First Citizens Bancshares, Inc (NC) - 5.625% PRF PERPETUAL USD 25 - 25 Ser C

Earnings strength & margin momentum (good): - Net income: $83.9m / $0.87 EPS in 2Q26, up from $60.2m / $0.61 EPS in 1Q26. - Net interest income: +$1.5m (+0.7%) to $202.2m, driven by an improving net interest margin (NIM) and an extra accrual day; partially offset by reduced earning assets from a branch sale (April). - NIM trend: 3.48% (2Q26) vs 3.43% (1Q26) and 3.32% (2Q25) — 9th consecutive quarter of NIM expansion. - Rates/cost drivers: Loan yield 5.62% (+2 bps QoQ), deposit costs down 3 bps QoQ (funding cost down 4 bps QoQ). Investment yields rose (per management: 2.72% → 2.98% in the period referenced).

Loan growth “miss” explained by payoffs & balance-sheet runoff (bad/surprising): - Loans: down $447m in the quarter (more than expected) due to accelerated payoffs, concentrated in credits with limited relationship value, including criticized loan payoffs, secondary market activity, and out-of-market/divested market credits. - Management expects payoff pressure to continue through 2H26 (pullying forward some expected outer-year runoff). - They gave a useful “ring-fence” framing: - Out-of-market portfolio ~mid-$600m. - Payoffs from that bucket ~$100m in the quarter (and management expects further pull-forward; out-of-market payoffs described as mid-teens per quarter pace). - Indirect/residential & ag declines make up meaningful portion of the total decline; commercial core decline is smaller after excluding those categories.

Deposit trends: core relationship improvement, but near-term balances pressured (mixed/good + challenge): - Total deposits: down $441.7m to $21.4b at 6/30/26 — over half from the sale of $244m of deposits tied to the Nebraska branch transaction. - Average deposits: down $212.3m; management cites end-of-period outflows from large deposit movements. - Cost discipline & mix: they allowed higher-cost time deposits to exit, and deposit mix improved; noninterest-bearing balances grew YoY once adjusted for sold deposits. - Guidance implication: they see customer acquisition improvement but continued pressure in higher-cost deposit categories, plus mortgage production trailing expectations.