RALEIGH, N.C., July 28, 2022 (GLOBE NEWSWIRE) -- First Citizens BancShares, Inc. ("BancShares") (NASDAQ:FCNCA) reported earnings for the second quarter and year to date period ended June 30, 2022.

Chairman and CEO, Frank B. Holding, Jr. on second quarter results, "We are pleased to announce another quarter of solid results. Our integration efforts remain on track, and we completed our first major customer conversion of the OneWest Bank division and certain CIT treasury management customers. Merger integration is now substantially complete with some optimization efforts continuing into 2023. In addition, we are excited to announce that our Board of Directors approved a share repurchase plan which will allow us to repurchase up to 1.5 million shares of our Class A common stock over the next 12 months. Returning excess capital to our shareholders is a key strategic focus and we are excited about the opportunity to execute on the plan.

"Loan growth was strong this quarter, and pre-provision net revenue continued its momentum as our net interest margin expanded, our fee income producing lines of business performed well and expense control remained solid. We remain committed to achieving our cost savings goal as we continue to optimize our operations."

FINANCIAL HIGHLIGHTS

Second quarter net income available to common stockholders was $238 million, or $14.86 per share, compared to first quarter net income available to common stockholders of $264 million or $16.70 per share. Adjusted for notable items, second quarter net income available to common stockholders was $270 million or $16.86, down from $299 million, or $18.95 per share in the first quarter of 2022.

The primary driver of the decline in adjusted net income was a provision expense in the second quarter totaling $42 million versus a $49 million benefit in the first quarter. The increase in provision expense was largely offset by solid pre-provision net revenue growth.

BancShares completed the acquisition of CIT Group, Inc. ("CIT") on January 3, 2022 (the "CIT Merger"). BancShares' financial information presented for the periods ended March 31, 2022 and June 30, 2022 reflects the acquisition of CIT. Certain historical financial information referenced as "Combined" in the commentary below reflects the combination of BancShares and CIT for historical periods prior to completion of the CIT Merger. For Combined financial information, refer to pages 8 through 12. For GAAP financial information, refer to pages 5 through 7. Certain financial results referenced as "Adjusted" in the commentary below excludes notable items, which are detailed on page 10. For Adjusted financial information, refer to page 11. The Combined and Adjusted financial information are non-GAAP measures.

2Q22 vs 1Q22:

Adjusted pre-provision net revenue increased by $60 million over the first quarter due to growth in net revenue as net interest margin expanded and fee income grew, while expenses declined.
Net interest income increased by $51 million. Interest income increased $47 million due to higher interest income on loans, as earning asset yields rose, and we experienced strong loan growth. Interest expense declined by $4 million as an increase in interest expense on deposits was more than offset by a decline in interest on borrowings.
Net interest margin expanded from 2.73% to 3.04% due primarily to higher loan yields and balances, the impact of the $3 billion debt redemption in the first quarter and higher yields on investment securities and overnight investments, partially offset by higher deposit rates and lower SBA-PPP income.
Adjusted noninterest income increased by $3 million. The increase was primarily due to higher capital markets and wealth management revenue, partially offset by a decline in rental income on operating leases, net.
Adjusted noninterest expense decreased by $6 million primarily due to a decline in personnel expense.
Provision for credit losses, adjusted for the CECL Day 2 provision, increased by $91 million primarily due to changes in CECL macroeconomic forecasts and loan growth.
Total loans increased $2.2 billion or by 13.5% on an annualized basis. We experienced strong growth in our branch network and residential mortgage portfolio as well as in our commercial bank from a number of our industry verticals, middle market banking and business capital.
Deposits declined $2.3 billion or by 9.9% on an annualized basis. The main components of the decline were a $3.0 billion decline in interest-bearing deposits (money market deposits and time deposits) as we saw sensitive customers begin to move funds in response to recent rate increases. The reductions were primarily concentrated in acquired higher cost channels including the direct bank and legacy OneWest branches, offset by growth in our branch network. These declines in interest-bearing deposits were offset by growth in noninterest-bearing deposits of $747 million, or 11.6% annualized.

2Q22 vs 2Q21 (Combined):

Adjusted pre-provision net revenue increased by $114 million or 37.6% due to double digit percentage growth in net revenue as net interest margin expanded and fee income grew, while expenses increased at a modest pace.
Net interest income increased by $88 million. Interest income increased $24 million due to higher yields on investment securities and overnight investments, partially offset by reduced accretion income on acquired loans and SBA-PPP income. Interest expense declined $64 million driven primarily by lower borrowings.
Net interest margin improved from 2.56% to 3.04% due primarily to the impact of the $3 billion debt redemption in the first quarter, higher earning asset yields, partially offset by lower SBA-PPP income, lower accretion income and a reduction in loan balances.
Adjusted noninterest income increased by $37 million primarily due to higher rental income on operating leases, net and increases in wealth management income, service charges on deposits and card income.
Adjusted noninterest expense increased $11 million due to higher personnel costs, increased occupancy and equipment expense and higher third-party processing fees, partially offset by declines in professional fees and FDIC insurance expense.
Provision for credit losses increased by $136 million primarily due to changes in CECL macroeconomic forecasts, releases of COVID-related reserves in the second quarter of 2021 and loan growth.
Loans increased $1.3 billion or by 2.0%. Excluding the impact of SBA-PPP loans and purchase accounting adjustments, loans increased $2.8 billion or by 4.3%. Growth was attributable to the same factors as noted for the linked quarter above.
Deposits declined $367 million or by 0.4% compared to the prior year quarter. The decline was a result of a $2.5 billion reduction in interest-bearing deposits partially offset by a $2.1 billion increase in noninterest-bearing deposits. The changes are due to similar reasons as noted for the linked quarter.

EARNINGS CALL DETAILS

BancShares will host a conference call to discuss the company's financial results on Thursday, July 28, 2022, at 9 a.m. Eastern time.

To access this call, dial:

Domestic: 1-844-200-6205

Canada: 1-833-950-0062

All other locations: +1 929-526-1599

Access code: 158564

The second quarter 2022 earnings presentation and this news release are available on the company's website at www.firstcitizens.com/investor-relations.

After the conference call, you may access a replay of the call through August 18, 2022, by dialing 1-866-813-9403 (domestic), 1-226-828-7578 (Canada) or +44 204-525-0658 (all other locations) using the access code 908758.

ABOUT FIRST CITIZENS BANCSHARES

First Citizens BancShares, Inc. is the financial holding company for First Citizens Bank. In January 2022, First Citizens BancShares and CIT Group Inc. merged, creating one of the top 20 U.S. financial institutions, with over $100 billion in assets.

First Citizens Bank helps personal, business, commercial and wealth clients build financial strength that lasts. As the largest family-controlled bank in the United States, First Citizens is continuing a unique legacy of strength, stability and long-term thinking that has spanned generations. Its commercial banking segment brings a wide array of best-in-class lending, leasing and banking services to middle-market companies and small businesses from coast to coast. Founded in 1898 and headquartered in Raleigh, N.C., First Citizens also operates a nationwide direct bank and a network of more than 550 branches in 22 states, many in high-growth markets. Visit firstcitizens.com. First Citizens Bank. Forever First®

FORWARD-LOOKING STATEMENTS

This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and future performance of BancShares. Words such as "anticipates," "believes," "estimates," "expects," "predicts," "forecasts," "intends," "plans," "projects," "targets," "designed," "could," "may," "should," "will," "potential," "continue", "aims" or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on BancShares' current expectations and assumptions regarding BancShares' business, the economy, and other future conditions.

Because forward-looking statements relate to future results and occurrences, they are subject to inherent risks, uncertainties, changes in circumstances and other risk factors that are difficult to predict. Many possible events or factors could affect BancShares' future financial results and performance and could cause the actual results, performance or achievements of BancShares to differ materially from any anticipated results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, general competitive, economic, political, geopolitical events (including the military conflict between Russia and Ukraine) and market conditions, the impacts of the global COVID-19 pandemic on BancShares' business and customers, the financial success or changing conditions or strategies of BancShares' customers or vendors, fluctuations in interest rates, actions of government regulators, including the recent and projected interest rate hikes by the Board of Governors of the Federal Reserve Board (the "Federal Reserve"), the potential impact of decisions by the Federal Reserve on BancShares' capital plans, adverse developments with respect to U.S. or global economic conditions, the impact of the current inflationary environment, the impact of implementation and compliance with current or proposed laws, regulations and regulatory interpretations, the availability of capital and personnel, and the failure to realize the anticipated benefits of BancShares' previous acquisition transaction(s), including the recently completed transaction with CIT, which acquisition risks include (1) disruption from the transaction, or recently completed mergers, with customer, supplier or employee relationships, (2) the possibility that the amount of the costs, fees, expenses and charges related to the transaction may be greater than anticipated, including as a result of unexpected or unknown factors, events or liabilities, (3) reputational risk and the reaction of the parties' customers to the transaction, (4) the risk that the cost savings and any revenue synergies from the transaction may not be realized or take longer than anticipated to be realized, and (5) difficulties experienced in the integration of the businesses.

Except to the extent required by applicable laws or regulations, BancShares disclaims any obligation to update forward-looking statements or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Additional factors which could affect the forward-looking statements can be found in BancShares' Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and its other filings with the Securities and Exchange Commission (the "SEC").

SUPPLEMENTAL FINANCIAL TABLES

The following section includes supplemental financial information and key performance metrics for current and historical periods.

Certain measures in these tables, including the previously defined Combined and Adjusted financial information, are "Non-GAAP," meaning they are not presented in accordance with generally accepted accounting principles in the U.S. and also are not codified in U.S. banking regulations currently applicable to BancShares. BancShares believes that Non-GAAP financial measures, when reviewed in conjunction with GAAP financial information, can provide transparency about or an alternative means of assessing its operating results and financial position to its investors, analysts and management. The Non-GAAP measures are reconciled to the most comparable GAAP measure, in the Non-GAAP reconciliation table(s).

Dollars in millions, except per share data
Summary Financial Data & Key Metrics ⁽¹⁾		BancShares 2Q22		BancShares 1Q22		BancShares 2Q21		BancShares YTD22		BancShares YTD21
Key Performance Metrics:
Diluted earnings per common share (EPS)	$	14.86		16.70		15.09		31.48		29.63
Diluted earnings per common share (EPS) - adjusted		16.86		18.95		13.63		35.67		26.99
Book value per common share		609.95		605.48		421.39		609.95		421.39
Tangible book value per common share (TBV)		578.92		574.09		383.19		578.92		383.19
Return on average assets (ROA)		0.95	%	1.00	%	1.13	%	0.97	%	1.14	%
Return on average assets (ROA) - adjusted		1.07	%	1.12	%	1.02	%	1.10	%	1.04	%
Return on average common equity (ROE)		9.87	%	11.18	%	14.64	%	10.51	%	14.67	%
Return on average common equity (ROE) - adjusted		11.19	%	12.67	%	13.23	%	11.91	%	13.37	%
Return on average tangible common equity (ROTCE)		10.40	%	11.83	%	16.14	%	11.11	%	16.21	%
Return on average tangible common equity (ROTCE) - adjusted		11.80	%	13.41	%	14.58	%	12.58	%	14.76	%
Efficiency ratio		57.55	%	61.57	%	64.61	%	59.50	%	63.98	%
Net interest margin (NIM)		3.04	%	2.73	%	2.67	%	2.89	%	2.73	%

Select Balance Sheet Items:
Total investment securities	$	19,136		19,469		10,895		19,136		10,895
Total loans and leases		67,735		65,524		32,690		67,735		32,690
Total operating lease equipment, net		7,971		7,972		—		7,971		—
Total deposits		89,329		91,597		48,410		89,329		48,410
Total borrowings		3,813		2,676		1,225		3,813		1,225
Loan to deposit ratio		75.83	%	71.54	%	67.53	%	75.83	%	67.53	%
Noninterest-bearing deposits to total deposits		29.83	%	28.27	%	43.33	%	29.83	%	43.33	%

Capital Ratios: ⁽²⁾
Total risk-based capital ratio		14.46	%	14.47	%	14.15	%	14.46	%	14.15	%
Tier 1 risk-based capital ratio		12.37	%	12.39	%	12.13	%	12.37	%	12.13	%
Common equity Tier 1 ratio		11.34	%	11.34	%	11.14	%	11.34	%	11.14	%
Tier 1 leverage capital ratio		9.85	%	9.55	%	7.67	%	9.85	%	7.67	%

Asset Quality:
Nonaccrual loans to total loans and leases		0.76	%	0.82	%	0.57	%	0.76	%	0.57	%
Allowance for credit losses (ACL) to loans and leases		1.26	%	1.29	%	0.58	%	1.26	%	0.58	%
Net charge-off ratio		0.13	%	0.09	%	0.02	%	0.11	%	0.02	%

_{⁽¹⁾ The financial information above is BancShares GAAP and Adjusted (non-GAAP) information.}
_{⁽²⁾ Capital ratios for the current quarter are preliminary pending completion of quarterly regulatory filings.}

Dollars in millions, except share and per share data
Income Statement (unaudited) ⁽¹⁾		BancShares 2Q22		BancShares 1Q22		BancShares 2Q21		BancShares YTD22		BancShares YTD21
INTEREST INCOME
Interest and fees on loans	$	655		621		324		1,276		647
Interest on investment securities		89		83		36		172		66
Interest on deposits at banks		13		6		2		19		4
Total interest income		757		710		362		1,467		717
INTEREST EXPENSE
Deposits		42		39		8		81		17
Borrowings		15		22		8		37		14
Total interest expense		57		61		16		118		31
Net interest income		700		649		346		1,349		686
Provision (benefit) for credit losses		42		464		(20	)	506		(31	)
Net interest income after provision for credit losses		658		185		366		843		717
NONINTEREST INCOME
Rental income on operating leases		213		208		—		421		—
Fee income and other service charges		39		35		10		74		21
Wealth management services		37		35		32		72		64
Service charges on deposit accounts		28		28		21		56		43
Factoring commissions		27		27		—		54		—
Cardholder services, net		26		25		22		51		42
Merchant services, net		9		10		8		19		17
Insurance commissions		11		12		4		23		8
Realized gain on sales of investment securities available for sale, net		—		—		16		—		25
Fair value adjustment on marketable equity securities, net		(6	)	3		12		(3	)	28
Bank-owned life insurance		9		8		—		17		1
Gain on sales of leasing equipment, net		5		6		—		11		—
Gain on acquisition		—		431		—		431		—
Gain on extinguishment of debt		—		6		—		6		—
Other noninterest income		26		16		8		42		21
Total noninterest income		424		850		133		1,274		270
NONINTEREST EXPENSE
Depreciation on operating lease equipment		89		81		—		170		—
Maintenance and other operating lease expenses		47		43		—		90		—
Salaries and benefits		341		352		188		693		372
Net occupancy expense		48		49		28		97		58
Equipment expense		54		52		29		106		59
Professional fees		15		16		4		31		8
Third-party processing fees		26		24		14		50		28
FDIC insurance expense		9		12		4		21		7
Marketing		9		8		2		17		4
Merger-related expenses		34		135		6		169		13
Intangible asset amortization		6		6		3		12		6
Other noninterest expense		67		32		22		99		42
Total noninterest expense		745		810		300		1,555		597
Income before income taxes		337		225		199		562		390
Income tax expense (benefit)		82		(46	)	46		36		90
Net income	$	255		271		153		526		300
Preferred stock dividends		17		7		5		24		9
Net income available to common stockholders	$	238		264		148		502		291

Basic earnings per common share	$	14.87		16.70		15.09		31.52		29.63
Diluted earnings per common share	$	14.86		16.70		15.09		31.48		29.63
Weighted average common shares outstanding (basic)		16,023,613		15,779,153		9,816,405		15,918,978		9,816,405
Weighted average common shares outstanding (diluted)		16,035,090		15,779,153		9,816,405		15,937,826		9,816,405

_{⁽¹⁾ The financial information above is BancShares GAAP information.}

Dollars in millions
Balance Sheet (unaudited) ⁽¹⁾		BancShares 2Q22		BancShares 1Q22		BancShares 2Q21
ASSETS
Cash and due from banks	$	583		523		395
Interest-earning deposits at banks		6,476		9,285		7,871
Securities purchased under agreements to resell		—		—		—
Investment in marketable equity securities		94		100		119
Investment securities available for sale		9,210		9,295		7,381
Investment securities held to maturity		9,832		10,074		3,395
Assets held for sale		38		83		108
Loans and leases		67,735		65,524		32,690
Allowance for credit losses		(850	)	(848	)	(189	)
Loans and leases, net of allowance for credit losses		66,885		64,676		32,501
Operating lease equipment, net		7,971		7,972		—
Premises and equipment, net		1,415		1,431		1,238
Bank-owned life insurance		1,334		1,326		115
Goodwill		346		346		350
Other intangible assets		150		156		25
Other assets		3,339		3,330		1,677
Total assets	$	107,673		108,597		55,175

LIABILITIES
Deposits
Noninterest-bearing	$	26,645		25,898		20,974
Interest-bearing		62,684		65,699		27,436
Total deposits		89,329		91,597		48,410
Credit balances of factoring clients		1,070		1,150		—
Securities sold under customer repurchase agreements		646		616		693
Federal Home Loan Bank borrowings		1,785		639		647
Senior unsecured borrowings		892		895		—
Subordinated debt		1,055		1,058		497
Other borrowings		81		84		81
Other liabilities		2,173		1,988		370
Total liabilities	$	97,031		98,027		50,698

STOCKHOLDERS' EQUITY
Preferred stock		881		881		340
Common Stock:
Class A		15		15		9
Class B		1		1		1
Additional paid in capital		5,345		5,344		—
Retained earnings		4,865		4,634		4,149
Accumulated other comprehensive (loss)		(465	)	(305	)	(22	)
Total stockholders' equity		10,642		10,570		4,477
Total liabilities and stockholders' equity	$	107,673		108,597		55,175


_{⁽¹⁾ The financial information above is BancShares GAAP information.}

Dollars in millions, except per share data
Summary Financial Data & Key Metrics		BancShares 2Q22		BancShares 1Q22		Combined ⁽¹⁾2Q21		BancShares YTD22		Combined ⁽¹⁾YTD21
Key Performance Metrics:
Diluted earnings per common share (EPS)	$	14.86		16.70		15.09		31.48		29.63
Diluted earnings per common share (EPS) - adjusted		16.86		18.95		13.63		35.67		26.99
Book value per common share		609.95		605.48		421.39		609.95		421.39
Tangible book value per common share (TBV)		578.92		574.09		383.19		578.92		383.19
Return on average assets (ROA)		0.95	%	1.00	%	1.13	%	0.97	%	1.14	%
Return on average assets (ROA) - adjusted		1.07	%	1.12	%	1.02	%	1.10	%	1.04	%
Return on average common equity (ROE)		9.87	%	11.18	%	14.64	%	10.51	%	14.67	%
Return on average common equity (ROE) - adjusted		11.19	%	12.67	%	13.23	%	11.91	%	13.37	%
Return on average tangible common equity (ROTCE)		10.40	%	11.83	%	16.14	%	11.11	%	16.21	%
Return on average tangible common equity (ROTCE) - adjusted		11.80	%	13.41	%	14.58	%	12.58	%	14.76	%
Efficiency ratio		57.55	%	61.57	%	64.73	%	59.50	%	64.17	%
Net interest margin (NIM)		3.04	%	2.73	%	2.56	%	2.89	%	2.58	%

Select Balance Sheet Items:
Total investment securities	$	19,136		19,469		16,129		19,136		16,129
Total loans and leases		67,735		65,524		66,401		67,735		66,401
Total operating lease equipment, net		7,971		7,972		7,782		7,971		7,782
Total deposits		89,329		91,597		89,696		89,329		89,696
Total borrowings		3,813		2,676		5,469		3,813		5,469
Loan to deposit ratio		75.83	%	71.54	%	74.03	%	75.83	%	74.03	%
Noninterest-bearing deposits to total deposits		29.83	%	28.27	%	27.32	%	29.83	%	27.32	%

Capital Ratios: ⁽²⁾
Total risk-based capital ratio		14.46	%	14.47	%	14.15	%	14.46	%	14.15	%
Tier 1 risk-based capital ratio		12.37	%	12.39	%	12.13	%	12.37	%	12.13	%
Common equity Tier 1 ratio		11.34	%	11.34	%	11.14	%	11.34	%	11.14	%
Tier 1 leverage capital ratio		9.85	%	9.55	%	7.67	%	9.85	%	7.67	%

Asset Quality:
Nonaccrual loans to total loans and leases		0.76	%	0.82	%	1.11	%	0.76	%	1.11	%
Allowance for credit losses (ACL) to loans and leases		1.26	%	1.29	%	1.57	%	1.26	%	1.57	%
Net charge-off ratio		0.13	%	0.09	%	0.16	%	0.11	%	0.12	%

_{⁽¹⁾ EPS, book value per common shares, TBV per common share, ROA, ROE, ROTCE and all capital ratios for the quarter-to-date and year-to-date periods ending June 30, 2021 are based on historical BancShares financial information, which excludes CIT.}
_{⁽²⁾ Capital ratios for the current quarter are preliminary pending completion of quarterly regulatory filings.}

Dollars in millions, except share and per share data
Income Statement (unaudited)		BancShares 2Q22		BancShares 1Q22		Combined ⁽¹⁾2Q21		BancShares YTD22		Combined ⁽¹⁾YTD21
INTEREST INCOME
Interest and fees on loans	$	655		621		680		1,276		1,367
Interest on investment securities		89		83		51		172		102
Interest on deposits at banks		13		6		2		19		6
Total interest income		757		710		733		1,467		1,475
INTEREST EXPENSE
Deposits		42		39		59		81		130
Borrowings		15		22		62		37		127
Total interest expense		57		61		121		118		257
Net interest income		700		649		612		1,349		1,218
Provision (benefit) for credit losses		42		464		(94	)	506		(224	)
Net interest income after provision for credit losses		658		185		706		843		1,442
NONINTEREST INCOME
Rental income on operating leases		213		208		188		421		383
Fee income and other service charges		39		35		39		74		73
Wealth management services		37		35		32		72		64
Service charges on deposit accounts		28		28		23		56		46
Factoring commissions		27		27		27		54		51
Cardholder services, net		26		25		23		51		43
Merchant services, net		9		10		9		19		18
Insurance commissions		11		12		10		23		19
Realized gain on sales of investment securities available for sale, net		—		—		19		—		133
Fair value adjustment on marketable equity securities, net		(6	)	3		12		(3	)	28
Bank-owned life insurance		9		8		9		17		18
Gain on sales of leasing equipment, net		5		6		29		11		57
Gain on acquisition		—		431		—		431		—
Gain on extinguishment of debt		—		6		—		6		—
Other noninterest income		26		16		63		42		112
Total noninterest income		424		850		483		1,274		1,045
NONINTEREST EXPENSE
Depreciation on operating lease equipment		89		81		83		170		168
Maintenance and other operating lease expenses		47		43		54		90		106
Salaries and benefits		341		352		330		693		670
Net occupancy expense		48		49		46		97		94
Equipment expense		54		52		51		106		104
Professional fees		15		16		19		31		30
Third-party processing fees		26		24		22		50		43
FDIC insurance expense		9		12		13		21		26
Marketing		9		8		8		17		13
Merger-related expenses		34		135		6		169		18
Intangible asset amortization		6		6		11		12		23
Other noninterest expense		67		32		48		99		104
Total noninterest expense		745		810		691		1,555		1,399
Income before income taxes		337		225		498		562		1,088
Income tax expense (benefit)		82		(46	)	118		36		258
Net income	$	255		271		380		526		830
Preferred stock dividends		17		7		17		24		24
Net income available to common stockholders	$	238		264		363		502		806


_{⁽¹⁾Combined financial information for the three and six month periods ending June 30, 2021 reflect historical BancShares and CIT information on a combined basis. Please see "Income Statement - Combined June 30, 2021" below for a reconciliation of these amounts to the most comparable GAAP amounts for such periods.}

Dollars in millions, except share and per share data
Notable Items ⁽¹⁾		BancShares 2Q22		BancShares 1Q22		Combined ⁽²⁾2Q21		BancShares YTD22		Combined ⁽²⁾YTD21
NONINTEREST INCOME
Rental income on operating leases, net ⁽²⁾	$	(136	)	(124	)	(137	)	(260	)	(274	)
Realized gain on sales of investment securities available for sale, net		—		—		(19	)	—		(133	)
Fair value adjustment on marketable equity securities, net		6		(3	)	(12	)	3		(28	)
Gain on sales of leasing equipment, net		(5	)	(6	)	(29	)	(11	)	(57	)
Gain on acquisition		—		(431	)	—		(431	)	—
Gain on extinguishment of debt		—		(6	)	—		(6	)	—
Gain on sales of legacy consumer mortgage loans		—		—		(33	)	—		(56	)
Gain on other loan and asset sales		(6	)	—		(8	)	(6	)	(8	)
Noninterest income - total adjustments	$	(141	)	(570	)	(238	)	(711	)	(555	)
NONINTEREST EXPENSE
Depreciation on operating lease equipment ⁽³⁾		(89	)	(81	)	(83	)	(170	)	(168	)
Maintenance and other operating lease equipment expense ⁽³⁾		(47	)	(43	)	(54	)	(90	)	(106	)
Merger-related expenses		(34	)	(135	)	(6	)	(169	)	(18	)
Intangible asset amortization		(6	)	(6	)	(11	)	(12	)	(23	)
Employee benefits-related expense ⁽⁴⁾		—		27		8		27		8
Other noninterest expense ⁽⁵⁾		(3	)	—		10		(3	)	5
Noninterest expense - total adjustments	$	(179	)	(238	)	(136	)	(417	)	(302	)
CECL Day 2 provision and reserve for unfunded commitments		—		(513	)	—		(513	)	—
Provision for credit losses - total adjustments	$	—		(513	)	—		(513	)	—
Impact of notable items on pre-tax income	$	38		181		(102	)	219		(253	)
Income tax impact		6		146		(24	)	152		(60	)
Impact of notable items on net income	$	32		35		(78	)	67		(193	)
Impact of notable items on basic and diluted EPS		2.00		2.25		N/A		4.19		N/A

_{⁽¹⁾ The notable items above reconcile the GAAP items (with the exception of quarter-to-date and year-to-date periods ending June 30, 2021 which reflect the historical results of BancShares and CIT on a combined basis) to the non-GAAP items.}
_{⁽²⁾Combined financial information for the three and six month periods ending June 30, 2021 reflect historical BancShares and CIT information on a combined basis. The combined financial information is non-GAAP.}
_{⁽³⁾ Rental income on operating leases is net of depreciation and maintenance expense.}
_{⁽⁴⁾ A portion of the adjustment for employee benefits-related expenses is included in salaries and benefits and the remainder is included in other noninterest expense.}
_{⁽⁵⁾In 2021, other expense includes a reserve release related to the prior sale of certain mortgage loans and the establishment of a litigation reserve.}

Dollars in millions, except share and per share data
Condensed Income Statement (unaudited) - Adjusted for Notable Items ⁽¹⁾		BancShares 2Q22	BancShares 1Q22		Combined ⁽²⁾2Q21		BancShares YTD22		Combined ⁽²⁾YTD21
Interest income	$	757	710		733		1,467		1,475
Interest expense		57	61		121		118		257
Net interest income		700	649		612		1,349		1,218
Provision (benefit) for credit losses		42	(49	)	(94	)	(7	)	(224	)
Net interest income after provision for credit losses		658	698		706		1,356		1,442
Noninterest income		283	280		246		563		491
Noninterest expense		566	572		555		1,138		1,097
Income before income taxes		375	406		397		781		836
Income tax expense		88	100		94		188		198
Net income	$	287	306		303		593		638
Preferred stock dividends		17	7		17		24		24
Net income available to common stockholders	$	270	299		286		569		614

Basic earnings per common share ⁽³⁾	$	16.87	18.95		13.63		35.71		26.99
Diluted earnings per common share ⁽³⁾	$	16.86	18.95		13.63		35.67		26.99
Weighted average common shares outstanding (basic) ⁽³⁾		16,023,613	15,779,153		9,816,405		15,918,978		9,816,405
Weighted average common shares outstanding (diluted) ⁽³⁾		16,035,090	15,779,153		9,816,405		15,937,826		9,816,405

_{⁽¹⁾ The GAAP income statements are included previously in these materials. The adjusted income statements above reflect non-GAAP items (including core adjusted noninterest income and expense) as the impacts of the notable items are excluded. The notable items included previously in this release reconcile the GAAP items (with the exception of quarter-to-date and year-to-date periods ending June 30, 2021 which reflect the historical results of BancShares and CIT on a combined basis) to the non-GAAP items.}
_{⁽²⁾Combined financial information for the three and six month periods ending June 30, 2021 reflect historical BancShares and CIT information on a combined basis. The combined financial information is non-GAAP. Please see "Income Statement - Combined June 30, 2021" below for a reconciliation of these amounts to the most comparable GAAP amounts for such periods.}
_{⁽³⁾ Per share and share data for the three and six month periods ending June 30, 2021 reflect historical BancShares financial information, which excludes CIT.}

Dollars in millions
Balance Sheet (unaudited)		BancShares 2Q22		BancShares 1Q22		Combined ⁽¹⁾2Q21
ASSETS
Cash and due from banks	$	583		523		542
Interest-earning deposits at banks		6,476		9,285		13,006
Securities purchased under agreements to resell		—		—		150
Investment in marketable equity securities		94		100		119
Investment securities available for sale		9,210		9,295		12,463
Investment securities held to maturity		9,832		10,074		3,397
Assets held for sale		38		83		159
Loans and leases		67,735		65,524		66,401
Allowance for credit losses		(850	)	(848	)	(1,040	)
Loans and leases, net of allowance for credit losses		66,885		64,676		65,361
Operating lease equipment, net		7,971		7,972		7,782
Premises and equipment, net		1,415		1,431		1,423
Bank-owned life insurance		1,334		1,326		1,301
Goodwill		346		346		350
Other intangible assets		150		156		143
Other assets		3,339		3,330		3,683
Total assets	$	107,673		108,597		109,879

LIABILITIES
Deposits
Noninterest-bearing	$	26,645		25,898		24,505
Interest-bearing		62,684		65,699		65,191
Total deposits		89,329		91,597		89,696
Credit balances of factoring clients		1,070		1,150		1,531
Securities sold under customer repurchase agreements		646		616		693
Federal Home Loan Bank borrowings		1,785		639		647
Senior unsecured borrowings		892		895		3,739
Subordinated debt		1,055		1,058		992
Other borrowings		81		84		91
Other liabilities		2,173		1,988		1,977
Total liabilities	$	97,031		98,027		99,366

STOCKHOLDERS' EQUITY
Preferred stock		881		881		865
Common Stock:						2
Class A		15		15		9
Class B		1		1		1
Additional paid in capital		5,345		5,344		3,751
Retained earnings		4,865		4,634		6,023
Accumulated other comprehensive (loss)		(465	)	(305	)	(138	)
Total stockholders' equity		10,642		10,570		10,513
Total liabilities and stockholders' equity	$	107,673		108,597		109,879

_{⁽¹⁾Combined financial information as of June 30, 2021 reflect historical BancShares and CIT information on a combined basis. The combined financial information is non-GAAP. Please see "Balance Sheet - Combined as of June 30, 2021" below for a reconciliation of these amounts to the most comparable GAAP amounts.}

Dollars in millions
Loans & Leases by Class (end of period)		BancShares 2Q22		BancShares 1Q22	Combined 2Q21
Loans & Leases by Class
Commercial
Commercial construction	$	2,783		2,633		2,649
Owner-occupied commercial mortgages		13,795		13,553		13,121
Non-owner-occupied commercial mortgages		9,167		9,293		9,948
Commercial and industrial		23,554		22,402		22,752
Leases		2,178		2,220		2,424
Total commercial	$	51,477		50,101		50,894

Consumer
Residential mortgage	$	12,441		11,711		11,635
Revolving mortgage		1,893		1,840		1,981
Consumer auto		1,338		1,320		1,288
Consumer other		586		552		604
Total consumer	$	16,258		15,423		15,507
Total loans and leases	$	67,735		65,524		66,401
Less: Allowance for credit losses		(850	)	848		(1,040	)
Total loans and leases, net of allowance for credit losses	$	66,885		64,676		65,361



Deposits by Type (end of period)		BancShares 2Q22		BancShares 1Q22	Combined 2Q21
Demand	$	26,645		25,898	$	24,505
Checking with interest		16,285		16,702		14,733
Money market		24,699		26,249		25,239
Savings		13,319		13,506		14,334
Time		8,381		9,242		10,885
Total deposits	$	89,329		91,597	$	89,696

Dollars in millions
Credit Quality & Allowance		BancShares 2Q22		BancShares 1Q22		Combined 2Q21		BancShares YTD22		Combined YTD21
Nonaccrual loans	$	513		538		736		513		736
Ratio of nonaccrual loans to total loans		0.76	%	0.82	%	1.11	%	0.76	%	1.11	%

Charge-offs	$	(41	)	(33	)	(55	)	(74	)	(92	)
Recoveries		19		18		29		37		52
Net charge-offs	$	(22	)	(15	)	(26	)	(37	)	(40	)
Net charge-off ratio		0.13	%	0.09	%	0.16	%	0.11	%	0.12	%

Allowance for credit losses to loans ratio		1.26	%	1.29	%	1.57	%	1.26	%	1.57	%

Allowance for credit losses - beginning	$	848		178		1,153		178		1,288
Initial PCD allowance		(12	)	284		—		272		—
Initial Non-PCD allowance		—		454		—		454		—
Provision (benefit) for credit losses		36		(53	)	(87	)	(17	)	(208	)
Net charge-offs		(22	)	(15	)	(26	)	(37	)	(40	)
Allowance for credit losses - ending	$	850		848		1,040		850		1,040

Dollars in millions
Average Balance Sheet	BancShares 2Q22						BancShares 1Q22						Combined 2Q21
	Avg Balance		Income/ Expense		Yield/ Rate		Avg Balance		Income/ Expense		Yield/ Rate		Avg Balance		Income/ Expense		Yield/ Rate
Loans and leases	$	65,298	$	655	4.01	%	$	64,144	$	621	3.88	%	$	66,393	$	680	4.08	%
Investment securities		19,185		89	1.85	%		19,492		83	1.71	%		15,471		51	1.28	%
Interest-earning deposits at banks		7,630		13	0.72	%		11,476		6	0.19	%		13,402		2	0.11	%
Total interest-earning assets	$	92,113	$	757	3.28	%	$	95,112	$	710	2.99	%	$	95,266	$	733	3.07	%

Interest-bearing deposits	$	64,070	$	42	0.26	%	$	66,258	$	39	0.24	%	$	65,287	$	59	0.37	%
Securities sold under customer repurchase agreements		627		—	0.16	%		600		—	0.16	%		677		1	0.21	%
Borrowings		2,419		15	2.43	%		4,506		22	1.95	%		6,060		61	4.03	%
Total interest-bearing liabilities	$	67,116	$	57	0.34	%	$	71,364	$	61	0.35	%	$	72,024	$	121	0.67	%

Net interest income			$	700					$	649					$	612
Net interest spread					2.94	%					2.64	%					2.39	%
Net interest margin					3.04	%					2.73	%					2.56	%

Average Balance Sheet	BancShares YTD22						Combined YTD21
	Avg Balance		Income/ Expense		Yield/ Rate		Avg Balance		Income/ Expense		Yield/ Rate
Loans and leases	$	64,724	$	1,276	3.96	%	$	67,032	$	1,367	4.09	%
Investment securities		19,338		172	1.78	%		15,554		102	1.30	%
Interest-earning deposits at banks		9,542		19	0.40	%		11,962		6	0.11	%
Total interest-earning assets	$	93,604	$	1,467	3.14	%	$	94,548	$	1,475	3.12	%

Interest-bearing deposits	$	65,158	$	81	0.25	%	$	65,305	$	130	0.40	%
Securities sold under customer repurchase agreements		614		—	0.16	%		659		1	0.21	%
Borrowings		3,457		37	2.12	%		6,373		126	3.94	%
Total interest-bearing liabilities	$	69,229	$	118	0.34	%	$	72,337	$	257	0.71	%

Net interest income			$	1,349					$	1,218
Net interest spread					2.80	%					2.41	%
Net interest margin					2.89	%					2.58	%

Dollars in millions, except per share data
Non-GAAP Reconciliations		BancShares 2Q22		BancShares 1Q22		Combined ⁽²⁾2Q21		BancShares YTD22		Combined ⁽²⁾YTD21

Reconciliations from GAAP to Adjusted ⁽¹⁾
Net income available to common stockholders (GAAP)	$	238		264		363		502		806
Tax-effected notable items		32		35		(77	)	67		(192	)
Adjusted net income available to common stockholders (non-GAAP)	$	270		299		286		569		614

Basic EPS (GAAP) ⁽²⁾	$	14.87		16.70		15.09		31.52		29.63
Tax-effected notable items		2.00		2.25		(1.46	)	4.19		(2.64	)
Basic EPS- adjusted (non-GAAP) ⁽²⁾		16.87		18.95		13.63		35.71		26.99

Diluted EPS (GAAP) ⁽²⁾	$	14.86		16.70		15.09		31.48		29.63
Tax-effected notable items		2.00		2.25		(1.46	)	4.19		(2.64	)
Diluted EPS- adjusted (non-GAAP) ⁽²⁾		16.86		18.95		13.63		35.67		26.99

ROA (GAAP)		0.95	%	1.00	%	1.13	%	0.97	%	1.14	%
Tax-effected notable items		0.12	%	0.12	%	(0.11	)%	0.13	%	(0.10	)%
ROA- adjusted (non-GAAP)		1.07	%	1.12	%	1.02	%	1.10	%	1.04	%

ROE (GAAP) ^{(2) (3)}		9.87	%	11.18	%	14.64	%	10.51	%	14.67	%
Tax-effected notable items		1.32	%	1.49	%	(1.41	)%	1.40	%	(1.30	)%
ROE- adjusted (non-GAAP) ^{(2) (3)}		11.19	%	12.67	%	13.23	%	11.91	%	13.37	%

ROTCE ⁽^{2) (3)}		10.40	%	11.83	%	16.14	%	11.11	%	16.21	%
Tax-effected notable items		1.40	%	1.58	%	(1.56	)%	1.47	%	(1.45	)%
ROTCE- adjusted (non-GAAP measure) ^{(2) (3)}		11.80	%	13.41	%	14.58	%	12.58	%	14.76	%

Provision (benefit) for credit losses	$	42		464		(94	)	506		(224	)
Day 2 provision related to CIT Merger		—		(513	)	—		(513	)	—
Provision (benefit) for credit losses- adjusted	$	42		(49	)	(94	)	(7	)	(224	)


_{⁽¹⁾ The GAAP income statements, adjusted condensed income statements (which reflect non-GAAP results including adjusted noninterest income and expense), and the individual notable items, which reconcile GAAP (with the exception of quarter-to-date and year-to-date periods ending June 30, 2021, which reflect the historical results of BancShares and CIT on a combined basis) to non-GAAP items are included previously in this release. The notable items in the table above represent the aggregate impacts of all of the notable items.}
_{⁽²⁾ Basic and diluted EPS, ROE, and ROTCE for the quarter-to-date and year-to-date periods ending June 30, 2021 are based on historical FCB financial information, which excludes CIT. All other information for such periods is based on the combined balance sheets and historical results of BancShares and CIT. See "Balance Sheet - Combined as of June 30, 2021" and "Income Statement - Combined June 30, 2021" below for more information.}
_{⁽³⁾ ROE and ROTCE are calculated based on common equity, which excludes preferred stock.}

Dollars in millions, except per share data
Non-GAAP Reconciliations		BancShares 2Q22		BancShares 1Q22		Combined ⁽¹⁾2Q21		BancShares YTD22		Combined ⁽¹⁾YTD21

Pre-tax, pre-provision net revenue
Net income (GAAP)	$	255		271		380		526		830
Provision (benefit) for credit losses		42		464		(94	)	506		(224	)
Income tax expense (benefit)		82		(46	)	118		36		258
Pre-tax, pre-provision net revenue (PPNR) (non-GAAP)	$	379		689		404		1,068		864

ROTCE
ROE ⁽¹⁾ (GAAP)		9.87	%	11.18	%	14.64	%	10.51	%	14.67	%
Exclusion of goodwill and other intangible assets		0.53	%	0.65	%	1.50	%	0.60	%	1.54	%
ROTCE ⁽¹⁾ (non-GAAP)		10.40	%	11.83	%	16.14	%	11.11	%	16.21	%

TBV per common share
Book value per common share ⁽¹⁾ (GAAP)	$	609.95		605.48		421.39		609.95		421.39
Exclusion of goodwill and other intangible assets		(31.03	)	(31.39	)	(38.20	)	(31.03	)	(38.20	)
TBV per common share ⁽¹⁾ (non-GAAP)	$	578.92		574.09		383.19		578.92		383.19

Efficiency Ratio
Net interest income (GAAP)	$	700		649		612		1,349		1,218
Adjusted noninterest income (non-GAAP)		283		280		246		563		491
Total efficiency revenue	$	983		929		858		1,912		1,709
Adjusted noninterest expense (non-GAAP)	$	566		572		555		1,138		1,097
Efficiency ratio (non-GAAP)		57.55	%	61.57	%	64.73	%	59.50	%	64.17	%

Average Interest-earning Assets and Net Interest Margin
Average interest-earning assets (GAAP)	$	92,113		95,112		95,266		93,604		94,548
Less: credit balances for factoring clients		1,189		1,160		1,586		1,175		1,607
Adjusted average interest earning assets (non-GAAP)	$	90,924		93,952		93,680		92,429		92,941
Net interest margin (non-GAAP)		3.04	%	2.73	%	2.56	%	2.89	%	2.58	%


_{⁽¹⁾ ROE, ROTCE, book value per common share, and TBV per common share are calculated based on common equity, which excludes preferred stock. ROE, ROTCE, book value per common share, and TBV per common share for the quarter-to-date and year-to-date periods ending June 30, 2021 are based on historical FCB financial information which excludes CIT. All other information for such periods is based on the combined balance sheets and historical results of BancShares and CIT. See "Balance Sheet - Combined as of June 30, 2021" and "Income Statement - Combined June 30, 2021" below for more information.}

Dollars in millions, except share and per share data
Income Statement- Combined June 30, 2021		BancShares QTD		CIT QTD		Combined QTD ⁽¹⁾		BancShares YTD		CIT YTD		Combined YTD ⁽¹⁾
INTEREST INCOME
Interest and fees on loans	$	324		356		680		647		720		1,367
Interest on investment securities		36		15		51		66		36		102
Interest on deposits at banks		2		—		2		4		2		6
Total interest income		362		371		733		717		758		1,475
INTEREST EXPENSE
Deposits		8		51		59		17		113		130
Borrowings		8		54		62		14		113		127
Total interest expense		16		105		121		31		226		257
Net interest income		346		266		612		686		532		1,218
Provision (benefit) for credit losses		(20	)	(74	)	(94	)	(31	)	(193	)	(224	)
Net interest income after provision for credit losses		366		340		706		717		725		1,442
NONINTEREST INCOME
Rental income on operating leases		—		188		188		—		383		383
Fee income and other service charges		10		29		39		21		52		73
Wealth management services		32		—		32		64		—		64
Service charges on deposit accounts		21		2		23		43		3		46
Factoring commissions		—