First Citizens BancShares Projects $6 Billion to $8 Billion in Q3 Note Prepayments

First Citizens BancShares projects $6 billion to $8 billion in third-quarter prepayments on a note owed to the Federal Deposit Insurance Corporation (FDIC), with liquidity tied to its branch acquisition expected to drive much of the paydown.

The bank is scheduled to release third-quarter results before U.S. markets open Friday, Oct. 23. Its investor webcast is set for 9 a.m. ET (13:00 UTC).

First Citizens’ third-quarter outlook includes net interest income of $1.63 billion to $1.71 billion, loans and leases of $152 billion to $155 billion, and deposits of $179 billion to $182 billion. In the second quarter, which ended June 30, the bank had $151.03 billion in loans and leases, $173.43 billion in deposits and $1.656 billion in net interest income. Its net interest margin for that quarter was 3.10%.

The outlook also calls for an annualized net charge-off ratio of 30 to 40 basis points. Adjusted noninterest income is projected at $520 million to $560 million, while adjusted noninterest expense is forecast at $1.33 billion to $1.37 billion. The adjusted figures are non-GAAP measures.

The expected liquidity is largely tied to First Citizens’ acquisition of 138 BMO Bank N.A. branches. The acquisition took effect Sept. 4 and brought approximately $5 billion in deposits and $650 million in loans. First Citizens prepaid $1 billion on the Purchase Money Note in July.

First Citizens issued the note to the FDIC as part of its 2023 acquisition of Silicon Valley Bridge Bank. The note had an original principal of $36.07 billion and a carrying value of $28.42 billion on June 30, 2026. It matures in March 2028.