)		BancShares (2)
Net interest income (expense)	$	824	$	789	$	(53)	$	135	$	1,695
Rental income on operating lease equipment	—		54		218		—		272
All other noninterest income	164		228		3		11		406
Total noninterest income	164		282		221		11		678
Total revenue	988		1,071		168		146		2,373
Depreciation on operating lease equipment	—		44		56		—		100
Maintenance and other operating lease expenses	—		—		55		—		55
Personnel cost	207		183		6		414		810
Acquisition-related expenses	—		—		—		38		38
All other noninterest expense (3)	373		422		26		(324)		497
Total noninterest expense	580		649		143		128		1,500
Provision for credit losses	13		102		—		—		115
Income before income taxes	395		320		25		18		758
Income tax expense (benefit)	101		82		6		(6)		183
Net income	$	294	$	238	$	19	$	24	$	575
Select Period End Balances
Loans and leases	$	64,987	$	76,220	$	62	$	—	$	141,269
Operating lease equipment, net	—		750		8,716		—		9,466
Investment securities	—		—		—		43,346		43,346
Deposits	73,499		40,697		3		45,736		159,935
(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.

52

dollars in millions	Six Months Ended June 30, 2026
	General Bank		Commercial Bank		Rail		Corporate (1)		BancShares (2)
Net interest income (expense)	$	1,632	$	1,607	$	(117)	$	155	$	3,277
Rental income on operating lease equipment	—		109		452		—		561
All other noninterest income	359		500		16		32		907
Total noninterest income	359		609		468		32		1,468
Total revenue	1,991		2,216		351		187		4,745
Depreciation on operating lease equipment	—		86		116		—		202
Maintenance and other operating lease expenses	—		—		132		—		132
Personnel cost	424		385		14		890		1,713
Acquisition-related expenses	—		—		—		13		13
All other noninterest expense (3)	777		804		35		(589)		1,027
Total noninterest expense	1,201		1,275		297		314		3,087
Provision (benefit) for credit losses	71		(9)		—		—		62
Income (loss) before income taxes	719		950		54		(127)		1,596
Income tax expense (benefit)	175		231		13		(29)		390
Net income (loss)	$	544	$	719	$	41	$	(98)	$	1,206
	Six Months Ended June 30, 2025
	General Bank		Commercial Bank		Rail		Corporate (1)		BancShares (2)
Net interest income (expense)	$	1,612	$	1,575	$	(105)	$	276	$	3,358
Rental income on operating lease equipment	—		110		432		—		542
All other noninterest income	328		429		5		9		771
Total noninterest income	328		539		437		9		1,313
Total revenue	1,940		2,114		332		285		4,671
Depreciation on operating lease equipment	—		88		110		—		198
Maintenance and other operating lease expenses	—		—		113		—		113
Personnel cost	417		373		14		824		1,628
Acquisition-related expenses	—		—		—		80		80
All other noninterest expense (3)	728		842		40		(636)		974
Total noninterest expense	1,145		1,303		277		268		2,993
Provision for credit losses	59		210		—		—		269
Income before income taxes	736		601		55		17		1,409
Income tax expense (benefit)	189		154		14		(6)		351
Net income	$	547	$	447	$	41	$	23	$	1,058
(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.

53

NOTE 19 — 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	June 30, 2026		December 31, 2025
Financing Commitments
Financing assets (excluding leases)	$	52,858	$	51,726
Letters of Credit
Financial standby letters of credit	2,762		2,583
Other letters of credit	197		227
Deferred Purchase Agreements	1,487		1,723
Purchase and Funding Commitments (1)	103		102

(1)    BancShares’ purchase and funding commitments relate to the Rail segment commitments to fund 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 net unfunded loan commitments or lines of credit, primarily reflect BancShares’ agreements to lend to its customers, subject to the customers’ compliance with contractual obligations. At June 30, 2026 and December 31, 2025, substantially all undrawn financing commitments were senior facilities. Financing commitments also include $296 million and $360 million at June 30, 2026 and December 31, 2025, respectively, related to off-balance sheet commitments to fund other tax credit investments and other unconsolidated investments. These off-balance sheet investment commitments 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

Financial 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 $129 million and $211 million at June 30, 2026 and December 31, 2025, 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.

54

The table above includes $1.47 billion and $1.71 billion of DPA exposures at June 30, 2026 and December 31, 2025, respectively, related to receivables on which BancShares has assumed the credit risk. The table also includes $14 million and $13 million available under DPA credit line agreements provided at June 30, 2026 and December 31, 2025, 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. The actual results of resolving such matters may be substantially higher than the amounts reserved.

For certain Litigation matters for which a loss is probable or reasonably possible, BancShares is able to estimate a range of reasonably possible losses in excess of any established reserve, or for which there is no established reserve. Management currently estimates an aggregate range of reasonably possible losses to be up to approximately $25 million in excess of any established reserves. This estimate represents reasonably possible losses (in excess of any established reserves) over the life of such Litigation, which may span a currently indeterminable number of years, and is based on information currently available as of June 30, 2026. The Litigation matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate. For certain other Litigation matters for which a loss is probable or reasonably possible, BancShares is not able to estimate a range of reasonably possible losses.

Based on information currently available as of June 30, 2026, those Litigation matters for which BancShares is not able to estimate a range of reasonably possible losses or as to which a loss does not appear to be reasonably possible 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.

55

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, 2025 (the “2025 Form 10-K”). Throughout this MD&A, references to a specific “Note” refer to Notes to the Consolidated Financial Statements (Unaudited) in Item 1. Financial Statements.

Intercompany accounts and transactions have been eliminated. Refer to Note 1—Significant Accounting Policies and Basis of Presentation for further information.

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. BancShares offers deposit products, loans, and wealth management and private banking services to consumer clients. BancShares provides lending, leasing, capital markets and other financial and advisory services, to small and middle-market companies across a variety of industries. Additionally, BancShares provides a full suite of financial products and services to private equity firms, venture capital firms, and commercial clients in innovation markets, such as technology, life sciences and healthcare industries. BancShares also provides deposit, cash management and lending to homeowner associations and property management companies and 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”), First Citizens Asset Management, Inc. (“FCAM”), and First Citizens Delaware Trust Company, 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 18—Segment Information for further information regarding the products and services we provide.

Refer to the 2025 Form 10-K for a discussion of our strategy.

56

Recent Events

Equity Transactions

Share Repurchase Programs

During the second quarter of 2026, we repurchased 298,907 shares of our Class A common stock for $600 million and paid a dividend of $2.10 per share on our Class A and Class B common stock. Shares repurchased during the second quarter of 2026 represented 2.80% of Class A common stock and 2.56% of total Class A and Class B common stock outstanding at March 31, 2026. From inception of the 2024 share repurchase program (“2024 SRP”) through June 30, 2026, we repurchased 3,141,855 shares of our Class A common stock for $6.19 billion, representing 23.23% of Class A common stock and 21.62% of total Class A and Class B common stock outstanding as of June 30, 2024.

From July 1, 2026 through July 31, 2026, BancShares repurchased an additional 97,287 shares of Class A common stock for a total of $206 million and had total capacity remaining under the current share repurchase program (the “2025 SRP”) of $1.11 billion as of July 31, 2026.

Refer to Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds for second quarter 2026 monthly repurchase activity of Class A common stock.

Preferred Stock Issuance

On February 5, 2026, the Parent Company issued and sold 6.625% non-cumulative perpetual preferred stock, series E for a total of $400 million. Refer to Note 13—Stockholders' Equity for further information, including depositary shares and liquidation preference.

Debt Transactions

Prepayments of the Purchase Money Note

In connection with the SVBB Acquisition (as defined in Note 2—Business Combinations), FCB issued a five-year $36.07 billion note payable to the FDIC, maturing March 27, 2028 (the “Purchase Money Note”). The Purchase Money Note had a carrying value of $28.42 billion and $33.39 billion at June 30, 2026 and December 31, 2025, respectively. During the current quarter, we prepaid $2.50 billion of the Purchase Money Note which resulted in a $7 million loss on extinguishment of debt. During the six months ended June 30, 2026, we prepaid $5.00 billion of the Purchase Money Note which resulted in a $15 million loss on extinguishment of debt. The outstanding balance of the Purchase Money Note declined from $35.85 billion at September 30, 2025 to $28.42 billion at June 30, 2026. Additionally, we prepaid $1.00 billion in July 2026. We will continue to monitor the interest rate environment, FCB’s collateral position for the Purchase Money Note, and FCB’s liquidity position to determine the timing and magnitude of further voluntary prepayments. We expect monthly prepayments to be at least $500 million throughout 2026. In the third quarter of 2026, we expect total prepayments of $6 billion to $8 billion, largely driven by expected liquidity from the BMO Branch Acquisition (as defined in Note 2—Business Combinations).

Debt Issuances

Debt issuances through June 30, 2026 of $1.25 billion include the following:

•On June 24, 2026, FCB issued and sold $750 million aggregate principal amount of its 5.097% Fixed-to-Floating Rate Senior Notes due in 2029 (the “Current Quarter Debt Issuance”).

•On March 3, 2026, the Parent Company issued and sold $500 million aggregate principal amount of its 4.869% Fixed-to-Floating Rate Senior Notes due in 2032 in a public offering.

On August 3, 2026, FCB issued and sold an additional $400 million aggregate principal amount of its 5.097% Fixed-to-Floating Rate Senior Notes due in 2029.

SBA Securitization

On June 29, 2026, we completed the SBA Securitization (as defined in Note 9—Variable Interest Entities) of SBA commercial loans held for sale totaling $363 million in amortized cost, resulting in a gain of $3 million.

Loan Sale

In April 2026, residential mortgage loans held for sale totaling $644 million in amortized cost were sold and we recognized a gain of $1 million as further discussed in Note 4—Assets Held for Sale.

Sale of Tax Credit Investments

In May 2026, we sold $161 million of tax credit investments and recognized a pretax gain of $17 million. Refer to Note 9—Variable Interest Entities for further discussion.

57

Pending Branch Acquisition

On October 16, 2025, FCB announced the BMO Branch Acquisition to acquire 138 branches from BMO Bank N.A. located throughout the Midwest, Great Plains and West regions of the U.S. We expect to assume approximately $5.3 billion in deposits and acquire approximately $700 million in loans. We expect the transaction to be completed during the third quarter of 2026.

Commercial Banking Brand Alignment

On April 23, 2026, FCB announced plans to expand its commercial banking capabilities and align brand names in the fourth quarter of 2026. Silicon Valley Bank (“SVB”), a division of FCB, will rebrand as First Citizens Innovation Banking and First Citizens Fund Banking. CIT Commercial Services and the Silicon Valley Bank Wine division will rebrand as FCB.

Recent Economic, Industry and Regulatory Developments

Economic conditions reflected heightened uncertainty in 2026, as inflationary pressures, due in part to global energy constraints related to the conflicts in the Middle East, contributed to market volatility. We continue to monitor these developments and the broader macroeconomic environment; however, the ultimate effects remain uncertain and dependent on future events.

Entering 2026, the benchmark federal funds range was between 3.50% - 3.75%. During the 2026 Federal Open Market Committee meetings through July, the benchmark federal funds rate was left unchanged.

The U.S. government announced changes to its trade policies in 2025 and significantly increased tariffs on certain imports under emergency authorities, including the International Emergency Economic Powers Act (the “IEEPA”). In February 2026, the Supreme Court ruled that the IEEPA does not authorize the President to impose tariffs. The current tariff environment remains dynamic and uncertain, including with respect to replacement measures under other legal authorities. We continue to closely monitor both the impact and potential impact of such measures on our business, our customers and on overall economic conditions in the United States.

On March 19, 2026, federal banking regulators issued revised notices of proposed rulemaking to implement the final components of the Basel III accords (the “Basel III proposals”). The proposals include revisions and streamlining of the expanded risk-based approach (the “ERBA”). The proposals require the ERBA for Category I and Category II firms and allow all other banking organizations, including Category III and Category IV firms, to elect the ERBA. The proposals include a revised standardized approach for calculating risk-weighted assets applicable to all other banking organizations, including Category III and Category IV firms, that do not elect the ERBA. These proposals are expected to decrease risk-weighted assets in aggregate for the banking industry. The proposals also require Category III and Category IV firms to recognize most aspects of accumulated other comprehensive income (“AOCI”) in regulatory capital. The comment period closed on June 18, 2026. We will continue to monitor further developments regarding the proposals and assess potential impacts to our regulatory capital requirements, including enhanced capital flexibility.

Financial Performance Summary

The following tables in this MD&A include financial data for the three months ended June 30, 2026 (the “current quarter”), March 31, 2026 (the “linked quarter”) and June 30, 2025 (the “prior year quarter”), along with the six months ended June 30, 2026 (“current YTD”), and the six months ended June 30, 2025 (“prior YTD”). In accordance with Item 303(c) of Regulation S-K, we focus our discussion of quarterly results of operations on changes compared to the linked quarter for the narrative discussion and analysis 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 June 30, 2026 to December 31, 2025, however the tables also provide linked quarter balances. Percent changes within this MD&A are based on unrounded amounts and may not recalculate precisely using the displayed rounded amounts.

58

Table 1
Selected Financial Data

dollars in millions, except share data	Three Months Ended									Six Months Ended June 30,
	June 30, 2026			March 31, 2026			June 30, 2025			2026			2025
Results of Operations:
Interest income	$	2,851		$	2,786		$	2,945		$	5,637		$	5,840
Interest expense	1,195			1,165			1,250			2,360			2,482
Net interest income	1,656			1,621			1,695			3,277			3,358
(Benefit) provision for credit losses	(10)			72			115			62			269
Net interest income after provision for credit losses	1,666			1,549			1,580			3,215			3,089
Noninterest income	776			692			678			1,468			1,313
Noninterest expense	1,551			1,536			1,500			3,087			2,993
Income before income taxes	891			705			758			1,596			1,409
Income tax expense	219			171			183			390			351
Net income	672			534			575			1,206			1,058
Preferred stock dividends	32			26			14			58			29
Net income available to common stockholders	$	640		$	508		$	561		$	1,148		$	1,029
Per Common Share Information:
Weighted average common shares outstanding (diluted)	11,535,792			11,924,899			13,237,226			11,729,271			13,405,295
Diluted earnings per common share	$	55.52		$	42.63		$	42.36		$	97.95		$	76.73
Key Performance Metrics:
Return on average assets	1.15		%	0.93		%	1.01		%	1.04		%	0.94		%
Net interest margin (1)	3.10			3.09			3.26			3.09			3.26
Net interest margin, excluding purchase accounting accretion or amortization (1) (2)	3.01			3.01			3.14			3.01			3.13
Select Average Balances:
Investment securities	$	42,891		$	41,757		$	43,935		$	42,327		$	43,746
Total loans and leases (3)	150,602			149,890			141,952			150,249			141,420
Operating lease equipment, net	9,728			9,660			9,419			9,694			9,385
Total assets	235,200			233,181			227,552			234,197			226,506
Total deposits	170,639			165,927			157,664			168,296			157,024
Total borrowings	33,229			35,334			38,379			34,276			37,892
Total stockholders’ equity	22,180			22,487			22,488			22,332			22,472
	As of the Period Ending
	June 30, 2026			March 31, 2026			June 30, 2025			December 31, 2025
Select Ending Balances:
Investment securities	$	43,557		$	42,986		$	43,346		$	41,564
Total loans and leases	151,034			148,692			141,269			147,930
Operating lease equipment, net	9,755			9,685			9,466			9,621
Total assets	236,842			235,959			229,653			229,698
Total deposits	173,427			170,842			159,935			161,578
Total borrowings	32,188			33,962			38,112			36,008
Total stockholders’ equity	21,900			22,048			22,296			22,238
Loan to deposit ratio	87.09		%	87.04		%	88.33		%	91.55		%
Noninterest-bearing deposits to total deposits	24.49			25.52			25.56			25.16
Capital Ratios:
Total risk-based capital	13.37		%	13.51		%	14.25		%	13.71		%
Tier 1 risk-based capital	11.73			11.79			12.63			11.91
Common equity Tier 1	10.77			10.83			12.12			11.15
Tier 1 leverage	9.22			9.30			9.62			9.29
Select Asset Quality Metrics:
Ratio of nonaccrual loans to total loans	0.96		%	0.96		%	0.93		%	0.88		%
Allowance for loan and lease losses to loans ratio	0.98			1.05			1.18			1.06

(1)     Calculated net of average credit balances of factoring clients to appropriately reflect the interest-earning portion of factoring receivables.

(2)     Net interest margin (“NIM”), excluding purchase accounting accretion or amortization (“PAA”), is a non-GAAP financial measure. Refer to the “Net Interest Income (“NII”), NIM, and Interest Income on Loans and Leases, 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.

59

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

Current Quarter Income Statement Highlights (Current Quarter Compared to Linked Quarter)

•Net income for the current quarter was $672 million, an increase of $138 million or 26% from $534 million for the linked quarter. Net income available to common stockholders for the current quarter was $640 million, an increase of $132 million or 26% from $508 million for the linked quarter. Earnings per basic and diluted common share for the current quarter were $55.52, increases from $42.63 for the linked quarter. The increases in net income and net income available to common stockholders were due to lower provision for credit losses and higher noninterest income and NII, partially offset by higher noninterest expense and income tax expense, as discussed below.

•NII for the current quarter was $1.66 billion, an increase of $35 million or 2% from $1.62 billion for the linked quarter. NIM was 3.10% for the current quarter, an increase of 1 basis point (“bp”) from 3.09% for the linked quarter. The increases in NII and NIM were mainly due to higher yields on and average balances of loans and investment securities, and a decline in the average balance of borrowings as we repaid an additional $2.50 billion of the Purchase Money Note, partially offset by a higher average balance of and rate paid on interest-bearing deposits.

◦PAA for the current quarter was $48 million, an increase of $9 million from $39 million for the linked quarter. NIM, excluding PAA(1) was 3.01% for the current and linked quarters.

•Noninterest income for the current quarter was $776 million, an increase of $84 million or 12% from $692 million for the linked quarter, largely due to an increase in other noninterest income of $50 million, mainly attributable to a $27 million increase in the fair value of equity warrants and a $17 million gain on sale of tax credit investments, and increases of $12 million in the fair value of marketable equity securities, $6 million in client investment fees, $4 million in deposit fees and service charges, and $4 million in lending-related fees.

•Noninterest expense for the current quarter was $1.55 billion, an increase of $15 million or 1% from $1.54 billion for the linked quarter, mainly due to increases of $15 million in marketing expense, $8 million in other noninterest expense, $7 million in third-party processing fees and $5 million in equipment expense, partially offset by a decrease in personnel cost of $25 million.

•Benefit for credit losses was $10 million for the current quarter, compared to a provision for credit losses of $72 million for the linked quarter. The current quarter included a provision for loan and lease losses of $34 million that was more than offset by a benefit for off-balance sheet credit exposure of $44 million.

◦The provision for loan and lease losses for the current quarter was $34 million, compared to $103 million for the linked quarter. The $69 million decrease was mainly attributable to the impact of a $74 million reserve release in the current quarter compared to an $8 million reserve release in the linked quarter, as well as a decline of $3 million in net charge-offs.

▪The $74 million allowance for loan and lease losses (“ALLL”) reserve release in the current quarter was largely driven by lower specific reserves, improvements in credit quality including updates to certain models used to estimate the allowance as further discussed in the “Risk Management—Credit Risk—ALLL Methodology” section of this MD&A, changes in the macroeconomic scenarios, and growth concentrated in capital call lines which have a significantly lower loss rate relative to our other loan portfolios.

▪The $8 million reserve release in the linked quarter was driven by loan growth concentrated in capital call lines and changes in the macroeconomic scenarios, partially offset by higher reserves for individually evaluated loans.

◦The benefit for off-balance sheet credit exposure was $44 million, an increase of $12 million from $32 million for the linked quarter, primarily due to the model updates discussed above and changes in the macroeconomic scenarios.

•Income tax expense for the current quarter was $219 million, an increase of $48 million from $171 million for the linked quarter, largely due to higher income before income taxes.

•Return on average assets for the current quarter was 1.15%, an increase of 22 bps from 0.93% for the linked quarter due to the increase in net income explained above.

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

60

YTD Income Statement Highlights (Current YTD Compared to Prior YTD)

•Net income for the current YTD was $1.21 billion, an increase of $148 million or 14% from $1.06 billion for the prior YTD. Net income available to common stockholders for the current YTD was $1.15 billion, an increase of $119 million or 12% from $1.03 billion for the prior YTD. Earnings per basic and diluted common share for the current YTD were $97.95, increases from $76.73 for the prior YTD. The increases in net income and net income available to common stockholders were due to lower provision for credit losses and higher noninterest income, partially offset by lower NII and higher noninterest expense, as further discussed below.

•NII for the current YTD was $3.28 billion, a decrease of $81 million or 2% from $3.36 billion for the prior YTD. NIM was 3.09% for the current YTD and 3.26% for the prior YTD, a decrease of 17 bps. The decreases in NII and NIM were mainly due to a lower yield on loans, lower yields on and average balances of interest-earning deposits at banks and investment securities, lower PAA, and a higher average balance of interest-bearing deposits, partially offset by the impacts of a higher average balance of loans, a decline in the rate paid on interest-bearing deposits, and a decline in the average balance of borrowings due to continued prepayments on the Purchase Money Note.

◦PAA for the current YTD was $87 million, a decrease of $55 million from $142 million for the prior YTD. NIM, excluding PAA(1) was 3.01% for the current YTD, a decrease of 12 bps from 3.13% for the prior YTD.

•Noninterest income for the current YTD was $1.47 billion, an increase of $155 million or 12% from $1.31 billion for the prior YTD, largely due to increases in other noninterest income of $70 million, deposit fees and service charges of $27 million, a favorable change of $21 million in the fair value of marketable equity securities, along with higher rental income on operating lease equipment of $19 million, and increases of $12 million in the gain on sale of leasing equipment and $10 million in wealth management services.

•Noninterest expense for the current YTD was $3.09 billion, an increase of $94 million or 3% from $2.99 billion for the prior YTD, mainly due to increases in personnel cost of $85 million, third-party processing fees of $67 million, maintenance and other operating lease expenses of $19 million, marketing expense of $11 million, and equipment expense of $10 million, partially offset by decreases in acquisition-related expenses of $67 million and other noninterest expense of $27 million.

•Provision for credit losses for the current YTD was $62 million, a decrease of $207 million or 77% from $269 million for the prior YTD. The current YTD included a provision for loan and lease losses of $137 million, partially offset by a benefit for off-balance sheet credit exposure of $76 million.

◦The provision for loan and lease losses for the current YTD was $137 million compared to $259 million for the prior YTD. The $122 million decrease was mainly due to an $82 million ALLL reserve release in the current YTD compared to $4 million in the prior YTD and a decline in net charge-offs of $44 million.

▪The $82 million ALLL reserve release for the current YTD is discussed above as the “Current Quarter Income Statement Highlights” section of this MD&A summarizes the ALLL reserve releases of $74 million and $8 million for the current and linked quarters, respectively.

◦The benefit for off-balance sheet credit exposure for the current YTD was $76 million compared to a provision for the prior YTD of $10 million, resulting in a decrease in provision of $86 million, primarily due to the model updates discussed above in the “Current Quarter Income Statement Highlights” section of this MD&A and changes in the macroeconomic scenarios.

•Income tax expense for the current YTD was $390 million, an increase of $39 million from $351 million for the prior YTD, largely due to higher income before income taxes.

•Return on average assets for the current YTD was 1.04%, an increase of 10 bps from 0.94% for the prior YTD due to the increase in net income explained above.

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

61

Balance Sheet Highlights

•Loans and leases at June 30, 2026 were $151.03 billion, an increase of $3.10 billion or 2% from $147.93 billion at December 31, 2025. Commercial Bank segment loan growth of $3.73 billion, mainly concentrated in Global Fund Banking, was partially offset by a decrease in General Bank segment loans of $603 million, largely due to the $363 million in amortized cost of SBA commercial loans sold in the SBA Securitization.

•Investment securities at June 30, 2026 were $43.56 billion, an increase of $1.99 billion or 5% from $41.56 billion at December 31, 2025, as purchases of available for sale U.S. treasury securities were partially offset by maturities and paydowns.

•Deposits at June 30, 2026 were $173.43 billion, an increase of $11.85 billion or 7% from $161.58 billion at December 31, 2025. As shown in Table 2 and discussed below, the increase from December 31, 2025 was attributable to deposit growth in Corporate of $6.77 billion primarily due to the Direct Bank and brokered deposits, the Commercial Bank segment of $4.16 billion, and the General Bank segment of $922 million. Noninterest-bearing deposits grew by $1.82 billion or 5% compared to December 31, 2025, and represented 24.5% of total deposits as of June 30, 2026, compared to 25.2% at December 31, 2025.

•Borrowings at June 30, 2026 were $32.19 billion, a decrease of $3.82 billion or 11% from $36.01 billion at December 31, 2025. The decrease was primarily due to prepayments of $5.00 billion on the Purchase Money Note, partially offset by debt issuances of $1.25 billion.

•The ALLL was $1.48 billion at June 30, 2026, compared to $1.57 billion at December 31, 2025, resulting in an ALLL reserve release of $82 million for the current YTD as further discussed above in the “YTD Income Statement Highlights” section of this MD&A. The ALLL as a percentage of loans was 0.98% at June 30, 2026, a decrease of 8 bps from 1.06% at December 31, 2025.

•Interest-earning deposits at banks were $21.13 billion at June 30, 2026, an increase of $1.33 billion compared to $19.80 billion at December 31, 2025, a function of the balance sheet trends discussed above.

•At June 30, 2026, BancShares remained well capitalized with a total risk-based capital ratio of 13.37%, a Tier 1 risk-based capital ratio of 11.73%, a Common Equity Tier 1 (“CET1”) ratio of 10.77% and a Tier 1 leverage ratio of 9.22%.

Funding, Liquidity and Capital Overview

Deposit Composition and Trends

We primarily fund our business through deposits. Deposits represented 84% of total funding at June 30, 2026.

Table 2
Deposit Trends

dollars in millions	Deposit Balance
	June 30, 2026		March 31, 2026		December 31, 2025
General Bank segment	$	75,718	$	75,914	$	74,796
Commercial Bank segment	45,690		47,191		41,532
Corporate and Rail segment	52,019		47,737		45,250
Total deposits	$	173,427	$	170,842	$	161,578

Deposit trends for the segments and Corporate at June 30, 2026 compared to December 31, 2025 are discussed below:

•Corporate deposit growth of $6.77 billion was primarily due to Direct Bank and brokered deposit growth of $3.42 billion and $3.32 billion, respectively. We utilized brokered deposits more prevalently in 2026 as rates were favorable relative to Direct Bank deposits. We will continue to monitor the rate environments for brokered and Direct Bank deposits to determine the target growth for these deposit channels.

•Commercial Bank segment deposit growth of $4.16 billion was mainly in Global Fund Banking and Tech and Healthcare lines of business. Most of the growth was in noninterest-bearing deposits and interest-bearing checking.

•General Bank segment deposit growth of $922 million was primarily concentrated in our Branch Network. Deposit growth was mostly in time deposits and noninterest-bearing deposits.

Refer to the “Results by Segment” for further discussion of changes in deposits at June 30, 2026 compared to March 31, 2026.

Total uninsured deposits were $65.06 billion or 38% of total deposits at June 30, 2026 and $61.81 billion or 38% at December 31, 2025.

62

Refer to the “Balance Sheet Analysis—Interest-bearing Liabilities—Deposits” section of this MD&A for further discussion of deposits.

Liquidity Position

We strive to maintain a strong liquidity position and our risk appetite for liquidity is low. At June 30, 2026, we had $59.14 billion in high-quality liquid assets consisting of $20.18 billion in cash and interest-earning deposits at banks (primarily held at the Federal Reserve Bank (“FRB”)) and $38.96 billion in high-quality liquid securities (“HQLS”), mainly comprised 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 $17.75 billion and $12.77 billion, respectively. Refer to the “Risk Management—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, which had a carrying value of $28.42 billion at June 30, 2026. While scheduled principal payments are not required until maturity in March 2028, FCB may voluntarily prepay principal without a premium or penalty. FCB prepaid $2.50 billion of the Purchase Money Note during the current quarter ($5.00 billion during the current YTD), and previously prepaid $2.49 billion in December 2025, which reduced the outstanding balance from $35.85 billion at September 30, 2025 to $28.42 billion at June 30, 2026. Additionally, we prepaid $1.00 billion in July 2026. We will continue to monitor the interest rate environment, FCB’s collateral position for the Purchase Money Note, and FCB’s liquidity position to determine the timing and magnitude of further voluntary prepayments. We expect monthly prepayments to be at least $500 million throughout 2026. In the third quarter of 2026, we expect total prepayments of $6 billion to $8 billion, largely driven by expected liquidity from the BMO Branch Acquisition. Potential sources that could fund voluntary prepayments or the amount due at maturity include excess liquidity (primarily comprised of interest-earning deposits at banks and proceeds from maturities and paydowns of investment securities), deposit growth including brokered deposits and deposits to be assumed in the BMO Branch Acquisition, loan sales or securitizations, FHLB advances, and issuance of perpetual preferred stock, unsecured debt or other borrowings.

Investment Securities Duration

At June 30, 2026, 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 2.6 years at June 30, 2026. 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 3.9 years. Refer to the “Balance Sheet Analysis—Interest-earning Assets—Investment Securities” section of this MD&A and Note 3—Investment Securities for further information.

Table 3
Investment Securities Summary

dollars in millions	June 30, 2026
	Composition (1)		Amortized Cost		Fair Value		Fair Value to Amortized Cost
Total investment securities available for sale	80.2	%	$	34,510	$	33,983	98.5	%
Total investment securities held to maturity	19.4		9,418		8,214		87.2
Investment in marketable equity securities	0.4		95		156		164.5
Total investment securities	100.0	%	$	44,023	$	42,353
(1) Calculated as a percentage of the total fair value of investment securities.

Capital Position

At June 30, 2026, all regulatory capital ratios for BancShares and FCB exceeded the prompt corrective action (“PCA”) thresholds, well capitalized thresholds, and Basel III requirements established by the federal banking agencies as further discussed in the “Capital” section of this MD&A.

63

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.

64

Table 4
Average Balances, Yields and Rates, NII, and NIM (Current Quarter Compared 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:
	Jun 30, 2026		Mar 31, 2026						Jun 30, 2026		Mar 31, 2026		Increase (Decrease) bps	Jun 30, 2026		Mar 31, 2026		Increase (Decrease)		Volume(1)		Yield /Rate(1)
Loans and leases (1) (2)	$	149,275	$	148,666	$	609	0.4	%	6.05	%	6.01	%	4	$	2,253	$	2,206	$	47	$	16	$	31
Investment securities	42,891		41,757		1,134		2.7		3.72		3.67		5	398		382		16		11		5
Securities purchased under agreements to resell	323		305		18		5.7		3.60		3.65		(5)	3		2		1		1		—
Interest-earning deposits at banks	21,501		21,824		(323)		(1.5)		3.67		3.64		3	197		196		1		(2)		3
Total interest-earning assets (2)	$	213,990	$	212,552	$	1,438	0.7		5.34		5.30		4	$	2,851	$	2,786	$	65	$	26	$	39
Noninterest-earning assets	21,210		20,629		581		2.8
Total assets	$	235,200	$	233,181	$	2,019	0.9
Interest-bearing deposits
Checking with interest	$	26,146	$	25,341	$	805	3.2	%	1.60	%	1.52	%	8	$	104	$	95	$	9	$	3	$	6
Money market	40,889		41,196		(307)		(0.7)		2.35		2.38		(3)	240		242		(2)		(1)		(1)
Savings	48,357		46,720		1,637		3.5		3.48		3.46		2	420		398		22		18		4
Time deposits	13,993		11,946		2,047		17.1		3.36		3.31		5	117		98		19		18		1
Total interest-bearing deposits	129,385		125,203		4,182		3.3		2.73		2.70		3	881		833		48		38		10
Borrowings:
Short-term borrowings	162		197		(35)		(17.6)		0.35		0.37		(2)	—		—		—		—		—
Senior unsecured borrowings	1,136		718		418		58.2		5.13		5.23		(10)	14		10		4		4		—
Subordinated debt	1,755		1,771		(16)		(0.9)		5.27		5.28		(1)	24		23		1		1		—
Other borrowings	30,176		32,648		(2,472)		(7.6)		3.66		3.66		—	276		299		(23)		(23)		—
Long-term borrowings	33,067		35,137		(2,070)		(5.9)		3.80		3.78		2	314		332		(18)		(18)		—
Total borrowings	33,229		35,334		(2,105)		(6.0)		3.78		3.76		2	314		332		(18)		(18)		—
Total interest-bearing liabilities	$	162,614	$	160,537	$	2,077	1.3	%	2.95		2.93		2	$	1,195	$	1,165	$	30	$	20	$	10
Noninterest-bearing liabilities	$	50,406	$	50,157	$	249	0.5	%
Stockholders' equity	22,180		22,487		(307)		(1.4)
Total liabilities and stockholders’ equity	$	235,200	$	233,181	$	2,019	0.9
Net interest spread (2)									2.39	%	2.37	%	2
Net interest margin and net interest income (2)									3.10	%	3.09	%	1	$	1,656	$	1,621	$	35

(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.

65

NII and NIM (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 earned and rates paid. The main reasons for the increases and decreases are explained below:

•NII for the current quarter was $1.66 billion, an increase of $35 million or 2% from $1.62 billion for the linked quarter. NII, excluding PAA,(1) was $1.61 billion for the current quarter, an increase of $26 million, from $1.58 billion for the linked quarter. The main reasons for the increases in NII and NII, excluding PAA,(1) are explained below:

◦Interest income on loans and leases for the current quarter was $2.25 billion, an increase of $47 million or 2% from $2.21 billion for the linked quarter, mainly due to a higher yield, a higher average balance, and higher loan PAA.

▪Interest income on loans and leases, excluding loan PAA,(1) was $2.20 billion for the current quarter, an increase of $40 million or 2% from $2.16 billion for the linked quarter. Loan PAA was $55 million in the current quarter, an increase of $7 million or 16% from $48 million in the linked quarter, mainly a result of accelerated PAA for prepayments of residential mortgage loans.

◦Interest expense on borrowings for the current quarter was $314 million, a decrease of $18 million or 5% from $332 million for the linked quarter, mainly due to a decline in the average balance as we repaid an additional $2.50 billion of the Purchase Money Note, partially offset by the Current Quarter Debt Issuance.

◦Interest income on investment securities (including securities purchased under agreements to resell) for the current quarter was $401 million, an increase of $17 million or 4% from $384 million for the linked quarter, due to a higher yield and a higher average balance.

◦Interest expense on interest-bearing deposits for the current quarter was $881 million, an increase of $48 million or 6% from $833 million for the linked quarter, due to a higher average balance and a higher rate paid.

•NIM for the current quarter was 3.10%, an increase of 1 bp from 3.09% for the linked quarter. NIM, excluding PAA,(1) was 3.01% for the current and linked quarters. The modest increase in NIM was mainly due to higher yields on and average balances of loans and investment securities, and a decline in the average balance of borrowings as we repaid an additional $2.5 billion of the Purchase Money Note, partially offset by a higher average balance of and rate paid on interest-bearing deposits.

◦The yield on average interest-earning assets for the current quarter was 5.34%, an increase of 4 bps from 5.30% for the linked quarter, mainly due to higher yields on and average balances of loans and investment securities.

◦The rate paid on average interest-bearing liabilities for the current quarter was 2.95%, an increase of 2 bps from 2.93% for the linked quarter, primarily due to increases in the average balance of and rate paid on interest-bearing deposits, partially offset by the impact of lower average borrowings.

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

Refer to the “Executive Overview—Financial Performance Summary—Balance Sheet Highlights,” “Balance Sheet Analysis—Interest-earning Assets,” and “Balance Sheet Analysis—Interest-bearing Liabilities” sections of this MD&A for discussions of balance sheet trends that impact average interest-earning assets, average interest-bearing liabilities, and the related yields and rates paid.

66

Table 5
Average Balances, Yields and Rates, NII, and NIM (Current Quarter Compared to Prior Year 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:
	Jun 30, 2026		Jun 30, 2025						Jun 30, 2026		Jun 30, 2025		Increase (Decrease) bps	Jun 30, 2026		Jun 30, 2025		Increase (Decrease)		Volume(1)		Yield /Rate(1)
Loans and leases (1) (2)	$	149,275	$	140,699	$	8,576	6.1	%	6.05	%	6.47	%	(42)	$	2,253	$	2,270	$	(17)	$	134	$	(151)
Investment securities	42,891		43,935		(1,044)		(2.4)		3.72		3.79		(7)	398		416		(18)		(10)		(8)
Securities purchased under agreements to resell	323		237		86		36.2		3.60		4.34		(74)	3		3		—		1		(1)
Interest-earning deposits at banks	21,501		23,304		(1,803)		(7.8)		3.67		4.40		(73)	197		256		(59)		(19)		(40)
Total interest-earning assets (2)	$	213,990	$	208,175	$	5,815	2.8		5.34		5.67		(33)	$	2,851	$	2,945	$	(94)	$	106	$	(200)
Noninterest-earning assets	21,210		19,377		1,833		9.5
Total assets	$	235,200	$	227,552	$	7,648	3.4
Interest-bearing deposits
Checking with interest	$	26,146	$	22,929	$	3,217	14.0	%	1.60	%	1.69	%	(9)	$	104	$	97	$	7	$	12	$	(5)
Money market	40,889		37,980		2,909		7.7		2.35		2.84		(49)	240		269		(29)		20		(49)
Savings	48,357		46,163		2,194		4.8		3.48		3.72		(24)	420		428		(8)		20		(28)
Time deposits	13,993		11,510		2,483		21.6		3.36		3.48		(12)	117		100		17		21		(4)
Total interest-bearing deposits	129,385		118,582		10,803		9.1		2.73		3.02		(29)	881		894		(13)		73		(86)
Borrowings:
Short-term borrowings	162		471		(309)		(65.5)		0.35		0.57		(22)	—		—		—		—		—
Senior unsecured borrowings	1,136		555		581		104.5		5.13		5.27		(14)	14		8		6		6		—
Subordinated debt	1,755		1,473		282		19.2		5.27		5.23		4	24		19		5		5		—
Other borrowings	30,176		35,880		(5,704)		(15.9)		3.66		3.66		—	276		329		(53)		(53)		—
Long-term borrowings	33,067		37,908		(4,841)		(12.8)		3.80		3.74		6	314		356		(42)		(42)		—
Total borrowings	33,229		38,379		(5,150)		(13.4)		3.78		3.71		7	314		356		(42)		(42)		—
Total interest-bearing liabilities	$	162,614	$	156,961	$	5,653	3.6	%	2.95		3.19		(24)	$	1,195	$	1,250	$	(55)	$	31	$	(86)
Noninterest-bearing liabilities	$	50,406	$	48,103	$	2,303	4.8	%
Stockholders' equity	22,180		22,488		(308)		(1.4)
Total liabilities and stockholders’ equity	$	235,200	$	227,552	$	7,648	3.4
Net interest spread (2)									2.39	%	2.48	%	(9)
Net interest margin and net interest income (2)									3.10	%	3.26	%	(16)	$	1,656	$	1,695	$	(39)

(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.

67

Table 6
Average Balances, Yields and Rates, NII, and NIM (Current YTD Compared to Prior YTD)

dollars in millions	Average Balance			Yield / Rate			Interest Income / Expense
	Six Months Ended		Increase (Decrease)	Six Months Ended			Six Months Ended			Increase (Decrease) due to:
	Jun 30, 2026	Jun 30, 2025		Jun 30, 2026	Jun 30, 2025	Increase (Decrease) bps	Jun 30, 2026	Jun 30, 2025	Increase (Decrease)