- Key takeaway: Raleigh, North Carolina-based First Citizens BancShares paid $2.5 billion on an FDIC purchase money note during the second quarter, plus another $1 billion in July.
- Expert quote: "We have good capacity at the Federal Home Loan Banks, so we might draw on that. We are planning on doing more long-term debt issuance, so that would be a source, and then broker deposits if needed." —Craig Nix, chief financial officer at First Citizens
- Supporting data: First Citizens reported second-quarter net interest income of $1.66 billion, topping analysts' expectations, as higher income from loans and investment securities offset higher deposit costs.
First Citizens BancShares said Thursday it has repaid $8.5 billion to the Federal Deposit Insurance Corp. to reduce debt tied to its acquisition of the failed Silicon Valley Bank.
During the company's earnings call, executives said the Raleigh, North Carolina-based lender paid $2.5 billion on the FDIC purchase money note during the second quarter and another $1 billion in July. The company plans to make additional payments of $500 million to $1 billion a month.
The debt stems from First Citizens' acquisition of
First Citizens executives reiterated their confidence Thursday that the FDIC note can be repaid ahead of schedule.
Craig Nix, chief financial officer at First Citizens, said the company has funded repayments so far with excess liquidity on its balance sheet but has
"We have good capacity at the Federal Home Loan banks, so we might draw on that," he said. "We are planning on doing more long-term debt issuance, so that would be a source, and then broker deposits if needed."
During the second quarter, First Citizens reported net interest income of $1.66 billion, topping analysts' expectations, as higher income from loans and investment securities offset higher deposit costs. Net income in the second quarter was $672 million, up 17% from the same period last year.
Read more:
Four factors that drove banks' blowout 2Q performance Banks face a dilemma: More loan growth or better margins? The top-performing 20 public banks with under $2B of assets in 2025 Will banks get in on the prediction market gold rush ?
Interest income from loans fell by $17 million from a year ago but rose by $47 million from the previous quarter, reflecting higher loan yields, larger average loan balances and a $7 million increase in acquisition-related accounting income.
First Citizens' loans and leases rose $9.8 billion year over year, or 6.9%, to $151 billion, driven by growth in its commercial banking segment, particularly global fund banking. The bank also highlighted strong growth in its technology and healthcare segments.
"Global fund banking grew by $2.6 billion thanks to favorable financing cost, catch-up investments due to prior tariff pauses and a healthy rebound in secondary market valuation accelerating exit activity," said Nix.
Deposits at the firm increased by $13.49 billion year over year, or 8.4%, linked to growth in the direct bank, the firm's online banking platform.
Non-interest expenses grew by 3.3% year over year in the second quarter, up partly as a result of higher marketing costs and technology investments. Those increases were mostly offset by lower personnel costs, due to reduced incentive compensation and seasonal benefit changes.
First Citizens kept its 2026 guidance largely unchanged, projecting year-end loan balances of $153 billion to $157 billion, supported by continued client activity and the expected acquisition of 138 BMO branches.
First Citizens announced plans late last year to acquire the
The BMO branch-acquisition deal is expected to close in the third quarter. First Citizens anticipates that the transaction will add about $700 million to its loan portfolio.
"We project third-quarter deposits between $179 and $182 billion, driven by our BMO branch acquisition, adding approximately $5.3 billion in deposits," said Nix. "We expect this to be bolstered by growth in the direct bank and branch network."
