First Citizens BancShares Reports Third Quarter 2022 Earnings

RALEIGH, N.C., Oct. 27, 2022 (GLOBE NEWSWIRE) -- First Citizens BancShares, Inc. (“BancShares”) (Nasdaq: FCNCA) reported earnings for the third quarter and year-to-date period ended September 30, 2022.

Chairman and CEO Frank B. Holding, Jr. on third quarter results, "We are pleased with our financial performance during the third quarter and reported net income of $315 million, a 23.5% increase over the prior quarter. We remain focused on merger optimization efforts and achieving our cost savings target. In July, we announced a share repurchase plan that authorized repurchases of up to 1.5 million shares of our Class A common stock. I am pleased to report that as of October 25, 2022, we have repurchased 98.5% of the 1.5 million shares authorized under that share repurchase plan.

"Contributing to higher net income during the quarter was solid top line growth led by continued momentum in loans, net interest margin expansion and solid performance in our fee income producing lines of business. Core revenues outpaced expense growth contributing to a 23.5% increase in sequential quarter pre-provision net revenue. We are pleased that credit quality remained strong as the net charge-off and nonperforming loan ratios both declined during the quarter.”

FINANCIAL HIGHLIGHTS

For the third quarter, net income available to common stockholders was $303 million, or $19.25 per common share, compared to $238 million, or $14.86 per common share in the second quarter of 2022. Third quarter adjusted net income available to common stockholders was $326 million, or $20.77 per common share, up from $270 million, or $16.86 per common share in the second quarter. The following bullets highlight significant changes in the components of net income and adjusted net income between the second and third quarters:

• Pre-provision net revenue totaled $468 million compared to $379 million in the second quarter. Adjusted pre-provision net revenue totaled $506 million, an increase of $89 million or 21.3% compared to the second quarter due to core net revenue growth exceeding core noninterest expense growth.
• Net revenue growth was led by a $95 million, or a 13.6% increase in net interest income over the second quarter primarily due to loan growth and higher yields on loans and overnight investments, partially offset by higher funding costs.
• Net interest margin was 3.40%, an increase of 36 basis points over the second quarter, as the rising interest rate environment increased yields on our earning assets and BancShares had another quarter of strong loan growth, only partially offset by higher rates paid on interest-bearing deposits and higher borrowings.
• Noninterest income totaled $433 million compared to $424 million in the second quarter. Adjusted noninterest income totaled $288 million compared to $283 million in the second quarter, an increase of $5 million. The increase was primarily due to higher capital markets fees, rental income on operating leases, net and other operating income, partially offset by lower service charges on deposit accounts.
• Noninterest expense totaled $760 million compared to $745 million in the second quarter. Adjusted noninterest expense totaled $577 million compared to $566 million in the second quarter, an increase of $11 million. The increase was driven primarily by higher personnel costs and higher marketing expenses in the Direct Bank, partially offset by lower FDIC insurance expense and professional fees.
• Provision for credit losses totaled $60 million compared to $42 million in the second quarter, an increase of $18 million. The increase was primarily due to deterioration in CECL macroeconomic forecasts and loan growth, partially offset by improved credit quality and portfolio mix. Net charge-offs totaled $18 million or a ratio of 0.10% of average loans compared to $22 million or a ratio of 0.13% of average loans during the second quarter.
• Loans totaled $69.8 billion, an increase of $2.1 billion, or 12.0% on an annualized basis due to strong growth in our branch network and Mortgage as well as in our commercial bank from areas such as Commercial Finance and Business Capital.
• Deposits totaled $87.6 billion, a decrease of $1.8 billion, or 7.9% on an annualized basis. The main component of the decline was a $1.8 billion reduction in interest-bearing deposits as we saw our more sensitive customers move funds in response to continued rate increases. The reductions were primarily concentrated in acquired branches and commercial banking, partially offset by growth in our Direct Bank.
• Borrowings increased $3.9 billion during the quarter to support loan growth and offset declines in interest-bearing deposits.
  

EARNINGS CALL DETAILS
BancShares will host a conference call to discuss the company's financial results on Thursday, October 27, 2022, at 8:30 a.m. Eastern time.

To access this call, dial:

United States: 1-833-927-1758
Canada: 1-833-950-0062
All other locations: 1-929-526-1599

Access code: 355751

The third 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 November 17, 2022, by dialing 1-866-813-9403 (United States), 1-226-828-7578 (Canada) or +44 204-525-0658 (all other locations) using the access code 319469.

ABOUT FIRST CITIZENS BANCSHARES
First Citizens BancShares, Inc. is the financial holding company for First-Citizens Bank & Trust Company (“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 more than $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, including the significant turbulence in the capital or financial markets, 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”).

NON-GAAP MEASURES
Certain measures in this release and supporting tables, including those referenced as “Adjusted” 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) and notable items are summarized in a separate table.

Dollars in millions, except per share data
		BancShares		BancShares		BancShares		BancShares		BancShares
		QTD		QTD		QTD		YTD		YTD
Summary Financial Data & Key Metrics		9/30/22		6/30/22		9/30/21		9/30/22		9/30/21
Results of Operations:
Net interest income	$	795		700		347		2,144		1,033
Provision (benefit) for credit losses		60		42		(1	)	566		(32	)
Net interest income after provision for credit losses		735		658		348		1,578		1,065
Noninterest income		433		424		124		1,707		394
Noninterest expense		760		745		314		2,315		911
Income before income taxes		408		337		158		970		548
Income tax expense		93		82		34		129		124
Net income		315		255		124		841		424
Preferred stock dividends		12		17		5		36		14
Net income available to common stockholders		303		238		119		805		410
Adjusted net income available to common stockholders(1)		326		270		118		895		383
Pre-tax, pre-provision net revenue (PPNR)(1)		468		379		157		1,536		516
Per Share Information:
Diluted earnings per common share (EPS)	$	19.25		14.86		12.17		50.70		41.79
Adjusted diluted earnings per common share (EPS)(1)		20.77		16.86		12.04		56.41		39.03
Book value per common share		597.75		609.95		432.07		597.75		432.07
Tangible book value per common share (TBV)(1)		564.97		578.92		394.15		564.97		394.15
Key Performance Metrics:
Return on average assets (ROA)		1.16	%	0.95	%	0.88	%	1.03	%	1.05	%
Adjusted ROA(1)		1.24		1.07		0.87		1.15		0.98
PPNR ROA(1)		1.72		1.41		1.11		1.89		1.28
Adjusted PPNR ROA(1)		1.86		1.56		1.10		1.58		1.19
Return on average common equity (ROE)		12.49		9.87		11.29		11.18		13.50
Adjusted ROE(1)		13.47		11.19		11.18		12.44		12.61
Return on average tangible common equity (ROTCE)(1)		13.17		10.40		12.39		11.80		14.88
Adjusted ROTCE(1)		14.20		11.80		12.27		13.13		13.89
Efficiency ratio(1)		53.32		57.55		66.09		57.25		64.69
Net interest margin (NIM)(2)		3.40		3.04		2.61		3.06		2.69
Select Balance Sheet Items at Period End:
Total investment securities	$	18,841		19,136		10,875		18,841		10,875
Total loans and leases		69,790		67,735		32,516		69,790		32,516
Total operating lease equipment, net		7,984		7,971		—		7,984		—
Total deposits		87,553		89,329		50,065		87,553		50,065
Total borrowings		8,343		4,459		1,883		8,343		1,883
Loan to deposit ratio		79.71	%	75.83	%	64.95	%	79.71	%	64.95	%
Noninterest-bearing deposits to total deposits		30.37	%	29.75	%	42.97	%	30.37	%	42.97	%
Capital Ratios at Period End: (3)
Total risk-based capital ratio		13.46	%	14.46	%	14.30	%	13.46	%	14.30	%
Tier 1 risk-based capital ratio		11.36		12.37		12.32		11.36		12.32
Common equity Tier 1 ratio		10.37		11.34		11.34		10.37		11.34
Tier 1 leverage capital ratio		9.31		9.85		7.68		9.31		7.68
Asset Quality at Period End:
Nonaccrual loans to total loans and leases		0.65	%	0.76	%	0.50	%	0.65	%	0.50	%
Allowance for credit losses (ACL) to loans and leases		1.26		1.26		0.56		1.26		0.56
Net charge-off ratio		0.10		0.13		0.06		0.11		0.04
(1) Denotes a non-GAAP measure. Refer to the non-GAAP reconciliation subsequently included in these materials for a reconciliation to the most directly comparable GAAP measure. “Adjusted” items exclude the impact of Notable Items.
(2) Calculated net of average credit balances of factoring clients.
(3) Capital ratios for the current quarter are preliminary pending completion of quarterly regulatory filings.

Dollars in millions, except share and per share data
		BancShares		BancShares		BancShares		BancShares		BancShares
		QTD		QTD		QTD		YTD		YTD
Income Statement (unaudited)		9/30/22		6/30/22		9/30/21		9/30/22		9/30/21
Interest income
Interest and fees on loans	$	785		655		320		2,061		967
Interest on investment securities		90		89		40		262		106
Interest on deposits at banks		31		13		3		50		7
Total interest income		906		757		363		2,373		1,080
Interest expense
Deposits		78		42		8		159		25
Borrowings		33		15		8		70		22
Total interest expense		111		57		16		229		47
Net interest income		795		700		347		2,144		1,033
Provision (benefit) for credit losses		60		42		(1	)	566		(32	)
Net interest income after provision for credit losses		735		658		348		1,578		1,065
Noninterest income
Rental income on operating leases		219		213		—		640		—
Fee income and other service charges		44		39		10		118		31
Wealth management services		35		37		32		107		96
Service charges on deposit accounts		21		28		26		77		69
Factoring commissions		24		27		—		78		—
Cardholder services, net		25		26		23		76		65
Merchant services, net		8		9		9		27		26
Insurance commissions		11		11		4		34		12
Realized gain on sale of investment securities available for sale, net		—		—		8		—		33
Fair value adjustment on marketable equity securities, net		(2	)	(6	)	3		(5	)	31
Bank-owned life insurance		8		9		1		25		2
Gain on sale of leasing equipment, net		2		5		—		13		—
Gain on acquisition		—		—		—		431		—
Gain on extinguishment of debt		1		—		—		7		—
Other noninterest income		37		26		8		79		29
Total noninterest income		433		424		124		1,707		394
Noninterest expense
Depreciation on operating lease equipment		87		89		—		257		—
Maintenance and other operating lease expenses		52		47		—		142		—
Salaries and benefits		351		341		194		1,044		566
Net occupancy expense		47		48		29		144		87
Equipment expense		55		54		30		161		89
Professional fees		13		15		5		44		13
Third-party processing fees		27		26		16		77		44
FDIC insurance expense		5		9		3		26		10
Marketing		15		9		3		32		7
Merger-related expenses		33		34		7		202		20
Intangible asset amortization		5		6		3		17		9
Other noninterest expense		70		67		24		169		66
Total noninterest expense		760		745		314		2,315		911
Income before income taxes		408		337		158		970		548
Income tax expense		93		82		34		129		124
Net income	$	315		255		124		841		424
Preferred stock dividends		12		17		5		36		14
Net income available to common stockholders	$	303		238		119		805		410
Basic earnings per common share	$	19.27		14.87		12.17		50.76		41.79
Diluted earnings per common share	$	19.25		14.86		12.17		50.70		41.79
Weighted average common shares outstanding (basic)		15,711,976		16,023,613		9,816,405		15,851,385		9,816,405
Weighted average common shares outstanding (diluted)		15,727,993		16,035,090		9,816,405		15,870,233		9,816,405

Dollars in millions
		BancShares		BancShares		BancShares
Balance Sheet (unaudited)		9/30/22		6/30/22		9/30/21
Assets
Cash and due from banks	$	481		583		337
Interest-earning deposits at banks		6,172		6,476		9,875
Investments in marketable equity securities		92		94		123
Investment securities available for sale		9,088		9,210		7,371
Investment securities held to maturity		9,661		9,832		3,381
Assets held for sale		21		38		98
Loans and leases		69,790		67,735		32,516
Allowance for credit losses		(882	)	(850	)	(183	)
Loans and leases, net of allowance for credit losses		68,908		66,885		32,333
Operating lease equipment, net		7,984		7,971		—
Premises and equipment, net		1,410		1,415		1,231
Bank-owned life insurance		1,342		1,334		116
Goodwill		346		346		350
Other intangible assets		145		150		22
Other assets		3,660		3,339		1,665
Total assets	$	109,310		107,673		56,902
Liabilities
Deposits:
Noninterest-bearing	$	26,587		26,576		21,514
Interest-bearing		60,966		62,753		28,551
Total deposits		87,553		89,329		50,065
Credit balances of factoring clients		1,147		1,070		—
Borrowings:
Short-term borrowings		3,128		646		664
Long-term borrowings		5,215		3,813		1,219
Total borrowings		8,343		4,459		1,883
Other liabilities		2,434		2,173		372
Total liabilities	$	99,477		97,031		52,320
Stockholders’ equity
Preferred stock		881		881		340
Common stock:
Class A - $1 par value		14		15		9
Class B - $1 par value		1		1		1
Additional paid in capital		4,506		5,345		—
Retained earnings		5,160		4,865		4,264
Accumulated other comprehensive loss		(729	)	(465	)	(32	)
Total stockholders’ equity		9,833		10,642		4,582
Total liabilities and stockholders’ equity	$	109,310		107,673		56,902

Dollars in millions, except share per share data
		BancShares		BancShares		BancShares		BancShares		BancShares
		QTD		QTD		QTD		YTD		YTD
Notable Items (1)		9/30/22		6/30/22		9/30/21		9/30/22		9/30/21
Noninterest income
Rental income on operating leases, net(2)	$	(139	)	(136	)	—		(399	)	—
Realized gain on sale of investment securities available for sale, net		—		—		(8	)	—		(33	)
Fair value adjustment on marketable equity securities, net		2		6		(3	)	5		(31	)
Gain on sale of leasing equipment, net		(2	)	(5	)	—		(13	)	—
Gain on acquisition		—		—		—		(431	)	—
Gain on extinguishment of debt		(1	)	—		—		(7	)	—
Gain on other loan and asset sales		(5	)	(6	)	—		(11	)	—
Noninterest income - total adjustments	$	(145	)	(141	)	(11	)	(856	)	(64	)
Noninterest expense
Depreciation on operating lease equipment (2)		(87	)	(89	)	—		(257	)	—
Maintenance and other operating lease equipment expense (2)		(52	)	(47	)	—		(142	)	—
Merger-related expenses		(33	)	(34	)	(7	)	(202	)	(20	)
Intangible asset amortization		(5	)	(6	)	(3	)	(17	)	(9	)
Other noninterest expense		(6	)	(3	)	—		18		—
Noninterest expense - total adjustments	$	(183	)	(179	)	(10	)	(600	)	(29	)
Day 2 provision, including provision for unfunded commitments		—		—		—		(513	)	—
Provision for credit losses - total adjustments	$	—		—		—		(513	)	—
Impact of notable items on pre-tax income	$	38		38		(1	)	257		(35	)
Income tax impact (3)		15		6		—		167		(8	)
Impact of notable items on net income	$	23		32		(1	)	90		(27	)
Impact of notable items on basic and diluted EPS		1.52		2.00		(0.13	)	5.71		(2.76	)
(1) The notable items above reconcile the GAAP net income to adjusted net income, which is a non-GAAP measure.
(2) Rental income on operating leases is net of depreciation and maintenance expense.
(3) Includes the impact of tax discrete items and changes in the estimated annualized effective tax rate.

Dollars in millions, except share and per share data
Condensed Income Statement (unaudited) - Adjusted for Notable Items (1)		BancShares		BancShares		BancShares		BancShares		BancShares
		QTD		QTD		QTD		YTD		YTD
		9/30/22		6/30/22		9/30/21		9/30/22		9/30/21
Interest income	$	906		757		363		2,373		1,080
Interest expense		111		57		16		229		47
Net interest income		795		700		347		2,144		1,033
Provision (benefit) for credit losses		60		42		(1	)	53		(32	)
Net interest income after provision for credit losses		735		658		348		2,091		1,065
Noninterest income		288		283		113		851		330
Noninterest expense		577		566		304		1,715		882
Income before income taxes		446		375		157		1,227		513
Income tax expense		108		88		34		296		116
Net income	$	338		287		123		931		397
Preferred stock dividends		12		17		5		36		14
Net income available to common stockholders	$	326		270		118		895		383
Basic earnings per common share	$	20.79		16.87		12.04		56.47		39.03
Diluted earnings per common share	$	20.77		16.86		12.04		56.41		39.03
Weighted average common shares outstanding (basic)		15,711,976		16,023,613		9,816,405		15,851,385		9,816,405
Weighted average common shares outstanding (diluted)		15,727,993		16,035,090		9,816,405		15,870,233		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 net income to adjusted net income, which is a non-GAAP measure.

Dollars in millions
		BancShares		BancShares		BancShares
Loans & Leases by Class (end of period)		9/30/22		6/30/22		9/30/21
Loans & Leases by Class
Commercial
Commercial construction	$	2,752		2,783		1,370
Owner-occupied commercial mortgages		14,053		13,795		11,745
Non-owner-occupied commercial mortgages		9,683		9,167		3,077
Commercial and industrial		24,288		23,554		6,068
Leases		2,184		2,178		287
Total commercial	$	52,960		51,477		22,547
Consumer
Residential mortgage	$	12,910		12,441		6,122
Revolving mortgage		1,923		1,893		1,861
Consumer auto		1,385		1,338		1,350
Consumer other		612		586		636
Total consumer	$	16,830		16,258		9,969
Total loans and leases	$	69,790		67,735		32,516
Less: Allowance for credit losses		882		850		183
Total loans and leases, net of allowance for credit losses	$	68,908		66,885		32,333
		BancShares		BancShares		BancShares
Deposits by Type (end of period)		9/30/22		6/30/22		9/30/21
Demand	$	26,587		26,645		21,514
Checking with interest		16,118		16,285		11,769
Money market		21,818		24,699		10,146
Savings		14,722		13,319		4,063
Time		8,308		8,381		2,573
Total deposits	$	87,553		89,329		50,065

Dollars in millions
		BancShares		BancShares		BancShares		BancShares		BancShares
		QTD		QTD		QTD		YTD		YTD
Credit Quality & Allowance		9/30/22		6/30/22		9/30/21		9/30/22		9/30/21
Nonaccrual loans	$	454		513		164		454		164
Ratio of nonaccrual loans to total loans		0.65	%	0.76	%	0.50	%	0.65	%	0.50	%
Charge-offs	$	(33	)	(41	)	(11	)	(107	)	(27	)
Recoveries		15		19		6		52		17
Net charge-offs	$	(18	)	(22	)	(5	)	(55	)	(10	)
Net charge-off ratio		0.10	%	0.13	%	0.06	%	0.11	%	0.04	%
Allowance for credit losses to loans ratio		1.26	%	1.26	%	0.56	%	1.26	%	0.56	%
Allowance for credit losses - beginning	$	850		848		189		178		225
Initial PCD ACL		—		(12	)	—		272		—
Day 2 provision, excluding provision for unfunded commitments		—		—		—		454		—
Provision (benefit) for credit losses		50		36		(1	)	33		(32	)
Net charge-offs		(18	)	(22	)	(5	)	(55	)	(10	)
Allowance for credit losses - ending	$	882		850		183		882		183

Dollars in millions
Average Balance Sheet	BancShares QTD 9/30/22							BancShares QTD 6/30/22							BancShares QTD 9/30/21
	Avg Balance			Income/ Expense		Yield/ Rate		Avg Balance			Income/ Expense		Yield/ Rate		Avg Balance			Income/ Expense		Yield/ Rate
Loans and leases (1) (2)	$	67,733		$	785	4.58	%	$	65,298		$	655	4.01	%	$	32,708		$	320	3.85	%
Total investment securities		19,119			90	1.88			19,185			89	1.85			10,708			40	1.47
Interest-earning deposits at banks		5,685			31	2.17			7,629			13	0.72			8,956			3	0.15
Total interest-earning assets (2)	$	92,537		$	906	3.87	%	$	92,112		$	757	3.28	%	$	52,372		$	363	2.73	%
Operating lease equipment, net (including held for sale)	$	7,981						$	7,973						$	—
Cash and due from banks		489							524							365
Allowance for credit losses		(851	)						(849	)						(190	)
All other non-interest-earning assets		7,831							7,815							3,377
Total assets	$	107,987						$	107,575						$	55,924
Interest-bearing deposits:
Checking with interest	$	16,160		$	7	0.17	%	$	16,503		$	4	0.12	%	$	11,324		$	1	0.05	%
Money market		22,993			32	0.55			25,468			18	0.28			9,866			2	0.09
Savings		13,956			28	0.78			13,303			11	0.34			3,979			1	0.03
Time deposits		8,436			11	0.54			8,796			9	0.38			2,599			4	0.61
Total interest-bearing deposits		61,545			78	0.50			64,070			42	0.26			27,768			8	0.12
Borrowings:
Securities sold under customer repurchase agreements		617			1	0.16			627			—	0.16			672			—	0.21
Short-term FHLB borrowings		1,188			8	2.57			—			—	—			—			—	—
Short-term borrowings		1,805			9	1.74			627			—	0.16			672			—	0.21
Federal Home Loan Bank borrowings		1,784			11	2.45			386			2	1.64			646			4	1.28
Senior unsecured borrowings		898			5	2.00			894			4	2.05			—			—	—
Subordinated debt		1,054			8	3.21			1,057			8	3.06			497			3	3.35
Other borrowings		67			—	4.51			83			1	2.46			79			1	1.24
Long-term borrowings		3,803			24	2.59			2,420			15	2.43			1,222			8	2.12
Total borrowings		5,608			33	2.32			3,047			15	1.96			1,894			8	1.44
Total interest-bearing liabilities	$	67,153		$	111	0.65	%	$	67,117		$	57	0.34	%	$	29,662		$	16	0.20	%
Noninterest-bearing deposits	$	26,877						$	26,551						$	21,339
Credit balances of factoring clients		1,089							1,189							—
Other noninterest-bearing liabilities		2,369							2,151							362
Stockholders' equity		10,499							10,567							4,561
Total liabilities and stockholders' equity	$	107,987						$	107,575						$	55,924
Net interest income				$	795						$	700						$	347
Net interest spread (2)						3.22	%						2.94	%						2.53	%
Net interest margin (2)						3.40	%						3.04	%						2.61	%
(1) Loans and leases include non-PCD and PCD loans, nonaccrual loans and held for sale. Interest income on loans and leases includes accretion income and loan fees.
(2) The balance and rate presented is calculated net of average credit balances of factoring clients.

Dollars in millions
Average Balance Sheet	BancShares YTD 9/30/22							BancShares YTD 9/30/21
	Avg Balance			Income/ Expense		Yield/ Rate		Avg Balance			Income/ Expense		Yield/ Rate
Loans and leases (1) (2)	$	65,739		$	2,061	4.17	%	$	32,985		$	967	3.89	%
Total investment securities		19,264			262	1.81			10,337			106	1.36
Interest-earning deposits at banks		8,242			50	0.81			7,560			7	0.12
Total interest-earning assets(2)	$	93,245		$	2,373	3.39	%	$	50,882		$	1,080	2.81	%
Operating lease equipment, net (including held for sale)	$	7,960						$	—
Cash and due from banks		517							354
Allowance for credit losses		(871	)						(208	)
All other non-interest-earning assets		7,792							2,899
Total assets	$	108,643						$	53,927
Interest-bearing deposits:
Checking with interest	$	16,437		$	16	0.14	%	$	11,010		$	4	0.05	%
Money market		24,875			65	0.35			9,489			7	0.11
Savings		13,640			48	0.47			3,748			1	0.03
Time deposits		9,004			30	0.45			2,692			13	0.63
Total interest-bearing deposits		63,956			159	0.33			26,939			25	0.13
Borrowings:
Securities sold under customer repurchase agreements		615			1	0.16			664			1	0.21
Short-term FHLB borrowings		400			8	2.57			—			—	—
Short-term borrowings		1,015			9	1.11			664			1	0.21
Federal Home Loan Bank borrowings		941			15	2.07			649			7	1.28
Senior unsecured borrowings		1,497			21	1.83			—			—	—
Subordinated debt		1,057			24	3.07			497			10	3.36
Other borrowings		79			1	2.86			83			4	1.22
Long-term borrowings		3,574			61	2.29			1,229			21	2.12
Total borrowings		4,589			70	2.03			1,893			22	1.45
Total interest-bearing liabilities	$	68,545		$	229	0.45	%	$	28,832		$	47	0.21	%
Noninterest-bearing deposits	$	26,253						$	20,316
Credit balances of factoring clients		1,146							—
Other noninterest-bearing liabilities		2,202							352
Stockholders' equity		10,497							4,427
Total liabilities and stockholders' equity	$	108,643						$	53,927
Net interest income				$	2,144						$	1,033
Net interest spread (2)						2.94	%						2.60	%
Net interest margin (2)						3.06	%						2.69	%
(1) Loans and leases include non-PCD and PCD loans, nonaccrual loans and held for sale. Interest income on loans and leases includes accretion income and loan fees.
(2) The balance and rate presented is calculated net of average credit balances of factoring clients.

Dollars in millions, except share and per share data
				BancShares		BancShares		BancShares		BancShares		BancShares
				QTD		QTD		QTD		YTD		YTD
Non-GAAP Reconciliations				9/30/22		6/30/22		9/30/21		9/30/22		9/30/21
Net income and EPS
Net income (GAAP)		a	$	315		255		124		841		424
Preferred stock dividends				12		17		5		36		14
Net income available to common stockholders (GAAP)		b		303		238		119		805		410
Total notable items, after income tax		c		23		32		(1	)	90		(27	)
Adjusted net income (non-GAAP)		d = (a+c)		338		287		123		931		397
Adjusted net income available to common stockholders (non-GAAP)		e = (b+c)	$	326		270		118		895		383
Weighted average common shares outstanding
Basic		f		15,711,976		16,023,613		9,816,405		15,851,385		9,816,405
Diluted		g		15,727,993		16,035,090		9,816,405		15,870,233		9,816,405
EPS (GAAP)
Basic		b/f	$	19.27		14.87		12.17		50.76		41.79
Diluted		b/g		19.25		14.86		12.17		50.70		41.79
Adjusted EPS (non-GAAP)
Basic		e/f	$	20.79		16.87		12.04		56.47		39.03
Diluted		e/g		20.77		16.86		12.04		56.41		39.03
Noninterest income and expense
Noninterest income		h	$	433		424		124		1,707		394
Impact of notable items, before income tax				(145	)	(141	)	(11	)	(856	)	(64	)
Adjusted or core noninterest income		i	$	288		283		113		851		330
Noninterest expense		j	$	760		745		314		2,315		911
Impact of notable items, before income tax				(183	)	(179	)	(10	)	(600	)	(29	)
Adjusted or core noninterest expense		k	$	577		566		304		1,715		882
Provision (benefit) for credit losses
Provision (benefit) for credit losses			$	60		42		(1	)	566		(32	)
Plus: Day 2 provision for credit losses				—		—		—		(513	)	—
Adjusted provision (benefit) for credit losses			$	60		42		(1	)	53		(32	)
PPNR
Net income (GAAP)		a	$	315		255		124		841		424
Plus:
Provision (benefit) for credit losses				60		42		(1	)	566		(32	)
Income tax expense (benefit)				93		82		34		129		124
PPNR (non-GAAP)		l	$	468		379		157		1,536		516
Plus: total notable items, before income tax				38		38		(1	)	(256	)	(35	)
Adjusted PPNR (non-GAAP)		m	$	506		417		156		1,280		481
Note: Certain items above do not precisely recalculate as presented due to rounding.
Dollars in millions, except share and per share data
				BancShares		BancShares		BancShares		BancShares		BancShares
				QTD		QTD		QTD		YTD		YTD
Non-GAAP Reconciliations (continued)				9/30/22		6/30/22		9/30/21		9/30/22		9/30/21
ROA
Net income (GAAP)		a	$	315		255		124		841		424
Annualized net income		n = a annualized		1,250		1,023		492		1,124		567
Adjusted net income (non-GAAP)		d		338		287		123		931		397
Annualized adjusted net income		p = d annualized		1,341		1,151		488		1,245		531
Average assets		o		107,987		107,575		55,924		108,643		53,927
ROA		n/o		1.16	%	0.95	%	0.88	%	1.03	%	1.05	%
Adjusted ROA		p/o		1.24	%	1.07	%	0.87	%	1.15	%	0.98	%
PPNR ROA
PPNR (non-GAAP)		l	$	468		379		157		1,536		516
Annualized PPNR		q = l annualized		1,858		1,519		623		2,054		690
Adjusted PPNR (non-GAAP)		m		506		417		156		1,280		481
Annualized PPNR		r = m annualized		2,009		1,672		621		1,712		643
PPNR ROA		q/o		1.72	%	1.41	%	1.11	%	1.89	%	1.28	%
Adjusted PPNR ROA		r/o		1.86	%	1.56	%	1.10	%	1.58	%	1.19	%
ROE and ROTCE
Annualized net income available to common shareholders		s = b annualized	$	1,202		955		472		1,076		548
Annualized adjusted net income available to common shareholders		t = e annualized	$	1,293		1,083		468		1,197		512
Average stockholders' equity (GAAP)			$	10,499		10,567		4,561		10,497		4,427
Less: average preferred stock				881		881		340		877		340
Average common stockholders' equity (non-GAAP)		u	$	9,618		9,686		4,221		9,620		4,087
Less: average goodwill				346		346		350		346		350
Less: average other intangible assets				148		153		24		161		26
Average tangible common equity (non-GAAP)		v	$	9,124		9,186		3,847		9,113		3,711
ROE		s/u		12.49	%	9.87	%	11.29	%	11.18	%	13.50	%
Adjusted ROE		t/u		13.47	%	11.19	%	11.18	%	12.44	%	12.61	%
ROTCE		s/v		13.17	%	10.40	%	12.39	%	11.80	%	14.88	%
Adjusted ROTCE		t/v		14.20	%	11.80	%	12.27	%	13.13	%	13.89	%
Tangible common equity to tangible assets
Stockholders' equity (GAAP)		w	$	9,833		10,642		4,582		9,833		4,582
Less: preferred stock				881		881		340		881		340
Common equity (non-GAAP)		x	$	8,952		9,761		4,242		8,952		4,242
Less: goodwill				346		346		350		346		350
Less: other intangible assets				145		150		22		145		22
Tangible common equity (non-GAAP)		y	$	8,461		9,265		3,870		8,461		3,870
Total assets (GAAP)		z		109,310		107,673		56,902		109,310		56,902
Tangible assets (non-GAAP)		aa		108,819		107,177		56,530		108,819		56,530
Total equity to total assets		w/z		9.00	%	9.88	%	8.05	%	9.00	%	8.05	%
Tangible common equity to tangible assets (non-GAAP)		y/aa		7.78	%	8.64	%	6.84	%	7.78	%	6.84	%
Note: Certain items above do not precisely recalculate as presented due to rounding.
Dollars in millions, except share and per share data
				BancShares		BancShares		BancShares		BancShares		BancShares
				QTD		QTD		QTD		YTD		YTD
Non-GAAP Reconciliations (continued)				9/30/22		6/30/22		9/30/21		9/30/22		9/30/21
Book value and tangible book value per common share
Common shares outstanding at period end		bb		14,976,127		16,002,385		9,816,405		14,976,127		9,816,405
Book value per share		x/bb	$	597.75		609.95		432.07		597.75		432.07
Tangible book value per share		y/bb	$	564.97		578.92		394.15		564.97		394.15
Efficiency ratio
Net interest income		cc	$	795		700		347		2,144		1,033
Efficiency ratio (GAAP)		j / (h + cc)		61.91	%	66.34	%	66.58	%	60.11	%	63.81	%
Adjusted efficiency ratio (non-GAAP)(1)		k / (i + cc)		53.32	%	57.55	%	66.09	%	57.25	%	64.69	%
Note: Certain items above do not precisely recalculate as presented due to rounding.

Contact:	Deanna Hart	Barbara Thompson
	Investor Relations	Corporate Communications
	919-716-2137	919-716-2716