First Citizens Bancshares, Inc (NC) - 5.375% PRF PERPETUAL USD 25 - Ser A(1/40th Dep Sh)

Earnings & profitability improved (good): - Net income: $83.9M / $0.87 diluted EPS in 2Q26, up from $60.2M / $0.61 in 1Q26. - Net interest margin (NIM): 3.48% in 2Q26 vs 3.43% in 1Q26 and 3.32% in 2Q25 — 9th consecutive quarter of NIM expansion. - Loan yield: 5.62%, up +2 bps QoQ. Deposit costs improved -3 bps QoQ (and funding costs -4 bps QoQ). - Management emphasized continued fixed-asset repricing and declining funding costs as the core drivers.

Loan growth was weaker than hoped due to proactive payoffs (bad/surprising): - Loans held for investment: down $447M in the quarter, primarily due to accelerated payoffs (especially criticized / non-relationship credits, plus secondary market activity and divested markets). - Despite higher commercial loan production (notably Rocky Mountain region strength), reported balances fell more than expected because payoff timing “pulled forward” some expected future runoff. - Management explicitly said payoff pressure is expected to continue through the rest of 2026, creating variability in near-term loan balance growth even while relationship growth is improving.

Deposit dynamics: improved mix and noninterest-bearing growth, but deposits still declined (mixed): - Total deposits: down $441.7M to $21.4B at 6/30/26, with more than half of the impact from a Nebraska branch deposit sale (~$244M). - Noninterest-bearing balances: returned to growth in the quarter and also year-over-year (adjusted for sold deposits). - They allowed some higher-cost time deposits to exit, improving the deposit cost trend but pressuring near-term balances. - Loan-to-deposit ratio: 66.6% at quarter-end (vs 67.3% prior quarter; vs 72.3% a year ago) — showing the structural balance sheet shift, despite the absolute deposit decline.