FCNCA 8-K
First Citizens Bancshares Inc /De/ (FCNCA)
8-K
2022-07-28
For: 2022-07-28
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Added on
April 10, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 28, 2022
_________________________________________________________________
First Citizens BancShares, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
Registrant’s telephone number, including area code: (919 ) 716-7000
________________________________________________________________________________
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||||||||
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||||||
Securities Registered Pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
Item 2.02. Results of Operations and Financial Condition.
On July 28, 2022, First Citizens BancShares, Inc. (“BancShares”) announced its results of operations for the quarter ended June 30, 2022. A copy of BancShares’ press release containing this information is attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”) and is incorporated herein by reference. The press release is available on BancShares’ Internet site at http://www.firstcitizens.com.
Item 7.01. Regulation FD Disclosure.
As previously announced, BancShares will host a conference call at 9:00a.m. Eastern time on Thursday, July 28, 2022, to discuss its financial results for the quarter ended June 30, 2022. The slides that will be made available in connection with the presentation are attached as Exhibit 99.2 hereto and incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information presented herein pursuant to Item 2.02, “Results of Operations and Financial Condition” and Item 7.01, “Regulation FD Disclosure,” including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall the information be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 8.01. Other Events.
On July 26, 2022, the Board of Directors (the “Board”) of BancShares authorized a share repurchase program for up to 1,500,000 shares of BancShares’ Class A common stock for the period commencing August 1, 2022 through July 28, 2023. This authority supersedes the authority to repurchase shares approved by the Board in April 2020, which expired on July 31, 2020.
Under the newly authorized share repurchase program, shares of BancShares’ Class A common stock may be repurchased from time to time on the open market or in privately negotiated transactions, including through a Rule 10b5-1 plan, but the Board's action does not obligate BancShares to repurchase any particular number of shares, and repurchases may be suspended or discontinued at any time (subject to the terms of any Rule 10b5-1 plan in effect).
The authorization to repurchase Class A common stock will be utilized at management’s discretion. The actual timing and amount of Class A common stock that may be repurchased under the new authorization will depend on a number of factors, including the terms of any Rule 10b5-1 plan then in effect, price, general business and market conditions, and alternative investment opportunities or capital needs. Information regarding share repurchases will be available in BancShares’ periodic reports on Form 10-Q and Form 10-K filed with the Securities and Exchange Commission as required by the applicable rules of the Exchange Act.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits. The following exhibits accompany this Report.
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
Disclosures About Forward-Looking Statements
This Report may contain “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,” “forecasts,” “intends,” “plans,” “projects,” “targets,” “designed,” “could,” “may,” “should,” “will” 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 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’ previously announced acquisition transaction(s), including the recently-completed transaction with CIT Group Inc., 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 law or regulation, BancShares disclaims any obligation to update such factors 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.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
First Citizens BancShares, Inc. | ||||||||||||||
(Registrant) | ||||||||||||||
Date: | July 28, 2022 | By: /s/ Craig L. Nix | ||||||||||||
Name: Craig L. Nix | ||||||||||||||
Title: Chief Financial Officer | ||||||||||||||
NEWS RELEASE For Immediate Release Contact: Deanna Hart Barbara Thompson July 28, 2022 Investor Relations Corporate Communications 919-716-2137 919-716-2716 FIRST CITIZENS BANCSHARES REPORTS SECOND QUARTER 2022 EARNINGS RALEIGH, N.C. -- 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. 1
• 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. 2
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® 3
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). 4
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. 5
Dollars in millions, except share and per share data Income Statement (unaudited) (1) 0 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. 6
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. 7
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. 8
Dollars in millions, except share and per share data Income Statement (unaudited) 0 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. 9
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. 10
Dollars in millions, except share and per share data Condensed Income Statement (unaudited) - Adjusted for Notable Items (1) 0 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. 11
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. 12
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 13
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 14
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 % 15
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. 16
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. 17
Dollars in millions, except share and per share data Income Statement- Combined June 30, 2021 0 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 — 27 27 — 51 51 Cardholder services, net 22 1 23 42 1 43 Merchant services, net 8 1 9 17 1 18 Insurance commissions 4 6 10 8 11 19 Realized gain on sales of investment securities available for sale, net 16 3 19 25 108 133 Fair value adjustment on marketable equity securities, net 12 — 12 28 — 28 Bank-owned life insurance — 9 9 1 17 18 Gain on sales of leasing equipment, net — 29 29 — 57 57 Other noninterest income 8 55 63 21 91 112 Total noninterest income 133 350 483 270 775 1,045 NONINTEREST EXPENSE Depreciation on operating lease equipment — 83 83 — 168 168 Maintenance and other operating lease expenses — 54 54 — 106 106 Salaries and benefits 188 142 330 372 298 670 Net occupancy expense 28 18 46 58 36 94 Equipment expense 29 22 51 59 45 104 Professional fees 4 15 19 8 22 30 Third-party processing fees 14 8 22 28 15 43 FDIC insurance expense 4 9 13 7 19 26 Marketing 2 6 8 4 9 13 Merger-related expenses 6 — 6 13 5 18 Intangible asset amortization 3 8 11 6 17 23 Other noninterest expense 22 26 48 42 62 104 Total noninterest expense 300 391 691 597 802 1,399 Income before income taxes 199 299 498 390 698 1,088 Income tax expense (benefit) 46 72 118 90 168 258 Net income $ 153 227 380 300 530 830 Preferred stock dividends 5 12 17 9 15 24 Net income available to common stockholders $ 148 215 363 291 515 806 Basic earnings per common share $ 15.09 N/A N/A 29.63 N/A N/A Diluted earnings per common share $ 15.09 N/A N/A 29.63 N/A N/A Weighted average common shares outstanding (basic) 9,816,405 N/A N/A 9,816,405 N/A N/A Weighted average common shares outstanding (diluted) 9,816,405 N/A N/A 9,816,405 N/A N/A (1) The income statements for the quarter-to-date and year-to-date periods ending June 30, 2021 reflect the historical results of BancShares and CIT on a combined basis to facilitate more meaningful comparisons to historical periods prior to the CIT Merger. The table reconciles BancShares’ historical results (GAAP) to the combined results (non-GAAP). The combined historical information is presented as reported by each company without adjustment for the acquisition method of accounting and is intended for comparative purposes only. Such combined historical information is not necessarily indicative of the results that might have occurred had the CIT Merger taken place as of the beginning of the applicable period presented nor is it indicative of results to be expected in any future period. 18
Dollars in millions, except share and per share data Adjusted Income Statement- Combined June 30, 2021 0 BancShares QTD CIT QTD Combined QTD (1) BancShares YTD CIT YTD Combined YTD (1) Interest income $ 362 371 733 717 758 1,475 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 106 140 246 218 273 491 Noninterest expense 291 264 555 578 519 1,097 Income before income taxes 181 216 397 357 479 836 Income tax expense (benefit) 41 53 94 82 116 198 Net income $ 140 163 303 275 363 638 Preferred stock dividends 5 12 17 9 15 24 Net income available to common stockholders $ 135 151 286 266 348 614 Basic earnings per common share $ 13.63 N/A N/A 26.99 N/A N/A Diluted earnings per common share $ 13.63 N/A N/A 26.99 N/A N/A Weighted average common shares outstanding (basic) 9,816,405 N/A N/A 9,816,405 N/A N/A Weighted average common shares outstanding (diluted) 9,816,405 N/A N/A 9,816,405 N/A N/A (1) The adjusted income statements for the quarter-to-date and year-to-date periods ending June 30, 2021 reflect the historical results of BancShares and CIT on a combined basis to facilitate more meaningful comparisons to historical periods prior to the CIT Merger. The table above reconciles BancShares’ historical adjusted results to the combined results.The combined historical information is presented as reported by each company without adjustment for the acquisition method of accounting and is intended for comparative purposes only. Such combined historical information is not necessarily indicative of the results that might have occurred had the CIT Merger taken place as of the beginning of the applicable period presented nor is it indicative of results to be expected in any future period. 19
Dollars in millions Balance Sheet- Combined as of June 30, 2021 BancShares 2Q21 CIT 2Q21 Combined (1) 2Q21 ASSETS Cash and due from banks $ 395 147 542 Interest-earning deposits at banks 7,871 5,135 13,006 Securities purchased under agreements to resell — 150 150 Investments in marketable equity securities 119 — 119 Investment securities available for sale 7,381 5,082 12,463 Investment securities held to maturity 3,395 2 3,397 Assets held for sale 108 51 159 Loans and leases 32,690 33,711 66,401 Allowance for credit losses (189) (851) (1,040) Loans and leases, net of allowance for credit losses 32,501 32,860 65,361 Operating lease equipment, net — 7,782 7,782 Premises and equipment, net 1,238 185 1,423 Bank-owned life insurance 115 1,186 1,301 Goodwill 350 — 350 Other intangible assets 25 118 143 Other assets 1,677 2,006 3,683 Total assets $ 55,175 54,704 109,879 LIABILITIES Deposits Noninterest-bearing $ 20,974 3,531 24,505 Interest-bearing 27,436 37,755 65,191 Total deposits 48,410 41,286 89,696 Credit balances of factoring clients — 1,531 1,531 Securities sold under customer repurchase agreements 693 — 693 Federal Home Loan Bank borrowings 647 — 647 Senior unsecured borrowings — 3,739 3,739 Subordinated debt 497 495 992 Other borrowings 81 10 91 Other liabilities 370 1,607 1,977 Total liabilities $ 50,698 48,668 99,366 STOCKHOLDERS' EQUITY Preferred stock 340 525 865 Common Stock: — 2 2 Class A 9 — 9 Class B 1 — 1 Additional paid in capital — 3,751 3,751 Retained earnings 4,149 1,874 6,023 Accumulated other comprehensive (loss) (22) (116) (138) Total stockholders’ equity 4,477 6,036 10,513 Total liabilities and stockholders’ equity $ 55,175 54,704 109,879 (1) The balance sheet as of June 30, 2021 reflects the historical balance sheets of BancShares and CIT on a combined basis to facilitate more meaningful comparisons to historical periods prior to the CIT Merger. The table above reconciles BancShares’ historical balance sheet (GAAP) to the combined balance sheet (non-GAAP). The combined historical information is presented as reported by each company without adjustment for the acquisition method of accounting and is intended for comparative purposes only. Such combined historical information is not necessarily indicative of the results that might have occurred had the CIT Merger taken place as of the beginning of the applicable period presented nor is it indicative of results to be expected in any future period. 20
First Citizens BancShares, Inc. Second Quarter 2022 Earnings Conference Call July 28, 2022
Agenda Page(s) Section I – Merger Integration Update 5 – 7 Section II – Commercial Bank Credit Update 8 – 11 Section III – Second Quarter 2022 Financial Results 12 – 32 Key Take-Aways 13 Financial Highlights 14 Earnings Highlights 15 – 16 Notable Items 17 Net interest income and margin 18 – 20 Noninterest income and expense 21 – 23 Balance Sheet Highlights 24 Loans and Leases HFI 25 – 26 Deposits and Funding Mix 27 – 29 ACL and Credit Quality Trends 30 – 31 Capital 32 Section IV – Financial Outlook 33 – 34 Key Earnings Estimate Assumptions 34 Section V – Appendix 35 – 50
Important Notices 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 First Citizens BancShares, Inc. ("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 Group Inc. (“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. In addition, statements in this presentation related to future plans involving possible commencement of a share repurchase program remain subject to board and relevant regulatory approvals. 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”). The information presented for the periods ended March 31, 2022 and June 30, 2022 is consolidated. Bancshares acquired CIT on January 3, 2022. The information for prior periods, unless otherwise noted, represents combined information for BancShares and CIT. Non-GAAP Measures Certain measures in this presentation 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 presented in this presentation are reconciled to the most comparable GAAP measure, in the Non-GAAP reconciliation table(s) appearing in the Appendix.
Merger Integration Update Section I
Merger Integration is Substantially Complete We are committed to successful execution of our integration plan to deliver a timely and smooth transition for our customers and associates. Update • We completed a number of key milestones including the recent OneWest Bank and Treasury Management Services systems conversion. • Merger integration targeted to be completed by the end of 2022. • We will continue to prioritize optimization efforts in 2023 and beyond. Progress since legal close.... Upcoming milestones.... Payroll moved onto a common system Treasury systems consolidation Filed first combined 10-Q Completed benefits integration Consolidated risk and internal reporting Mortgage originations common platform OneWest Bank / Treasury Management conversion Mortgage Wholesale/Third Party Originations conversion 4Q22 CIT Bank Branch Conversion (former Mutual of Omaha) 4Q22 5
6 Focus on Achieving Cost Saves Included in Run-Rate 2022 2023 ~$170 MM Run-rate in 2Q22 (68% of target) ~$200 MM Run-rate by 4Q22 (80% of target) ~$250 MM Run-rate by 4Q23 (100% of target) On track to achieve estimated costs saves of ~$250 million • Reduced personnel expense by $120 million and project an additional $30 million reduction by the end of 2023. • Achieved over $60 million in non- personnel savings resulting from reductions in FDIC insurance, professional fees and third-party expenses. • Continue to focus on other operational efficiencies which we project will result in an additional $30 million in non- personnel cost reductions by the end of 2023. • Identified over $10 million in occupancy expense savings which will be realized by the end of 2023.
7Commercial Bank and Rail Focused on leveraging the combined company’s expertise and capabilities to serve our customers. Commercial Finance • Talent retention and continuity of leadership in the businesses sets the team up for current and future growth. • Demand remains strong with pipelines well above 2021 levels. • Retail sectors are performing well as we integrate Commercial Services (factoring) in the new footprint. • Originations and portfolio performance remain stellar and current asset levels are near record highs. • Sizeable opportunity exists to better serve the branch network. • Lending environment remains competitive but originations remain strong. • Remain focused on maintaining underwriting and risk rigor in current economic cycle. Business Capital (Leasing) Real Estate Finance Rail • Utilization improved to 96.2% in 2Q22 and repricing was favorable at 114% of the expiring rate. • While there are no recessionary indications apparent in the portfolio currently, we continue to watch the market closely.
Commercial Bank Segment Credit Update Section II
- Cash Flow - CRE - Equip. Finance - Asset-Backed - Consumer Mortgages - Rail (2) - Factoring - HOA - ABL - Sub-Prime Mortgages - Mezz-Sub CRE + Pvt. Student Loans - Cash Flow - Commercial Air - Equip. Finance (international) - Equip. Finance (domestic) - Asset-Backed - Rail - Factoring - ABL - Student Loans (Gov. Guaranteed) (1) These totals represent gross loans and leases, including unfunded commitments, for legacy CIT prior to the merger. (2) Rail is currently a separate business segment and Rail operating leases constitutes ~7% of total assets as of 2Q22. Commercial Bank Credit Profile Prior to merger consummation in 1Q22, the portfolio was significantly de-risked – a process which began in 2007. Higher Risk Portfolios Sold or Reduced • Sold Alt-A/Sub-Prime Consumer Mortgages • Liquidated Mezzanine and Subordinated CRE Loans • Transitioned Cash Flow loan portfolio: ◦ 11% of total exposure, down from 15% ◦ $5.4 B of exposure, down from over $12 B ◦ Rebalanced with less cyclical industries • Reduced asset and liquidity risk with the sale of Commercial Air (operating lease business), including the off-balance sheet order book • Sold all International Equipment Finance portfolios • Exited Franchise Finance portfolio • Sold Aviation Lending portfolio (loans against aircraft leased to commercial airlines) • Rebalanced Healthcare toward more real estate secured vs cash flow (enterprise value dependent) Product Type by Exposure (1) 2007: $75 billion 4Q21: $48 billion 15% 9% 8% 5% 9% 7% 9% 10% 15% 2% 12% 9% 2% 11% 15% 11% 10% 10% 21% 11% 9
1.89% 3.26% 2.95% 2.73% 2.58% 2.43% Note – Excludes aviation lending portfolio that was moved to held for sale. Commercial Bank Portfolio Successfully Weathered the Pandemic The strong risk culture and credit risk discipline established after 2007 enabled the credit portfolio to weather the stress introduced during the initial phase of the COVID-19 pandemic. Highlights • Maintained strong risk culture and robust credit underwriting standards. • Disciplined approach in the face of competitive market conditions. • Focused on strong structures and collateral values that aligned to our expertise. • Portfolio management rigor provided early warning to minimize losses. • Risk profile of new originations was better than existing performing portfolio. Nonaccrual loans & net charge-offs (NCO) $308 $453 $417 $330 $333 4Q19 1Q21 2Q21 3Q21 4Q21 $0 $100 $200 $300 $400 $500 $600 0.07% 0.14%0.36%0.15%0.52% Nonaccrual loans Net charge-off ratio Allowance for loan losses (ACL) $460 $934 $828 $743 $701 $646 4Q19 4Q20 1Q21 2Q21 3Q21 4Q21 $0 $150 $300 $450 $600 $750 $900 $1,050 $1,200 Commercial banking ACL $ in millions Commercial banking ACL to loans $ in millions 10
Combined Credit Risk Appetite The company has a moderate credit risk appetite. • Legacy First Citizens: 49% • Legacy CIT: 51% Outstandings (1) • Legacy First Citizens: 54% • Legacy CIT: 46% Exposure (1) 76% High - Moderate 86% Moderate - Low 29% + 47% 24% 21% 79% 14% 33% 53% (1) Credit metrics are as of 12/31/2021. 11
Second Quarter 2022 Financial Results Section III
Share repurchase plan for repurchase of 1,500,000 shares approved by the Board on July 26th. Key Take-Aways - Second Quarter Financial Performance 1 Strong growth in pre-provision net revenue driven by net interest and noninterest income growth and good expense control. 2 Credit remains in good shape with credit quality metrics continuing to show well. 6 Loan growth was strong in the branch network and commercial bank, exceeding our expectations. 7 Provision build during the quarter due to changes in CECL macroeconomic forecasts and loan growth. 5 Net interest margin expanded and we expect continued expansion in the second half of the year. 3 Efficiency ratio improved due to strong core net revenue growth and recognition of merger cost savings. 4 Deposits declined primarily due to run-off of higher cost acquired deposits. Noninterest bearing deposits continued to grow. 8 13
Note – Adjusted metrics account for certain notable items outlined on the following pages. (1) For QTD & YTD June 2021, reported and adjusted (non-GAAP) metrics for EPS, ROE, ROTCE and ROA are for legacy BancShares and do not include legacy CIT results. (2) For QTD & YTD June 2021, reported and adjusted (non-GAAP) metrics for NIM and net charge-off ratio are presented as if legacy BancShares and legacy CIT were combined during the historical periods. Quarter-to-date Year-to-date Jun 22 Mar 22 Jun 21 Jun 22 Jun 21 EPS (1) $ 14.86 $ 16.86 $ 16.70 $ 18.95 $ 15.09 $ 13.63 $ 31.48 $ 35.67 $ 29.63 $ 26.99 ROE (1) 9.87 % 11.19 % 11.18 % 12.67 % 14.64 % 13.23 % 10.51 % 11.91 % 14.67 % 13.37 % ROTCE (1) 10.40 % 11.80 % 11.83 % 13.41 % 16.14 % 14.58 % 11.11 % 12.58 % 16.21 % 14.76 % ROA (1) 0.95 % 1.07 % 1.00 % 1.12 % 1.13 % 1.02 % 0.97 % 1.10 % 1.14 % 1.04 % NIM (2) 3.04 % 3.04 % 2.73 % 2.73 % 2.56 % 2.56 % 2.89 % 2.89 % 2.58 % 2.58 % Net charge-off ratio (2) 0.13 % 0.13 % 0.09 % 0.09 % 0.16 % 0.16 % 0.11 % 0.11 % 0.12 % 0.12 % Reported Adjusted (Non-GAAP) Financial Highlights Reported Adjusted (Non-GAAP) Reported Adjusted (Non-GAAP) Reported Adjusted (Non-GAAP) Reported Adjusted (Non-GAAP) 14
Reported Increase (decrease) QTD 1Q22 2Q21 2Q22 1Q22 2Q21 $ % $ % Net interest income $ 700 $ 649 $ 612 $ 51 7.9 % $ 88 14.4% Noninterest income 424 850 484 (426) (50.1) (60) (12.4) Net revenue 1,124 1,499 1,096 (375) (25.0) 28 2.6 Noninterest expense 745 810 691 (65) (8.0) 54 7.8 Pre-provision net revenue 379 689 405 (310) (45.0) (26) (6.4) Provision (benefit) for credit losses 42 464 (94) (422) (90.9) 136 (144.7) Income before income taxes 337 225 499 112 49.8 (162) (32.5) Income taxes 82 (46) 118 128 (278.3) (36) (30.5) Net income 255 271 381 (16) (5.9) (126) (33.1) Preferred stock dividends 17 7 17 10 142.9 — — Net income available to common stockholders $ 238 $ 264 $ 364 $ (26) (9.8) % $ (126) (34.6) % Adjustment for notable items 2Q22 1Q22 2Q21 Noninterest income $ (141) $ (570) $ (238) Noninterest expense (179) (238) (136) Provision for credit losses — (513) — Income taxes 6 146 (24) Adjusted Increase (decrease) QTD 1Q22 2Q21 2Q22 1Q22 2Q21 $ % $ % Net interest income $ 700 $ 649 $ 612 $ 51 7.9 % $ 88 14.4 % Noninterest income 283 280 246 3 1.1 37 15.0 Net revenue 983 929 858 54 5.8 125 14.6 Noninterest expense 566 572 555 (6) (1.0) 11 2.0 Pre-provision net revenue 417 357 303 60 16.8 114 37.6 Provision (benefit) for credit losses 42 (49) (94) 91 (185.7) 136 (144.7) Income before income taxes 375 406 397 (31) (7.6) (22) (5.5) Income taxes 88 100 94 (12) (12.0) (6) (6.4) Net income 287 306 303 (19) (6.2) (16) (0.1) Preferred stock dividends 17 7 17 10 142.9 — — Net income available to common stockholders $ 270 $ 299 $ 286 $ (29) (9.7) % $ (16) (5.6) % Note – The financial information provided for 2021 is presented as if legacy BancShares and legacy CIT were combined for the historical periods. Notable Items are detailed on page 17. Totals may not foot due to rounding. Quarter-to-Date Earnings Highlights ($ in millions) Highlights • Note: The commentary below relates to the “Adjusted” income statement. 2Q22 vs. 1Q22 • Net interest income increased by $51 million primarily due to higher yields on earnings assets, loan growth, and lower borrowing costs, partially offset by higher deposit costs. • 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. • Noninterest expense decreased by $6 million primarily due to a decline in personnel expense. • Provision for credit losses increased by $91 million primarily due to changes in CECL macroeconomic scenarios and loan growth. 2Q22 vs. 2Q21 • Net interest income increased by $88 million primarily due to lower borrowings and an increase in interest income driven by higher yields on investment securities, offset by a decline in accretion income on acquired loans and lower SBA-PPP income. • 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. • 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. 15
Reported YTD Increase (decrease) 2022 2021 YTD 21 - YTD 22 $ % Net interest income $ 1,349 $ 1,218 $ 131 10.8% Noninterest income 1,274 1,046 228 21.8 Net revenue 2,623 2,264 359 15.9 Noninterest expense 1,555 1,399 156 11.2 Pre-provision net revenue 1,068 865 203 23.5 Provision (benefit) for credit losses 506 (224) 730 (325.9) Income before income taxes 562 1,089 (527) (48.4) Income taxes 36 258 (222) (86.0) Net income 526 831 (305) (36.7) Preferred stock dividends 24 24 — — Net income available to common stockholders $ 502 $ 807 $ (305) (37.8) % Adjustment for notable items YTD 22 YTD 21 Noninterest income $ (711) $ (555) Noninterest expense (417) (302) Provision for credit losses (513) — Income taxes 152 (60) Adjusted YTD Increase (decrease) 2022 2021 YTD 21 - YTD 22 $ % Net interest income $ 1,349 $ 1,218 $ 131 10.8% Noninterest income 563 491 72 14.7 Net revenue 1,912 1,709 203 11.9 Noninterest expense 1,138 1,097 41 3.7 Pre-provision net revenue 774 612 162 26.5 Provision (benefit) for credit losses (7) (224) 217 (96.9) Income before income taxes 781 836 (55) (6.6) Income taxes 188 198 (10) (5.1) Net income 593 638 (45) (7.1) Preferred stock dividends 24 24 — — Net income available to common stockholders $ 569 $ 614 $ (45) (7.3%) Note – The financial information provided for 2021 is presented as if legacy BancShares and legacy CIT were combined for the historical periods. Notable Items are detailed on page 17. Totals may not foot due to rounding. Year-to-Date Earnings Highlights ($ in millions) Highlights • Note: The commentary below relates to the “Adjusted” income statement. YTD 22 vs. YTD 21 • Net interest income increased by $131 million primarily due to a reduction in borrowings, lower deposit rates and higher loan yields, partially offset by lower accretion income on acquired loans and SBA-PPP interest and fee income. • Noninterest income increased by $72 million primarily due to increase in rental income on operating leases, net, higher service charges on deposit accounts and increases in wealth management and card income. • Noninterest expense increased by $41 million due primarily to higher personnel costs and other operating expenses. • Net provision benefit declined $217 million due to a smaller net benefit in the current period driven primarily by changes in CECL macroeconomic scenarios and loan growth. 16
Notable Items ($ in millions) 2Q22 1Q22 2Q21 YTD 22 YTD 21 Rental income on operating leases, net $ (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) Depreciation on operating lease equipment $ (89) $ (81) $ (83) $ (170) $ (168) Maintenance and other operating lease equipment expense (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 — 27 8 27 8 Other noninterest expense (1) (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 (2) $ 6 $ 146 $ (24) $ 152 $ (60) Impact of notable items on net income $ 32 $ 35 $ (78) $ 67 $ (193) Impact of notable items on EPS $ 2.00 $ 2.25 N/A (3) $ 4.19 N/A (3) Note – QTD June 2021 and YTD June 2021 are presented as if legacy BancShares and legacy CIT were combined for the historical periods. Adjustments are shown pre-tax. Totals may not foot due to rounding. (1) In 2021, other expense includes a reserve release related to the prior sale of certain mortgage loans and the establishment of a litigation reserve. (2) A blended tax rate was applied to each period to arrive at the adjusted net income. (3) The EPS impact for prior quarters is not shown given different share totals for each legacy institution. 17
$612 $604 $619 $649 $700 $1,218 $1,349 2.56% 2.53% 2.56% 2.73% 3.04% 2.58% 2.89% NII NIM 2Q21 3Q21 4Q21 1Q22 2Q22 YTD Jun 21 YTD Jun 22 2Q22 vs 1Q22 • Net interest income increased by $51 million due to a $47 million increase in interest income and a $4 million decrease in interest expense. NIM expanded from 2.73% to 3.04%. ◦ $34 million increase in interest income on loans due to increased yields and balances, ◦ $13 million increase in interest income on investment securities and overnight investments due to higher yields, ◦ $7 million decline in interest expense due to the debt redemption, partially offset by ◦ $4 million increase in interest expense on deposits due to higher rates. YTD June 2022 vs YTD June 2021 • Net interest income increased by $131 million due to a $139 million decrease in interest expense, partially offset by an $8 million decline in interest income. NIM expanded from 2.58% to 2.89%. ◦ $89 million decline in interest income on borrowings due to the debt redemption, ◦ $70 million increase in interest income on investment securities due to higher yields, a larger portfolio and PAA, ◦ $49 million decline in interest expense on deposits due to lower rates and PAA, ◦ $13 million increase in interest on overnight investments due to higher yields, partially offset by, ◦ $91 million decline in interest income on loans due to lower PAA, lower SBA-PPP income and lower loan balances, partially offset by higher loan yields ex-PAA and SBA-PPP income. $131 million & 31 bps Highlights Net interest income and margin (NIM) ($ in millions) Note – The financial data and ratios provided on this page are presented as if legacy BancShares and legacy CIT were combined for the historical periods. The primary drivers of the changes in net interest income are included above and a rollforward of NIM is on the following page. $51 million & 31 bps 2Q22 vs 2Q21 • Net interest income increased by $88 million due to a $64 million decrease in interest expense and a $24 million increase in interest income. NIM expanded from 2.56% to 3.04%. ◦ $47 million decline in interest expense on borrowings due to the debt redemption in 1Q22, ◦ $38 million increase in interest income on investment securities due to higher yields, a larger portfolio and the impact of purchase accounting adjustments (PAA), ◦ $18 million decline in deposit expense due to lower rates and PAA, ◦ $11 million increase in interest income on overnight investments due to higher rates, partially offset by ◦ $25 million decline in interest income on loans due to lower PAA, lower SBA-PPP income and lower loan balances, partially offset by higher loan yields ex-PAA and SBA-PPP income. 18
NIM Rollforward Note – The information provided on this page is presented as if legacy BancShares and legacy CIT were combined for the historical periods. 2.56% 0.29% 0.16% 0.09% 0.05% 0.05% 0.04% (0.10)% (0.05)% (0.05)% 3.04% 2Q21 Debt redemption Loan yield Yield on investments Yield on overnight investments Investment volume Deposit rate SBA-PPP Loan decline Purchase accounting 2Q22 2.73% 0.10% 0.09% 0.08% 0.04% 0.03% (0.01)% (0.02)% 3.04% 1Q22 Loan yield Loan growth Debt redemption Yield on overnight investments Yield on investments Deposit rate SBA-PPP 2Q22 1Q22 to 2Q22 (+ 31 bps) 2Q21 to 2Q22 (+ 48 bps) 19
2Q22 Interest Rate Sensitivity 20 Net interest income and margin rate sensitivity Note – The above information is an illustrative example of changes in net interest income and net interest margin using a static balance sheet and forward swap curves in place as of the end of June. Actual results may differ from above. (1) Impacts to NII and NIM may change due to actual results being different than modeled expectations. Highlights • BancShares continues to have an asset sensitive interest rate risk profile. • The projected increase in net interest income over the next 12 months is 5.2% for an immediate 100 bps parallel shift (shock) in the yield curve and 2.0% for a gradual shift (ramp) of 100 bps. • Asset sensitivity is largely driven by the composition of the balance sheet, primarily due to floating rate loans and cash, as well as a strong core deposit base with modest betas. • Deposit betas are modeled and at 20% - 25%. • Approximately 45% of our loans are floating indexed primarily to 1-month LIBOR, 3-month LIBOR, Prime and SOFR. • The duration of our investment portfolio is ~4.6 years, and helps to mitigate earnings risk in a down rate environment. (5.3)% (1.2)% 1.3% 5.2% 10.2% (2.0)% (0.5)% 0.5% 2.0% 3.8% Shock Ramp Down 100 Down 25 Up 25 Up 100 Up 200 (6.0)% (3.0)% 0.0% 3.0% 6.0% 9.0% 12.0% Illustrative impacts to NII & NIM 3Q22 4Q22 1Q23 2Q23 ($ in millions) NII NIM NII NIM NII NIM NII NIM +100 bps shock $ 32 0.14 % $ 41 0.17 % $ 42 0.18 % $ 45 0.19 % +100 bps ramp $ 2 0.01 % $ 11 0.05 % $ 20 0.09 % $ 30 0.13 % -100 bps ramp $ (34) (0.14) % $ (42) (0.18) % $ (44) (0.19) % $ (47) (0.20) % (1)
$347 $294 $325 $726 $318 $772 $1,014 $246 $240 $266 $280 $283 $491 $563$101 $54 $59 $446 $281 $451 Core (1) Non-core 2Q21 3Q21 4Q21 1Q22 2Q22 YTD Jun 21 YTD Jun 22 2Q22 vs 1Q22 • Core noninterest income increased $3 million. Significant components of the change were: ◦ Fee income and other service charges increased $5 million primarily due to higher capital markets fees and wealth management income increased $2 million; ◦ Partially offset by a decrease in rental income on operating leases, net due to higher depreciation and maintenance expense. • Non-core noninterest income decreased $441 million due primarily to the $431 million preliminary bargain purchase gain as a result of the CIT acquisition in the first quarter. YTD June 2022 vs YTD June 2021 • Core noninterest income increased $72 million. Significant components of the change were: ◦ Rental income on operating leases, net, increased $53 million due to higher gross revenue driven by increased utilization and higher lease rates. ◦ Service charges on deposit accounts increased $11 million due to higher overdraft and NSF fees and higher commercial service charges. ◦ Wealth management services increased $8 million due to increased annuity sales and higher assets under management. ◦ Cardholder services income increased $8 million due to higher volumes. • Non-core noninterest income increased $170 million due primarily to the $431 million preliminary bargain purchase gain as a result of the CIT acquisition in the first quarter of 2022, partially offset by declines in gains on investments, loans and other assets. Highlights Core: 1% increase Core: 15% increase Noninterest income ($ in millions) Core: 15% increase 2Q22 vs 2Q21 • Core noninterest income increased $37 million. Significant components of the change were: ◦ Rental income on operating leases, net, increased $26 million primarily due to higher gross revenue driven by increased utilization and higher lease rates. ◦ Service charges on deposits increased $5 million due to higher overdraft and NSF fees and higher commercial service charges. ◦ Wealth management income increased $5 million due to increased annuity sales and higher assets under management. • Non-core noninterest income decreased $96 million. Significant components of the change included: ◦ $33 million decline in gains on leasing equipment. ◦ $25 million decline in realized gain on sale of investments and fair market value adjustments on equity securities. Note – The financial data and ratios provided on this page are presented as if legacy BancShares and legacy CIT were combined for the historical periods. (1) Core noninterest income includes rental income on operating leases, net of depreciation and maintenance expense. Other adjustments are detailed on page 17. $5 21 28
$530 $580 $567 $686 $609 $1,125 $1,295 $17 $18 $114 $43 $28 $157 64.73% 66.58% 62.51% 61.57% 57.55% 64.17% 59.50% Core (1) Non-core Efficiency Ratio 2Q21 3Q21 4Q21 1Q22 2Q22 YTD Jun 21 YTD Jun 22 Highlights Noninterest expense ($ in millions) Note – The financial data and ratios provided on this page are presented as if legacy BancShares and legacy CIT were combined for the historical periods. (1) Core noninterest expense does not include depreciation and maintenance expense on operating leases. Other adjustments are detailed on page 17. 2Q22 vs 2Q21 • Core noninterest expense increased $11 million. Significant components of the change were: ◦ Occupancy and equipment expense increased $5 million and third-party processing fees increased $4 million. ◦ Personnel costs increased $3 million due to higher salaries expense as a result of merit increases, partially offset by net staff reductions and lower benefit costs. • Non-core noninterest expense increased $44 million. Significant components of the change were: ◦ Merger-related expenses increased $28 million and other expenses expenses increased $13 million due to reserve releases in 2Q21. • Efficiency ratio improved from 64.73% to 57.55% due to 15% core net revenue growth versus 2% core noninterest expense growth. 2Q22 vs 1Q22 • Core noninterest expense declined $6 million. Significant components of the change were: ◦ Personnel costs declined $11 million as a result of lower benefit expenses, lower incentive compensation and higher deferred loan origination costs, partially offset by higher salary expense due to annual merit and net staff additions. • Non-core noninterest expense declined $71 million. Significant components of the change were: ◦ Merger-related expenses declined $101 million, partially offset by a $27 million reversal of expense related to legacy retiree benefit plans in 1Q22. • Efficiency ratio improved from 61.57% to 57.55% as core net revenue grew by 6% and core noninterest expense declined by 1%. YTD22 vs YTD21 • Core noninterest expense increased $41 million. Significant components of the change were: ◦ Personnel costs increased $15 million as a result of merit increases, higher incentive compensation and increased benefits expense, partially offset by net staff reductions. ◦ Third-party processing expenses increased $7 million, occupancy and equipment expense increased $5 million and marketing expense increased $4 million. • Non-core noninterest expense increased $129 million. Significant components of the change were: ◦ Merger-related expenses increased $151 million, partially offset by a $27 million reversal of expense related to legacy retiree benefit plans. • Efficiency ratio improved from 64.17% to 59.50% due to 12% core net revenue growth versus 4% core noninterest expense growth. $555 $563 $549 $572 $566 $1,097 $1,138 $(1) 22 54
60%18% 17% 5% Personnel ($341) Occupancy & equipment ($102) Other expenses - core ($97) Third-party processing fees ($26) 27% 14% 13% 12% 10% 10% 10% 4% Rental income on operating leases, net ($77) Fee income and other service charges ($39) Wealth management services ($37) Cardholder and merchant services, net ($35) Other income - core ($29) Service charges on deposit accounts ($28) Factoring commissions ($27) Insurance commissions ($11) 23 2Q22 Noninterest income and expense composition ($ in millions) Core noninterest income Note – the financial data and/or ratios provided on this slide are presented as if legacy BancShares and legacy CIT were combined for the historical periods. (1) Core noninterest income includes rental income on operating leases net of depreciation and maintenance as well as other Notable Items detailed on page 17. Core noninterest expense
24 Increase (decrease) 2Q22 vs 1Q22 2Q22 vs 2Q21 Select balances 2Q22 1Q22 2Q21 $ % $ % Interest-earning deposits at banks $ 6,476 $ 9,285 $ 13,006 $ (2,809) (30.3) % $ (6,530) (50.2) % Investment securities 19,136 19,469 16,129 (333) (1.7) % 3,007 18.6 % Loans and leases 67,735 65,524 66,401 2,211 3.4 % 1,334 2.0 % Operating lease equipment, net (1) 7,971 7,972 7,782 (1) — % 189 2.4 % Deposits 89,329 91,597 89,696 (2,268) (2.5) % (367) (0.4) % Borrowings 3,813 2,676 5,469 1,137 42.5 % (1,656) (30.3) % Tangible common stockholders’ equity 9,265 9,187 9,155 78 0.8 % 110 1.2 % Common stockholders' equity 9,761 9,689 9,648 72 0.7 % 113 1.2 % Total stockholders' equity 10,642 10,570 10,513 72 0.7 % 129 1.2 % Increase (decrease) Key metrics 2Q22 1Q22 2Q21 2Q22 vs 1Q22 2Q22 vs 2Q21 Common equity Tier 1 (CET1) capital ratio (2) 11.34 % 11.34 % 11.14 % — % 0.20 % Book value per common share (2) $ 609.95 $ 605.48 $ 421.39 $ 4.46 $ 188.56 Tangible book value per common share (non-GAAP) (2) $ 578.92 $ 574.09 $ 383.19 $ 4.84 $ 195.74 Tangible capital to tangible assets 8.64 % 8.50 % 8.37 % 0.14 % 0.28 % Loan to deposit ratio 75.83 % 71.54 % 74.03 % 4.29 % 1.80 % ACL to total loans and leases 1.26 % 1.29 % 1.57 % (0.04) % (0.31) % Noninterest bearing deposits to total deposits 29.83 % 28.27 % 27.32 % 1.55 % 2.51 % Balance Sheet Highlights ($ in millions, expect per share data) (1) Operating lease equipment, net includes $7.2 billion of rail assets. (2) 2Q21 reported and adjusted (non-GAAP) metrics for CET1, book value per common share and tangible book value per common share are legacy BancShares and do not include legacy CIT balances. 24
$66,401 $65,977 $65,211 $65,524 $67,735 $15,507 $15,405 $15,132 $15,423 $16,257 $50,894 $50,572 $50,079 $50,101 $51,478 Commercial Consumer 2Q21 3Q21 4Q21 1Q22 2Q22 25 Loans and Leases HFI ($ in millions) Note – the financial data and/or ratios provided on this slide are presented as if legacy BancShares and legacy CIT were combined for the historical periods. Rail assets / operating leases are not included in the loan totals. The Commercial Bank segment includes Commercial Finance, Real Estate Finance and Business Capital. The General Bank segment includes Branch Network & Wealth, Mortgage, Consumer Indirect, Direct Bank, Community Association Banking and Other General Banking. Highlights 2Q22 vs 1Q22 • Loans increased $2.2 billion from $65.5 billion to $67.7 billion or by 13.5% on an annualized basis. Excluding SBA-PPP loans, loans increased by 14.3% on an annualized basis. • The increase was due primarily to loan growth in our branch network, industry verticals, middle market banking and residential mortgage. • The primary drivers of the increase by loan type were commercial & industrial loans and residential mortgage loans. 2Q22 vs 2Q21 • Loans increased $1.3 billion from $66.4 billion to $67.7 billion or by 2.0%. Loans excluding the impact of purchase accounting and SBA-PPP increased $2.8 billion from $64.7 billion to $67.5 billion or by 4.3%. • The increase was consistent with the explanation for the linked quarter. • The primary drivers of the increase by loan type were commercial & industrial loans, residential mortgage loans and owner-occupied commercial real estate loans. Period-end line utilization 2Q22 1Q22 4Q21 3Q21 2Q21 Utilization 76.3 % 76.1 % 76.0 % 76.4 % 76.6 %
26 2Q22 Loans and Leases HFI Composition ($ in billions) Note – the financial data and/or ratios provided on this slide are presented as if legacy BancShares and legacy CIT were combined for the historical periods. Rail assets / operating leases are not included in the loan totals. The Commercial Bank segment includes Commercial Finance, Real Estate Finance and Business Capital. The General Bank segment includes Branch Network & Wealth, Mortgage, Consumer Indirect, Direct Bank, Community Association Banking and Other General Banking. 24% 9% 7% 41% 13% 2% 4% Commercial Finance ($16.3 B) Real Estate Finance ($6.0 B) Business Capital ($4.9 B) Branch Network & Wealth ($28.1 B) Mortgage ($8.8 B) Consumer indirect ($1.1 B) Other ($2.5 B) 35% 20% 18% 14% 4% 3% 3% 3% Commercial & industrial ($23.5 B) Owner-occupied commercial mortgage ($13.8 B) Residential mortgage ($12.4 B) Non-owner-occupied commercial mortgage ($9.2 B) Commercial construction ($2.8 B) Leases ($2.2 B) Revolving mortgage ($1.9 B) Consumer other ($1.9 B) Commercial Bank: General Bank: Type Segment
$89,696 $90,320 $90,777 $91,597 $89,329 $65,191 $65,408 $66,088 $65,699 $62,684 $24,505 $24,912 $24,689 $25,898 $26,645 27 bps 25 bps 23 bps 19 bps 19 bps Interest-bearing Noninterest-bearing Cost of deposits 2Q21 3Q21 4Q21 1Q22 2Q22 27 Deposits ($ in millions) Highlights 2Q22 vs. 1Q22 • Total deposits were $89.3 billion, a decrease of $2.3 billion or 9.9% on an annualized basis. • Noninterest-bearing deposits increased $747 million. • Interest-bearing deposits decreased $3.0 billion, primarily due to $1.6 billion and $861 million declines in money market deposits and time deposits, respectively. • The reduction in interest-bearing deposits was primarily concentrated in acquired higher cost Direct Bank accounts and legacy OneWest Bank branches, partially offset by growth in the branch network. 2Q22 vs. 2Q21 • Total deposits decreased $367 million or by 0.4%. • Noninterest-bearing deposits increased $2.1 billion. • Interest-bearing deposits decreased $2.5 billion, primarily driven by decreases in time deposits and savings accounts, partially offset by increases in checking accounts with interest. • The reduction in interest-bearing deposits was primarily concentrated in acquired higher cost Direct Bank accounts and legacy OneWest Bank branches, partially offset by growth in the branch network and Community Association Banking. Note – the financial data and/or ratios provided on this slide are presented as if legacy BancShares and legacy CIT were combined for the historical periods. The Commercial Bank segment includes Commercial Finance, Real Estate Finance and Business Capital. The General Bank segment includes Branch Network & Wealth, Mortgage, Consumer Indirect, Direct Bank, Community Association Banking and Other General Banking.
70% 15% 9% 5% 1% Branch Network, Wealth & Other ($62.6 B) Direct Bank ($13.3 B) Community Association Banking ($7.6 B) Commercial Bank ($4.4 B) Corporate ($1.4 B) 28 2Q22 Deposit Composition ($ in billions) Note – the financial data and/or ratios provided on this slide are presented as if legacy BancShares and legacy CIT were combined for the historical periods. The Commercial Bank segment includes Commercial Finance, Real Estate Finance and Business Capital. The General Bank segment includes Branch Network & Wealth, Mortgage, Consumer Indirect, Direct Bank, Community Association Banking and Other General Banking. 43% 30% 18% 9% Money market & savings ($38.0 B) Noninterest-bearing demand ($26.6 B) Checking with interest ($16.3 B) Time deposits ($8.4 B) General Bank: Commercial Bank and Corporate: Type Segment
0.67% 0.64% 0.62% 0.35% 0.34% 0.37% 0.34% 0.32% 0.24% 0.26% 0.27% 0.25% 0.23% 0.19% 0.19% Cost of interest-bearing liabilities Cost of interest-bearing deposits Cost of deposits 2Q21 3Q21 4Q21 1Q22 2Q22 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% Cost of funds Additional sources of liquidity Categories $ in millions FHLB $11,562 FRB 4,190 Line of Credit 75 Total $15,827 Funding Mix ($ in millions) Note – The financial data and/or ratios provided on this slide are presented as if legacy BancShares and legacy CIT were combined for the historical periods. Totals may not foot due to rounding. QTD Change 2Q22 1Q22 4Q21 3Q21 2Q21 Linked Quarter Prior Year Quarter Total deposits $ 89,329 95.2 % $ 91,597 96.5 % $ 90,777 93.8 % $ 90,320 93.6 % $ 89,696 93.6 % $ (2,268) $ (367) Securities sold under customer repurchase agreements 646 0.7 616 0.6 589 0.6 664 0.7 693 0.7 30 (47) Federal Home Loan Bank borrowings 1,785 1.9 639 0.7 645 0.7 646 0.7 647 0.7 1,146 1,138 Senior unsecured borrowings 892 1.0 895 0.9 3,742 3.9 3,740 3.9 3,739 3.9 (3) (2,847) Subordinated debt 1,055 1.1 1,058 1.1 973 1.0 993 1.0 992 1.0 (3) 63 Other borrowings 81 0.1 84 0.1 86 0.1 88 0.1 91 0.1 (3) (10) Total deposits and borrowed funds $ 93,788 100.0 % $ 94,889 100.0 % $ 96,812 100.0 % $ 96,451 100.0 % $ 95,858 100.0 % $ (1,101) $ (2,070) 29
$(94) $(71) $(77) $(49) $42 Provision (benefit) for credit losses 2Q21 3Q21 4Q21 1Q22 2Q22 $(100) $(50) $0 $50 $100 ACL and Credit Quality Trends ($ in millions) Net charge-offs (NCO) & NCO ratio Provision (benefit) for credit losses $26 $7 $7 $15 $22 0.16% 0.04% 0.04% 0.09% 0.13% NCO $ NCO ratio 2Q21 3Q21 4Q21 1Q22 2Q22 $0 $5 $10 $15 $20 $25 $30 $736 $569 $518 $538 $513 1.11% 0.86% 0.79% 0.82% 0.76% Nonaccrual loans Nonaccrual loans to total loans 2Q21 3Q21 4Q21 1Q22 2Q22 $0 $100 $200 $300 $400 $500 $600 $700 $800 Nonaccrual loans / total loans & leases HFI ACL & ACL ratio $1,040 $974 $891 $848 $850 1.57% 1.48% 1.37% 1.29% 1.26% ACL ACL ratio 2Q21 3Q21 4Q21 1Q22 2Q22 $0 $200 $400 $600 $800 $1,000 $1,200 Note – The financial data and/or ratios provided on this page are presented as if legacy BancShares and legacy CIT were combined for the historical periods. (1) - Excludes $513 million of Day 2 provision expenses. (1) 30
31 Allowance for credit losses (ACL) ($ in millions) Highlights 2Q22 vs 1Q22 • Total ACL increased $2 million compared to the linked quarter. • We saw declines in the ACL from improved credit quality as well as a change in portfolio mix due to loans moving out of portfolios with higher reserve rates. • Declines in the ACL were offset by portfolio growth and deterioration in the CECL macroeconomic forecast (GDP, CRE Index, HPI, and interest rates). • The ACL provided 9.6x times coverage of annualized quarterly net charge- offs. Note – the financial data and/or ratios provided on this slide are presented as if legacy BancShares and legacy CIT were combined for the historical periods. $848 $(22) $(19) $(17) $26 $34 $850 1Q22 Net charge-offs Credit quality Portfolio mix Economic scenario Loan growth 2Q22 ACL / Net charge-offs 9.9x 35.3x 32.6x 14.0x 9.6x ACL / NCO ratio 2Q21 3Q21 4Q21 1Q22 2Q22 1Q22 to 2Q22
7.67% 7.68% 7.59% 9.55% 9.85% Tier 1 Leverage Ratio 2Q21 3Q21 4Q21 1Q22 2Q22 Risk-based capital ratios Capital ratio rollforward Tier 1 Leverage ratio Tangible book value per share Capital Risk-Based Capital Tier 1 LeverageTotal Tier 1 CET1 December 31, 2021 14.35% 12.47% 11.50% 7.59% CIT acquisition - net (0.04)% (0.26)% (0.36)% 1.50% Pro forma combined January 3, 2022 14.31% 12.21% 11.14% 9.09% Net income 0.57% 0.57% 0.57% 0.44% Common dividends (0.02)% (0.02)% (0.02)% (0.02)% Preferred dividends (0.03)% (0.03)% (0.03)% (0.03)% Change in risk-weighted/average assets (0.40)% (0.34)% (0.32)% 0.29% SBA-PPP Change in Assets 0.00% 0.00% 0.00% 0.07% Other 0.03% (0.02)% 0.00% 0.01% June 30, 2022 14.46% 12.37% 11.34% 9.85% Change since December 31, 2021 0.11% (0.10)% (0.16)% 2.26% $410.74 $169.52 $29.31 ($0.94) ($29.70) $578.92 4Q21 CIT acquisition Retained earnings Common dividends AOCI adjustments 2Q22 Note – The historical information provided on this page is representative of legacy BancShares and does not include legacy CIT results. Capital ratios are preliminary ending completion of quarterly regulatory filings. 11.14% 11.34% 11.50% 11.34% 11.34% 12.13% 12.32% 12.47% 12.39% 12.37% 14.15% 14.30% 14.35% 14.47% 14.46% CET1 Tier 1 Total 2Q21 3Q21 4Q21 1Q22 2Q22 32
Financial Outlook Section IV
Metric 2Q22 - adjusted baseline 3Q22 FY21 - adjusted baseline FY22 Loans $67.7 billion Mid-single digit % growth $65.2 billion Mid- to high-single digit % growth Deposits $89.3 billion Slightly negative % decline $90.8 billion Negative low to mid- single digit % decline Interest rates Expectation of 125 bps increase in FFR. Ending rate of 2.75% - 3.00% FFR to increase to 3.25% - 3.50% as of 12/31/22 Net charge-off ratio (annualized/annual) 13 bps 15 - 25 bps 9 bps 12 - 22 bps Net interest income $700 million High-single digit % growth $2.4 billion High teens % growth Noninterest income (1) $283 million Down mid- to high-single % on NSF/OD change, seasonal factoring declines $1.0 billion Upper-single digit % growth Noninterest expense (2) $566 million Flat to slightly positive % growth $2.2 billion Low-single digit % growth Effective tax rate 24.6% (3) 24% - 25% (3) 23.9% (4) 24% - 25% (3) Key Earnings Estimate Assumptions (1) Adjusted noninterest income includes net rental income on operating lease assets (net of depreciation and maintenance) and excludes fair value adjustments on marketable equity securities, realized gains/losses on sales of AFS securities, realized gains/losses on sales of leasing equipment and legacy consumer loans, realized gains/losses on extinguishment of debt and acquisition accounting gains. (2) Adjusted noninterest expense excludes depreciation and maintenance on operating lease assets, merger-related expenses and amortization of intangibles. (3) Estimated annual effective tax rate is 24.6%, excluding discrete items. (4) The FY21 effective tax rate is a blended rate between legacy CIT and BancShares using prior period reported numbers. 34
Appendix Section V
2Q22 1Q22 2Q21 Reported Reported FCB GAAP CIT GAAP FCB/CIT Combined ASSETS Cash and due from banks $ 583 $ 523 $ 395 $ 147 $ 542 Interest-earning deposits at banks 6,476 9,285 7,871 5,135 13,006 Securities purchased under agreements to resell — — — 150 150 Investment securities 19,136 19,469 10,895 5,084 15,979 Assets held for sale 38 83 108 51 159 Loans and leases 67,735 65,524 32,690 33,711 66,401 Allowance for credit losses (850) (848) (189) (851) (1,040) Loans and leases, net of allowance for credit losses 66,885 64,676 32,501 32,860 65,361 Operating lease equipment, net 7,971 7,972 — 7,782 7,782 Premises and equipment, net 1,415 1,431 1,238 185 1,423 Bank-owned life insurance 1,334 1,326 115 1,186 1,301 Goodwill 346 346 350 — 350 Other intangible assets 150 156 25 118 143 Other assets 3,339 3,330 1,677 2,006 3,683 Total assets $ 107,673 $ 108,597 $ 55,175 $ 54,704 $ 109,879 LIABILITIES Deposits: Noninterest-bearing $ 26,645 $ 25,898 $ 20,974 $ 3,531 $ 24,505 Interest-bearing 62,684 65,699 27,436 37,755 65,191 Total deposits 89,329 91,597 48,410 41,286 89,696 Credit balances of factoring clients 1,070 1,150 — 1,531 1,531 Securities sold under customer repurchase agreements 646 616 693 — 693 Total borrowings 3,813 2,676 1,225 4,244 5,469 Other liabilities 2,173 1,988 370 1,607 1,977 Total liabilities 97,031 98,027 50,698 48,668 99,366 STOCKHOLDERS' EQUITY Preferred stock 881 881 340 525 865 Common stock 16 16 10 2 12 Additional paid in capital 5,345 5,344 — 3,751 3,751 Retained earnings 4,865 4,634 4,149 1,874 6,023 Accumulated other comprehensive loss (465) (305) (22) (116) (138) Total stockholders’ equity 10,642 10,570 4,477 6,036 10,513 Total liabilities and stockholders’ equity $ 107,673 $ 108,597 $ 55,175 $ 54,704 $ 109,879 Consolidated Balance Sheets (unaudited) ($ in millions) 36
2Q22 4Q21 3Q21 Reported FCB GAAP CIT GAAP FCB/CIT Combined FCB GAAP CIT GAAP FCB/CIT Combined ASSETS Cash and due from banks $ 583 $ 338 $ 141 $ 479 $ 337 $ 170 $ 507 Interest-earning deposits at banks 6,476 9,115 2,874 11,989 9,875 4,429 14,304 Securities purchased under agreements to resell — — — — — 100 100 Investment securities 19,136 13,110 6,597 19,707 10,875 5,563 16,438 Assets held for sale 38 99 53 152 98 96 194 Loans and leases 67,735 32,372 32,839 65,211 32,516 33,461 65,977 Allowance for credit losses (850) (178) (713) (891) (183) (791) (974) Loans and leases, net of allowance for credit losses 66,885 32,194 32,126 64,320 32,333 32,670 65,003 Operating lease equipment, net 7,971 — 8,024 8,024 — 7,937 7,937 Premises and equipment, net 1,415 1,233 169 1,402 1,231 176 1,407 Bank-owned life insurance 1,334 116 1,202 1,318 116 1,193 1,309 Goodwill 346 346 — 346 350 — 350 Other intangible assets 150 19 102 121 22 110 132 Other assets 3,339 1,739 1,952 3,691 1,665 1,976 3,641 Total assets $ 107,673 $ 58,309 $ 53,240 $ 111,549 $ 56,902 $ 54,420 $ 111,322 LIABILITIES Deposits: Noninterest-bearing $ 26,645 $ 21,405 $ 3,284 $ 24,689 $ 21,514 $ 3,398 $ 24,912 Interest-bearing 62,684 30,001 36,087 66,088 28,551 36,857 65,408 Total deposits 89,329 51,406 39,371 90,777 50,065 40,255 90,320 Credit balances of factoring clients 1,070 — 1,533 1,533 — 1,557 1,557 Securities sold under customer repurchase agreements 646 589 — 589 664 — 664 Total borrowings 3,813 1,195 4,251 5,446 1,219 4,248 5,467 Other liabilities 2,173 381 1,782 2,163 372 2,185 2,557 Total liabilities 97,031 53,571 46,937 100,508 52,320 48,245 100,565 STOCKHOLDERS' EQUITY Preferred stock 881 340 525 865 340 525 865 Common stock 16 10 2 12 10 2 12 Additional paid in capital 5,345 — 3,760 3,760 — 3,758 3,758 Retained earnings 4,865 4,378 2,180 6,558 4,264 2,011 6,275 Accumulated other comprehensive (loss) income (465) 10 (164) (154) (32) (121) (153) Total stockholders’ equity 10,642 4,738 6,303 11,041 4,582 6,175 10,757 Total liabilities and stockholders’ equity $ 107,673 $ 58,309 $ 53,240 $ 111,549 $ 56,902 $ 54,420 $ 111,322 Consolidated Balance Sheets (unaudited) ($ in millions) 37
2Q22 1Q22 2Q21 Reported Reported FCB GAAP CIT GAAP FCB/CIT INTEREST INCOME Interest and fees on loans $ 655 $ 621 $ 324 $ 356 $ 680 Interest on investment securities 89 83 36 15 51 Interest on deposits at banks 13 6 2 — 2 Total interest income 757 710 362 371 733 INTEREST EXPENSE Deposits 42 39 8 51 59 Borrowings 15 22 8 54 62 Total interest expense 57 61 16 105 121 Net interest income 700 649 346 266 612 Provision (benefit) for credit losses 42 464 (20) (74) (94) Net interest income after provision 658 185 366 340 706 NONINTEREST INCOME Rental income on operating leases 213 208 — 188 188 Fee income and other service charges 39 35 10 29 39 Wealth management services 37 35 32 — 32 Service charges on deposit accounts 28 28 21 2 23 Factoring commissions 27 27 — 27 27 Cardholder services, net 26 25 22 1 23 Merchant services, net 9 10 8 1 9 Insurance commissions 11 12 4 6 10 Bank-owned life insurance 9 8 — 9 9 Other 25 462 37 87 124 Total noninterest income 424 850 134 350 484 NONINTEREST EXPENSE Depreciation on operating lease equipment 89 81 — 83 83 Maintenance and other operating lease expenses 47 43 — 54 54 Salaries and benefits 341 352 188 142 330 Net occupancy expense 48 49 28 18 46 Equipment expense 54 52 29 22 51 Professional fees 15 16 4 15 19 Third-party processing fees 26 24 14 8 22 FDIC insurance expense 9 12 4 9 13 Marketing 9 8 2 6 8 Merger-related expenses 34 135 6 — 6 Intangible asset amortization 6 6 3 8 11 Other noninterest expense 67 32 22 26 48 Total noninterest expense 745 810 300 391 691 Income before income taxes 337 225 200 299 499 Income tax expense (benefit) 82 (46) 46 72 118 Net income $ 255 $ 271 $ 154 $ 227 $ 381 Preferred stock dividends $ 17 $ 7 $ 5 $ 12 $ 17 Net income available to common stockholders $ 238 $ 264 $ 149 $ 215 $ 364 Consolidated Income Statements – (unaudited) ($ in millions) 38
Consolidated Income Statements – (unaudited) ($ in millions) 2Q22 4Q21 3Q21 Reported FCB GAAP CIT GAAP FCB/CIT FCB GAAP CIT GAAP FCB/CIT INTEREST INCOME Interest and fees on loans $ 655 $ 328 $ 340 $ 668 $ 320 $ 342 $ 662 Interest on investment securities 89 39 21 60 40 14 54 Interest on deposits at banks 13 4 1 5 3 3 6 Total interest income 757 371 362 733 363 359 722 INTEREST EXPENSE Deposits 42 8 45 53 8 48 56 Borrowings 15 6 55 61 8 54 62 Total interest expense 57 14 100 114 16 102 118 Net interest income 700 357 262 619 347 257 604 Provision (benefit) for credit losses 42 (5) (72) (77) (1) (70) (71) Net interest income after provision 658 362 334 696 348 327 675 NONINTEREST INCOME Rental income on operating leases 213 — 204 204 — 186 186 Fee income and other service charges 39 11 28 39 10 27 37 Wealth management services 37 33 — 33 32 — 32 Service charges on deposit accounts 28 27 — 27 25 1 26 Factoring commissions 27 — 33 33 — 28 28 Cardholder services, net 26 22 (1) 21 23 — 23 Merchant services, net 9 7 — 7 9 (1) 8 Insurance commissions 11 4 6 10 4 6 10 Bank-owned life insurance 9 1 8 9 1 8 9 Other 25 11 70 81 18 54 72 Total noninterest income 424 116 348 464 122 309 431 NONINTEREST EXPENSE Depreciation on operating lease equipment 89 — 88 88 — 85 85 Maintenance and other operating lease expenses 47 — 52 52 — 51 51 Salaries and benefits 341 193 133 326 194 153 347 Net occupancy expense 48 30 18 48 29 17 46 Equipment expense 54 30 22 52 30 21 51 Professional fees 15 7 13 20 5 14 19 Third-party processing fees 26 16 7 23 16 7 23 FDIC insurance expense 9 4 7 11 3 9 12 Marketing 9 3 5 8 3 6 9 Merger-related expenses 34 9 3 12 7 — 7 Intangible asset amortization 6 3 8 11 3 8 11 Other noninterest expense 67 27 29 56 24 31 55 Total noninterest expense 745 322 385 707 314 402 716 Income before income taxes 337 156 297 453 156 234 390 Income tax expense 82 30 83 113 34 56 90 Net income $ 255 $ 126 $ 214 $ 340 $ 122 $ 178 $ 300 Preferred stock dividends $ 17 $ 5 $ 12 $ 17 $ 5 $ 3 $ 8 Net income available to common stockholders $ 238 $ 121 $ 202 $ 323 $ 117 $ 175 $ 292 39
Consolidated Income Statements – (unaudited) ($ in millions) YTD 22 YTD 21 Reported FCB GAAP CIT GAAP FCB/CIT INTEREST INCOME Interest and fees on loans $ 1,276 $ 647 $ 720 $ 1,367 Interest on investment securities 172 66 36 102 Interest on deposits at banks 19 4 2 6 Total interest income 1,467 717 758 1,475 INTEREST EXPENSE Deposits 81 17 113 130 Borrowings 37 14 113 127 Total interest expense 118 31 226 257 Net interest income 1,349 686 686 1,218 Provision (benefit) for credit losses 506 (31) (193) (224) Net interest income after provision 843 717 725 1,442 NONINTEREST INCOME Rental income on operating leases, net 421 — 383 383 Fee income and other service charges 74 21 52 73 Wealth management services 72 64 — 64 Service charges on deposit accounts 56 43 3 46 Factoring commissions 54 — 51 51 Cardholder services, net 51 42 1 43 Merchant services, net 19 17 1 18 Insurance commissions 23 8 11 19 Bank-owned life insurance 17 1 17 18 Other 487 75 256 331 Total noninterest income 1,274 271 775 1,046 NONINTEREST EXPENSE Depreciation on operating lease equipment 170 — 168 168 Maintenance and other operating lease expenses 90 — 106 106 Salaries and benefits 693 372 298 670 Net occupancy expense 97 58 36 94 Equipment expense 106 59 45 104 Professional fees 31 8 22 30 Third-party processing fees 50 28 15 43 FDIC insurance expense 21 7 19 26 Marketing 17 4 9 13 Merger-related expenses 169 13 5 18 Intangible asset amortization 12 6 17 23 Other noninterest expense 99 42 62 104 Total noninterest expense 1,555 597 802 1,399 Income before income taxes 562 391 698 1,089 Income tax expense 36 90 168 258 Net income $ 526 $ 301 $ 530 $ 831 Preferred stock dividends $ 24 $ 9 $ 15 $ 24 Net income available to common stockholders $ 502 $ 292 $ 515 $ 807 40
Noninterest income ($ in millions) 2Q22 Change vs Quarter-to-date 1Q22 2Q21 2Q22 1Q22 4Q21 3Q21 2Q21 $ % $ % Rental income on operating leases $ 213 $ 208 $ 204 $ 186 $ 188 $ 5 2.4 % $ 25 13.3 % Fee income and other service charges 39 35 39 37 39 4 11.4 % — — % Wealth management services 37 35 33 32 32 2 5.7 % 5 15.6 % Service charges on deposit accounts 28 28 27 26 23 — — % 5 21.7 % Factoring commissions 27 27 33 28 27 — — % — — % Cardholder services, net 26 25 21 23 23 1 4.0 % 3 13.0 % Merchant services, net 9 10 7 8 9 (1) (10.0) % — — % Insurance commissions 11 12 10 10 10 (1) (8.3) % 1 10.0 % Realized gain on sales of investment securities available for sale, net — — — 14 19 — — % (19) (100.0) % Fair value adjustment on marketable equity securities, net (6) 3 7 3 12 (9) (300.0) % (18) (150.0) % Bank-owned life insurance 9 8 9 9 9 1 12.5 % — — % Gain on sales of leasing equipment, net 5 6 26 21 29 (1) (16.7) % (24) (82.8) % Gain on acquisition — 431 — — — (431) (100.0) % — — % Gain on extinguishment of debt — 6 — — — (6) (100.0) % — — % Other noninterest income 26 16 48 34 64 10 62.5 % (38) (59.4) % Total noninterest income - GAAP $ 424 $ 850 $ 464 $ 431 $ 484 $ (426) (50.1) % $ (60) (12.4) % Depreciation on operating lease equipment $ (89) $ (81) $ (88) $ (85) $ (83) $ (8) 9.9 % $ (6) 7.2 % Maintenance and other operating lease expense (47) (43) (52) (51) (54) (4.0) 9.3 % 7.0 (13.0) % Realized gain on sales of investment securities available for sale, net — — — (14) (19) — — % 19.0 (100.0) % Fair value adjustment on marketable equity securities, net 6 (3) (7) (3) (12) Gain on sales of leasing equipment, net (5) (6) (26) (21) (29) 1.0 (16.7) % 24.0 (82.8) % Gain on acquisition — (431) — — — 431.0 (100.0) % — — % Gain on extinguishment of debt — (6) — — — 6.0 (100.0) % — — % Other noninterest income (6) — (26) (16) (41) (6.0) — % 35.0 (85.4) % Total notable items $ (141) $ (570) $ (199) $ (190) $ (238) (711.0) 124.7 % 97.0 (40.8) % Rental income on operating leases, net $ 77 $ 84 $ 64 $ 50 $ 51 $ (7) (8.3) % $ 26 51.0 % Fee income and other service charges 39 35 39 37 39 4 11.4 % — — % Wealth management services 37 35 33 32 32 2 5.7 % 5 15.6 % Service charges on deposit accounts 28 28 27 26 23 — — % 5 21.7 % Factoring commissions 27 27 33 28 27 — — % — — % Cardholder services, net 26 25 21 23 23 1 4.0 % 3 13.0 % Merchant services, net 9 10 7 8 9 (1) (10.0) % — — % Insurance commissions 11 12 10 10 10 (1) (8.3) % 1 10.0 % Bank-owned life insurance 9 8 9 9 9 1 12.5 % — — % Other noninterest income 20 16 22 18 23 4 25.0 % (3) (13.0) % Total noninterest income - adjusted $ 283 $ 280 $ 265 $ 241 $ 246 $ 3 1.1 % $ 37 15.0 % 41 Note – The adjusted rental income on operating leases is net of depreciation on operating lease equipment and maintenance and other operating lease expenses. In 2021, other expense includes a reserve release related to the prior sale of certain mortgage loans and the establishment of a litigation reserve.
Noninterest expense ($ in millions) 2Q22 Change vs Quarter-to-date 1Q22 2Q21 2Q22 1Q22 4Q21 3Q21 2Q21 $ % $ % Depreciation on operating lease equipment $ 89 $ 81 $ 88 $ 85 $ 83 $ 8 9.9 % $ 6 7.2 % Maintenance and other operating lease expense 47 43 52 51 54 4 9.3 % (7) (13.0) % Salaries and benefits 341 352 326 347 330 (11) (3.1) % 11 3.3 % Net occupancy expense 48 49 48 46 46 (1) (2.0) % 2 4.3 % Equipment expense 54 52 52 51 51 2 3.8 % 3 5.9 % Professional fees 15 16 20 19 19 (1) (6.3) % (4) (21.1) % Third-party processing fees 26 24 23 23 22 2 8.3 % 4 18.2 % FDIC insurance expense 9 12 11 12 13 (3) (25.0) % (4) (30.8) % Marketing 9 8 8 9 8 1 12.5 % 1 12.5 % Merger-related expenses 34 135 12 7 6 (101) (74.8) % 28 466.7 % Intangible asset amortization 6 6 11 11 11 — — % (5) (45.5) % Other noninterest expense 67 32 56 55 48 35 109.4 % 19 39.6 % Total noninterest expense - GAAP $ 745 $ 810 $ 707 $ 716 $ 691 $ (65) (8.0) % $ 54 7.8 % Depreciation on operating lease equipment $ (89) $ (81) $ (88) $ (85) $ (83) $ (8) 9.9 % $ (6) 7.2 % Maintenance and other operating lease expense (47) (43) (52) (51) (54) (4) 9.3 % 7 (13.0) % Salaries and benefits — — 6 — 8 — — % (8) (100.0) % Merger-related expenses (34) (135) (12) (7) (6) 101 (74.8) % (28) 466.7 % Intangible asset amortization (6) (6) (11) (11) (11) — — % 5 (45.5) % Other noninterest expense (3) 27 (1) 1 10 (30) (111.1) % (13) (130.0) % Total notable items $ (179) $ (238) $ (158) $ (153) $ (136) $ 59 (24.8) % $ (43) 31.6 % Salaries and benefits $ 341 $ 352 $ 332 $ 347 $ 338 $ (11) (3.1) % $ 3 0.9 % Net occupancy expense 48 49 48 46 46 (1) (2.0) % 2 4.3 % Equipment expense 54 52 52 51 51 2 3.8 % 3 5.9 % Professional fees 15 16 20 19 19 (1) (6.3) % (4) (21.1) % Third-party processing fees 26 24 23 23 22 2 8.3 % 4 18.2 % FDIC insurance expense 9 12 11 12 13 (3) (25.0) % (4) (30.8) % Marketing 9 8 8 9 8 1 12.5 % 1 12.5 % Other noninterest expense 64 59 55 56 58 5 8.5 % 6 10.3 % Total nontinerest expense - adjusted $ 566 $ 572 $ 549 $ 563 $ 555 $ (6) (1.0) % $ 11 2.0 % 42
43 Debt Securities Overview (1) (1) Includes the debt securities portfolio; excludes marketable equity securities. (2) Carrying value represents fair value for AFS and amortized cost for HTM portfolios. (3) Yield represents actual accounting yield recognized during the quarter. 2Q22(1) ($ in millions) Carrying Value(2) % of Portfolio Yield(3) Duration (Years) AFS Portfolio U.S. Treasury securities $ 1,903 10 % 1.01 % 2.6 Government agency securities 190 1 3.47 3.1 Commerical mortgage-backed securities 1,527 8 2.65 4.8 Residential mortgage-backed securities 5,019 26 1.75 4.5 Corporate bonds 571 3 5.37 3.6 Total AFS portfolio $ 9,210 48 % 1.99 % 4.1 HTM portfolio U.S. Treasury $ 472 3 % 1.39 % 4.8 Government agency 1,544 8 1.48 5.0 Commerical mortgage-backed securities 2,886 15 1.75 3.8 Residential mortgage-backed securities 4,633 24 1.76 6.0 Other investments 297 2 1.54 6.5 Total HTM portfolio $ 9,832 52 % 1.69 % 5.1 Grand total $ 19,042 100 % 1.85 % 4.6
Change vs. 2Q22 1Q22 2Q21 1Q22 2Q21 Avg. Balance Income / Expense Yield / Rate Avg. Balance Income / Expense Yield / Rate 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 % $ 1,154 $ 34 0.13 % $ (1,095) $ (25) (0.07) % Investment securities 19,185 89 1.85 19,492 83 1.71 15,471 51 1.28 (307) 6 0.14 3,714 38 0.57 % Interest-earning deposits at banks 7,630 13 0.72 11,476 6 0.19 13,402 2 0.11 (3,846) 7 0.53 (5,772) 11 0.61 % Total interest-earning assets 92,113 757 3.28 95,112 710 2.99 95,266 733 3.07 (2,999) 47 0.29 (3,153) 24 0.21 Interest-bearing deposits 64,070 42 0.26 66,258 39 0.24 65,287 59 0.37 (2,188) 3 0.02 (1,217) (17) (0.11) % Securities sold under customer repurchase agreements 627 — 0.16 600 — 0.16 677 1 0.21 (50) — — (50) (1) (0.05) % Borrowings 2,419 15 2.43 4,506 22 1.95 6,060 61 4.03 (2,087) (7) 0.48 (3,641) (46) (1.60) % Total interest-bearing liabilities $ 67,116 $ 57 0.34 % $ 71,364 $ 61 0.35 % $ 72,024 $ 121 0.67 % $ (4,248) $ (4) -0.01 % $ 71,364 $ (64) -0.33 % Net interest income $ 700 $ 649 $ 612 $ 51 $ 88 Net interest spread 2.94 % 2.64 % 2.39 % 0.30 % 0.55 % Net interest margin 3.04 % 2.73 % 2.56 % 0.31 % 0.48 % Note – The financial data and/or ratios provided on this page are presented as if legacy BancShares and legacy CIT were combined for the historical periods. Average Balances and Yields ($ in millions) Change vs. YTD22 YTD21 YTD21 Avg. Balance Income / Expense Yield / Rate 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 % $ (2,308) $ (91) (0.13) % Investment securities 19,338 172 1.78 15,554 102 1.30 3,784 70 0.48 Interest-earning deposits at banks 9,542 19 0.40 11,962 6 0.11 (2,420) 13 0.29 Total interest-earning assets 93,604 1,467 3.14 94,548 1,475 3.12 (944) (8) 0.02 Interest-bearing deposits 65,158 81 0.25 65,305 130 0.40 (147) (49) (0.15) Securities sold under customer repuchase agreements 614 — 0.16 659 1 0.21 (45) (1) (0.05) Borrowings 3,457 37 2.12 6,373 126 3.94 (2,916) (89) (1.82) Total interest-bearing liabilities $ 69,229 $ 118 0.34 % $ 72,337 $ 257 0.71 % $ (3,108) $ (139) (0.37) % Net interest income $ 1,349 $ 1,218 $ 131 Net interest spread 2.80 % 2.41 % 0.39 % Net interest margin 2.89 % 2.58 % 0.31 % 44
45 Commercial Banking Segment Highlights • The Commercial Bank had a strong quarter of loan growth, as robust growth in Commercial Finance (22% annualized) and Business Capital (20% annualized) offset by a decline in Real Estate Finance. • Within Commercial Finance, growth was concentrated in Middle Market Banking, as well as increases in our Industry Verticals including Tech, Media & Telecom, Corporate Banking, Asset Based Lending, Energy and Healthcare. • Business Capital continues to have robust loan growth driven by strong construction and infrastructure spending. Originations within the Technology and Office Products market should continue at their current pace despite headwinds in lender finance. On the quarter, Business Capital loans outstanding increased by $234 million, or 20.2% annualized growth over the prior year quarter. • Commercial Services (factoring) had a strong quarter with factoring volume totaling $6.4 billion which was $331 million higher than the prior year quarter. • Credit quality is not showing any significant signs of stress, and while net charge-offs increased on the quarter, to 37 bps (from 22 bps the prior quarter), they were in line with the prior year quarter of 36 bps. Note – the Commercial Bank segment includes Commercial Finance, Real Estate Finance and Business Capital. The totals may not foot due to rounding. (Actual balances; $ in millions) 2Q22 1Q22 Income Statement Net interest income $ 203 $ 207 Noninterest income 129 112 Net revenue 332 319 Noninterest expense 179 191 Pre-provision net revenue 153 128 Provision (benefit) for credit losses 35 (35) Segment income before taxes 118 163 Income taxes 24 41 Segment net income $ 94 $ 122 Balance Sheet Loans and leases $ 27,220 $ 26,672 Deposits 4,449 4,687 Factoring volume 6,387 6,443
46 General Banking Segment Highlights • The General Bank had strong loan growth on both a quarterly and year-to-date basis, with the primary drivers being growth in our branch network and residential mortgages. • While noninterest bearing deposit growth has continued to be strong, we experienced a decline in total deposits due to high-cost deposit runoff in the Direct Bank and Legacy OneWest branches. • We continue to place an emphasis on strengthening digital capabilities and refining our branch network to ensure sales strategies align with client preferences regarding channel selection and declines in transactional activity. Note – the General Bank segment includes Branch Network & Wealth, Mortgage, Consumer Indirect, Direct Bank, Community Association Banking and Other General Banking. The totals may not foot due to rounding. (Actual balances; $ in millions) 2Q22 1Q22 Income Statement Net interest income $ 467 $ 437 Noninterest income 126 123 Net revenue 593 560 Noninterest expense 390 409 Pre-provision net revenue 203 151 Provision (benefit) for credit losses 7 (16) Segment income before taxes 196 167 Income taxes 40 40 Segment net income $ 156 $ 127 Balance Sheet Loans and leases $ 40,444 $ 38,778 Deposits 83,535 85,469 Other Key Metrics Number of branches 585 603 Wealth management assets under management $ 31,700 $ 32,200 Card volume 3,988 3,582 Merchant volume 1,757 1,650
47 Rail Segment Highlights • Fleet utilization increased to 96.2% in 2Q22, which was up 0.72% compared to the linked quarter, and up 6.20% from the prior year quarter and is at the highest level since 2Q19. • Net revenue on operating leases declined by $9 million, due primarily to increased depreciation and maintenance expense. • In 2Q22, the renewal re-pricing rate was 114% of the prior quarter driven by broad-based strength across the portfolio including plastics, mill gondolas, covered hoppers and boxcars. • Short-term outlook continues to be positive overall, but is mixed across commodity markets. Note – the General Bank segment includes Branch Network & Wealth, Mortgage, Consumer Indirect, Direct Bank, Community Association Banking and Other General Banking. The totals may not foot due to rounding. (Actual balances ; $ in millions) 2Q22 1Q22 Income Statement Rental income on operating leases $ 160 $ 159 Depreciation on operating lease equipment 47 41 Maintenance and other operating lease expenses 47 43 Net revenue on operating leases 66 75 Interest expense, net 18 19 Noninterest income — 3 Noninterest expense 16 16 Segment income before taxes 32 43 Income taxes 8 11 Segment net income $ 24 $ 32 Balance Sheet Operating lease equipment, net $ 7,247 $ 7,251 Other Key Metrics Number of rail cars 119,194 121,800 Utilization 96.2 % 95.5 % Average age of rail cars 14 years 14 years Renewal rate to current rate 114 % 108 %
48 Preliminary purchase accounting marks ($ in millions) June 30, 2022 March 31, 2022 December 31, 2021 Loans and leases (1) Beginning balance - unamortized fair value $ (145) $ (40) $ (65) Additions - Merger with CIT Group Inc. — (388) — PCD “gross up” — 284 — Accretion (1) (1) 25 Ending balance $ (146) $ (145) $ (40) Core deposits and other intangibles Beginning balance $ 156 $ 19 $ 31 Additions - Merger with CIT Group Inc. — 143 — Amortization (6) (6) (12) Ending balance $ 150 $ 156 $ 19 Deposits (2) Beginning balance - unamortized fair value $ (57) $ (2) $ (4) Additions - Merger with CIT Group Inc. — (66) — Amortization 8 11 2 Ending balance $ (49) $ (57) $ (2) Borrowings (2) Beginning balance - unamortized fair value $ (107) $ 2 $ 4 Additions - Merger with CIT Group Inc. — (258) — Amortization 7 21 (2) Adjustments (3) — 128 — Ending balance $ (100) $ (107) $ 2 Note – balances above include the impact of the merger with CIT as well as other acquisitions prior to December 31, 2021. The summary only includes select information and is not intended to represent all purchase accounting adjustments. While BancShares believes that the information provided a reasonable basis for estimating fair value, BancShares expects to finalize its analysis of the acquired assets and assumed liabilities within one year of the merger date. (1) Preliminary purchase accounting marks on loans and leases is comprised of credit, interest and liquidity components, and are generally recognized using the level-yield or straight-line method over the remaining life of the receivable or in full in the event of prepayment. (2) Preliminary purchase accounting marks on deposits and borrowings represent interest rate marks and are recognized using the level-yield method over the remaining term of the liability. (3) On February 24, 2022, approximately $3.0 billion in legacy CIT debt was redeemed.
49 Rating agency focus Credit Ratings S&P Moody’s Fitch First Citizens BancShares, Inc. BBB Baa2 BBB First-Citizens Bank & Trust Company BBB+ Baa1 BBB Outlook Negative Stable Stable • Solid business profile, strong franchise and diversified business model. • Historically conservative risk appetite with low credit losses over time. • Solid balance sheet, including healthy liquidity and capitalization. • BancShares’ ownership structure allows the company to prioritize longer-term strategic objectives over short-term performance. • Successful integration of CIT merger remains key focus. Successful execution will be key to ensuring funding, risk and profitability profiles remain strong. Note – Credit ratings were last updated on the following dates: S&P - 3/25/2022, Moody’s - 1/4/2022, and Fitch - 3/29/2022