FIRST CITIZENS BANCSHARES INC / DE / Management report and analysis of the financial situation and operating results (form 10-Q)

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Management's discussion and analysis ("MD&A") of earnings and related financial
data are presented to assist in understanding the financial condition and
results of operations of First Citizens BancShares, Inc. and its subsidiaries
("BancShares"). This discussion and analysis should be read in conjunction with
the unaudited consolidated financial statements and related notes presented
within this Quarterly Report on Form 10-Q along with our financial statements
and related MD&A of financial condition and results of operations included in
our Annual Report on Form 10-K for the year ended December 31, 2020 ("2020
Annual Report"). Intercompany accounts and transactions have been eliminated.
Although certain amounts for prior years have been reclassified to conform to
statement presentations for 2021, the reclassifications had no effect on
shareholders' equity or net income as previously reported. Unless otherwise
noted, the terms "we," "us" and "BancShares" refer to the consolidated financial
position and consolidated results of operations for BancShares.
EXECUTIVE OVERVIEW
BancShares conducts its banking operations through its wholly-owned subsidiary
First-Citizens Bank & Trust Company ("FCB"), a state-chartered bank organized
under the laws of the state of North Carolina.
BancShares' earnings and cash flows are primarily derived from our commercial
and retail banking activities. We gather deposits from retail and commercial
customers and also secure funding through various non-deposit sources. We invest
the liquidity generated from these funding sources in interest-earning assets,
including loans and leases, investment securities and overnight investments. We
also invest in bank premises, hardware, software, furniture and equipment used
to conduct our commercial and retail banking business. We provide treasury
services products, cardholder and merchant services, wealth management services
and various other products and services typically offered by commercial banks.
The fees and service charges generated from these products and services are
primary sources of noninterest income which is an essential component of our
total revenue.
We are focused on expanding our position in legacy and target markets through
organic growth and strategic acquisitions. We believe our franchise is
positioned for continued growth as a result of our client centric banking
principles, disciplined lending standards, and our people.
Refer to our 2020 Annual Report for further discussion of our strategy.
RECENT ECONOMIC AND INDUSTRY DEVELOPMENTS
During the first quarter of 2020, a novel strain of coronavirus ("COVID-19")
spread throughout the world, causing significant disruptions to the domestic and
global economies. In response to the outbreak, governments imposed restrictions
resulting in business shutdowns, regional quarantines, disruptions of supply
chains, changes in consumer behavior and overall economic instability. Although
vaccines for COVID-19 have been made available to the general public in the
United States and many places around the world, vaccination rates vary and
effectiveness may decrease over time. We cannot predict how widely utilized the
vaccines and boosters will be or whether and for how long they will be effective
in preventing the spread of COVID-19 (including its variants).

Although we cannot predict when or if normal economic activity and business
operations will resume, we observed general declines in the level of economic
uncertainty and stabilization of macroeconomic forecasts during the first three
quarters of 2021. The US experienced an uptick in the number of new cases during
the third quarter of 2021. We are unable to predict whether these trends will
continue and how this will affect the overall economy at the current time.
However, we remain vigilant in our review and monitoring efforts around the
duration and severity of the COVID-19 pandemic (including any of its variants)
and its effects on the overall economy and our financial results.

During the third quarter of 2021, the Federal Reserve's Federal Open Market
Committee ("FOMC") maintained the federal funds rate at a target range of 0.00%
to 0.25%. The FOMC acknowledged the economy's accelerating recovery from the
COVID-19 pandemic, but maintained that the recovery is incomplete and economic
risks remain. The FOMC expects to maintain this target range, but rate hikes are
expected in late 2022 or early 2023. Further, the committee suggested that they
will begin tapering asset purchases, potentially as early as the fourth quarter
of 2021 if economic progress continues as expected.
In response to the COVID-19 pandemic, the Small Business Administration Paycheck
Protection Program ("SBA-PPP") was established through the Coronavirus Aid
Relief and Economic Security Act (the "CARES Act") and the Consolidated
Appropriations Act 2021 to direct aid via loans to small businesses impacted by
the COVID-19 pandemic.
We completed the first round of SBA-PPP funding in the second half 2020 and the
second round of funding during the second quarter of 2021. As of September 30,
2021, there were $1.1 billion SBA-PPP loans outstanding with remaining net
deferred fees of $39.4 million.
With respect to the first round of SBA-PPP, we began accepting and processing
applications for forgiveness during the third quarter of 2020. As of September
30, 2021, we have received approximately 98% of forgiveness decisions from the
SBA to date, representing over $3.1 billion in forgiveness payments.
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With respect to the second round of SBA-PPP, we began accepting and processing
applications for forgiveness during the third quarter of 2021. As of September
30, 2021, we have received approximately 14% of forgiveness decisions from the
SBA, representing over $175 million in forgiveness payments.

Table 1
SBA-PPP LOAN FORGIVENESS STATUS
(Dollars in thousands)
                                         Round 1                                Round 2
Status                      $ of Loans       % of Round Total      $ of Loans       % of Round Total
Total Funded               $ 3,199,897                100.0  %    $ 1,223,797                100.0  %
Payments Received            3,121,746                 97.6           175,660                 14.4
Total Remaining            $    78,151                  2.4  %    $ 1,048,137                 85.6  %



Through September 30, 2021, over 99% of all COVID-19-related loan extensions
have begun repayment. Delinquency trends among loans entering repayment are in
line with the remainder of the portfolio, and we have not seen significant
declines in overall credit quality.

SIGNIFICANT EVENTS IN 2021
On October 15, 2020, BancShares and CIT Group Inc., a Delaware corporation
("CIT"), entered into an Agreement and Plan of Merger (the "Merger Agreement")
by and among BancShares, FCB, FC Merger Subsidiary IX, Inc., a direct, wholly
owned subsidiary of FCB ("Merger Sub"), and CIT, the parent company of CIT Bank,
N.A., a national banking association ("CIT Bank"). Pursuant to the terms and
subject to the conditions set forth in the Merger Agreement, Merger Sub will
merge with and into CIT, with CIT as the surviving entity (the "First-Step
Merger"), and as soon as reasonably practicable following the effective time of
the First-Step Merger, CIT will merge with and into FCB, with FCB as the
surviving entity (together with the First-Step Merger, the "Mergers"). The
Merger Agreement further provides that immediately following the consummation of
the Mergers, CIT Bank will merge with and into FCB, with FCB as the surviving
bank (together with the Mergers, the "Transaction").
The Merger Agreement was unanimously approved by the Board of Directors of each
of BancShares and CIT. The Transaction has been approved by the shareholders of
both companies and has received regulatory approval from the North Carolina
Commissioner of Banks and the Federal Deposit Insurance Corporation ("FDIC").
On September 30, 2021, the parties entered into an amendment to the merger
agreement pursuant to which the parties mutually agreed to extend until March 1,
2022 the date after which either party may elect to terminate the merger
agreement if the merger has not yet been completed. Completion of the proposed
merger remains subject to approval from the Board of Governors of the Federal
Reserve System and both parties are committed to continuing to seek such
approval. The parties have responded to all questions issued by the Staff of the
Federal Reserve Board, and the Staff has informed us that they do not have
further questions at this time. The parties have been informed that the
application is presently at the Governor level, but the Board of Governors has
not provided a time frame for its decision on the application. Closing is
expected to occur as soon as practicable following receipt of such approval and
the satisfaction or waiver of other customary closing conditions.
Upon the terms and subject to the conditions set forth in the Merger Agreement,
at the effective time of the First-Step Merger (the "Effective Time"), each
share of CIT common stock, par value $0.01 per share, issued and outstanding
immediately prior to the Effective Time ("CIT Common Stock"), except for certain
shares of CIT Common Stock owned by CIT or BancShares, will be converted into
the right to receive 0.06200 shares of BancShares Class A common stock, par
value $1.00 per share. Holders of CIT Common Stock will receive cash in lieu of
fractional shares.
In addition, at the Effective Time, each share of Fixed-to-Floating Rate
Non-Cumulative Perpetual Preferred Stock, Series A, par value $0.01 per share,
of CIT and 5.625% Non-Cumulative Perpetual Preferred Stock, Series B, par value
$0.01 per share, of CIT issued and outstanding will automatically be converted
into the right to receive one share of a newly created series of preferred
stock, Series B, of BancShares and one share of a newly created series of
preferred stock, Series C, of BancShares, respectively.
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The Merger Agreement requires that, effective as of the Effective Time, the
Boards of Directors of the combined company and the combined bank will consist
of 14 directors, (i) 11 of whom will be members of the current Board of
Directors of BancShares, and (ii) three of whom will be selected from among the
current Board of Directors of CIT and will include as one of those three Ellen
R. Alemany, Chairwoman and Chief Executive Officer of CIT. We intend to appoint
Michael A. Carpenter and Vice Admiral John R. Ryan, USN (Ret.), as the two other
members from CIT's current Board of Directors who will join the Boards of
Directors of the combined company and the combined bank.

FINANCIAL PERFORMANCE SUMMARY
Third Quarter Highlights
•Net income for the third quarter of 2021 was $124.1 million, a decrease of
$18.6 million, or 13.0% compared to the same quarter in 2020. Net income
available to common shareholders totaled $119.4 million for the third quarter of
2021. Net income per common share decreased $1.86, or 13.3%, to $12.17 in the
third quarter of 2021, from $14.03 per share during the comparable quarter in
2020.
•Return on average assets for the third quarter of 2021 was 0.88%, down from
1.18% in the third quarter of 2020. Return on average equity for the third
quarter of 2021 was 11.29%, down from 14.93% during the comparable quarter of
2020.
•Net interest income was $346.9 million for the third quarter of 2021, a
decrease of $6.8 million, or 1.9% compared to the same quarter in 2020, but was
relatively stable compared to the second quarter of 2021. The taxable-equivalent
net interest margin ("NIM") was 2.61% for the third quarter of 2021, a decrease
of 45 basis points from 3.06% for the third quarter in 2020 and a decrease of 7
basis points from 2.68% from the second quarter of 2021.
•Provision for credit losses was a benefit of $1.1 million for the third quarter
of 2021 compared to an expense of $4.0 million for the same quarter in 2020. The
net charge-off ratio was 0.06% for the third quarter of 2021, up from 0.02% for
the second quarter of 2021 and 0.03% for the third quarter of 2020.
•Noninterest income was $122.9 million for the third quarter of 2021, an
increase of $2.4 million, or 2.0%, compared to $120.6 million for the same
quarter of 2020.
•Noninterest expense was $312.8 million for the third quarter of 2021, an
increase of $21.2 million, or by 7.3% compared to the same quarter of 2020.
•The allowance for credit losses was $183.2 million at September 30, 2021,
compared to $189.1 million at June 30, 2021. The $5.9 million change was due
primarily to a reserve release for the three months ended September 30, 2021
driven by continued strong credit performance, low net charge-offs, and
improvement in macroeconomic factors.
•Total loans were $32.5 billion as of September 30, 2021, a decrease of $173.5
million, or by 2.1% on an annualized basis, since June 30, 2021. Excluding loans
originated under the SBA-PPP, total loans increased $437.4 million, or by 5.6%
on an annualized basis, since June 30, 2021.
•Total deposits grew to $50.1 billion, an increase of $1.7 billion, or by 13.6%
on an annualized basis, since June 30, 2021.
•At September 30, 2021, BancShares remained "well-capitalized" as defined by
regulatory standards with a total risk-based capital ratio of 14.3%, a Tier 1
risk-based capital of 12.3%, a common equity Tier 1 ratio of 11.3% and a
leverage ratio of 7.7%.
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Year to Date Highlights
•Net income for the nine months ended September 30, 2021 totaled $424.2 million,
an increase of $70.5 million, or 19.9% compared to the same period in 2020. Net
income available to common shareholders totaled $410.3 million. Earnings per
share increased $7.83, or 23.1%, to $41.79 for the nine months ended September
30, 2021, from $33.96 during the comparable period in 2020.
•Return on average assets for the nine months ended September 30, 2021 was
1.05%, consistent with the same period in 2020. Return on average equity for the
nine months ended September 30, 2021 was 13.50%, up 91 basis points compared to
the same period in 2020.
•Net interest income for the nine months ended September 30, 2021, was $1.0
billion, an increase of $3.5 million, or 0.3% compared to the same period of
2020. The taxable-equivalent NIM was 2.69% for the nine months ended September
30, 2021, a decrease of 54 basis points from 3.23% during the comparable period
of 2020.
•Provision for credit losses was a benefit of $31.7 million for the nine months
ended September 30, 2021, compared to $52.9 million in expense for the same
period in 2020. The net charge-off ratio was 0.04% for the nine months ended
September 30, 2021, a 3 basis point decrease compared to the same period of
2020.
•Noninterest income was $393.7 million for the nine months ended September 30,
2021, an increase of $43.8 million, or 12.5%, compared to $350.0 million for the
same quarter of 2020.
•Noninterest expense was $910.3 million for the nine months ended September 30
2021, an increase of $27.0 million or by 3.1% compared to the same quarter of
2020.
•The allowance for credit losses was $183.2 million at September 30, 2021,
compared to $224.3 million at December 31, 2020. The $41.1 million change was
due primarily to a reserve release for the nine months ended September 30, 2021
driven by continued strong credit performance, low net charge-offs, and
improvement in macroeconomic factors.
•Total loans were $32.5 billion, a decrease of $275.8 million since December 31,
2020. Excluding SBA-PPP loans, total loans increased $1.0 billion, or by 4.6% on
an annualized basis, since December 31, 2020.
•Total deposits grew to $50.1 billion, an increase of $6.6 billion since
December 31, 2020 or by 20.4% on an annualized basis.
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Table 2
SELECTED QUARTERLY DATA
                                                                      2021                                                   2020
                                                Third                Second                 First                Fourth                 Third                 Nine months ended September 30
(Dollars in thousands, except share data)      Quarter               Quarter               Quarter               Quarter               Quarter                  2021                    2020
SUMMARY OF OPERATIONS
Interest income                            $    361,855          $    

361 825 $ 355,323 $ 376,876 $ 374,334

        $     1,079,003           $  1,107,150
Interest expense                                 14,968                15,432                15,671                18,160                20,675                   46,071                 77,697
Net interest income                             346,887               346,393               339,652               358,716               353,659                1,032,932              1,029,453
Provision (credit) for credit losses             (1,120)              (19,603)              (10,974)                5,403                 4,042                  (31,697)                52,949
Net interest income after provision for
credit losses                                   348,007               365,996               350,626               353,313               349,617                1,064,629                976,504

Noninterest income                              122,944               134,150               136,649               126,765               120,572                  393,743                349,985
Noninterest expense                             312,818               301,578               295,926               305,373               291,662                  910,322                883,312
Income before income taxes                      158,133               198,568               191,349               174,705               178,527                  548,050                443,177
Income taxes                                     34,060                45,780                44,033                36,621                35,843                  123,873                 89,538
Net income                                      124,073               152,788               147,316               138,084               142,684                  424,177                353,639
Net income available to common
shareholders                               $    119,437          $    

148 152 $ 142,680 $ 133,448 $ 138,048

        $       410,269           $    344,213
Net interest income, taxable equivalent    $    347,451          $    347,035          $    340,271          $    359,370          $    354,256          $     1,034,758           $  1,031,395
PER COMMON SHARE DATA
Net income                                 $      12.17          $      15.09          $      14.53          $      13.59          $      14.03          $         41.79           $      33.96
Cash dividends on common shares                    0.47                  0.47                  0.47                  0.47                  0.40                     1.41                   1.20
Market price at period end (Class A)             843.17                832.74                835.77                574.27                318.78                   843.17                 318.78
Book value per share at period-end               432.07                421.39                405.59                396.21                380.43                   432.07                 380.43
SELECTED QUARTERLY AVERAGE BALANCES
Total assets                               $ 55,922,358          $ 

54 399 331 $ 51,409,634 $ 49,557,803 $ 48,262,155 $ 53,926,971

           $ 44,834,045
Investment securities                        10,707,519            10,534,348             9,757,650             9,889,124             9,930,197               10,336,652              8,774,840
Loans and leases (1)                         32,707,591            33,166,049            33,086,656            32,964,390            32,694,996               32,985,376             31,148,683
Interest-earning assets                      52,371,165            51,519,684            48,715,279            46,922,823            45,617,376               50,882,100             42,151,861
Deposits                                     49,107,087            47,751,103            44,858,198            43,123,312            41,905,844               47,254,360             38,612,836
Interest-bearing liabilities                 29,662,791            28,909,320            27,898,525            26,401,222            25,591,707               28,830,007             24,388,339
Securities sold under customer repurchase
agreements                                      672,114               677,451               641,236               684,311               710,237                  663,713                614,920
Other short-term borrowings                           -                     -                     -                     -                     -                        -                 67,522
Long-term borrowings                          1,222,452             1,227,755             1,235,576             1,250,682             1,256,331                1,228,546              1,164,475
Common shareholders' equity                   4,196,655             4,058,236             3,935,267             3,786,158             3,679,138                4,063,386              3,651,132
Shareholders' equity                       $  4,536,592          $  

4,398,173 $ 4,275,204 $ 4,126,095 $ 4,019,075

          $     4,403,323           $  3,896,645
Common shares outstanding                     9,816,405             9,816,405             9,816,405             9,816,405             9,836,629                9,816,405             10,137,321
SELECTED QUARTER-END BALANCES
Total assets                               $ 56,901,977          $ 

55 175 318 $ 53,908,606 $ 49,957,680 $ 48,666,873 $ 56,901,977

           $ 48,666,873
Investment securities                        10,875,354            10,894,227            10,222,107             9,922,905             9,860,594               10,875,354              9,860,594
Loans and leases                             32,516,189            32,689,652            33,180,851            32,791,975            32,845,144               32,516,189             32,845,144
Deposits                                     50,065,762            48,410,596            47,330,997            43,431,609            42,250,606               50,065,762             42,250,606
Securities sold under customer repurchase
agreements                                      663,575               692,604               680,705               641,487               693,889                  663,575                693,889
Other short-term borrowings                           -                     -                     -                     -                     -                        -                      -
Long-term borrowings                          1,219,229             1,224,488             1,230,326             1,248,163             1,252,016                1,219,229              1,252,016
Shareholders' equity                       $  4,581,295          $  

4,476,490 $ 4,321,400 $ 4,229,268 $ 4,074,414

          $     4,581,295           $  4,074,414
Common shares outstanding                     9,816,405             9,816,405             9,816,405             9,816,405             9,816,405                9,816,405              9,816,405
SELECTED RATIOS AND OTHER DATA
Return on average assets (annualized)              0.88  %               1.13  %               1.16  %               1.11  %               1.18  %                  1.05   %               1.05  %
Return on average common shareholders'
equity (annualized)                               11.29                 14.64                 14.70                 14.02                 14.93                    13.50                  12.59
Net yield on interest-earning assets
(taxable equivalent)                               2.61                  2.68                  2.80                  3.02                  3.06                     2.69                   3.23
Net charge-offs to average loans and
leases (annualized)                                0.06                  0.02                  0.03                  0.06                  0.03                     0.04                   0.07
Allowance for credit losses to total loans
and leases(2):
PCD                                                4.94                  4.73                  5.30                  5.18                  5.07                     4.94                   5.07
Non-PCD                                            0.51                  0.53                  0.57                  0.62                  0.61                     0.51                   0.61
Total                                              0.56                  0.58                  0.63                  0.68                  0.68                     0.56                   0.68
Ratio of total nonperforming assets to
total loans, leases and other real estate
owned                                              0.63                  0.71                  0.73                  0.74                  0.73                     0.63                   0.73
Total risk-based capital ratio                    14.30                 14.15                 14.14                 13.81                 13.70                    14.30                  13.70
Tier 1 risk-based capital ratio                   12.32                 12.13                 12.02                 11.63                 11.48                    12.32                  11.48
Common equity Tier 1 ratio                        11.34                 11.14                 11.00                 10.61                 10.43                    11.34                  10.43
Tier 1 leverage capital ratio                      7.68                  7.67                  7.84                  7.86                  7.80                     7.68                   7.80
Dividend payout ratio                              3.86                  3.11                  3.23                  3.46                  2.85                     3.37                   3.53
Average loans and leases to average
deposits                                          66.60                 69.46                 73.76                 76.44                 78.02                    69.80                  80.67



(1) Average loan and lease balances include PCD loans, non-PCD loans and leases,
loans held for sale and nonaccrual loans and leases.
(2) Loans originated in relation to the SBA-PPP ($1.7 billion as of September
30, 2021) do not have a recorded ACL. As of September 30, 2021, the ratio of ACL
to total Non-PCD loans excluding SBA-PPP loans is 0.53%, while the ratio of ACL
to total loans excluding SBA-PPP loans is 0.58%.
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BUSINESS COMBINATIONS
CIT Group Inc.
On October 15, 2020, BancShares and CIT, entered into the Merger Agreement by
and among BancShares, FCB, the Merger Sub, and CIT, the parent company of CIT
Bank. Pursuant to the terms and subject to the conditions set forth in the
Merger Agreement, Merger Sub and CIT will ultimately merge with and into FCB,
with FCB as the surviving entity. The Merger Agreement further provides that
immediately following the consummation of the Mergers, CIT Bank will merge with
and into FCB, with FCB as the surviving bank.
The Merger Agreement was unanimously approved by the Board of Directors of each
of BancShares and CIT. The transaction has been approved by the shareholders of
both companies and has received regulatory approval from the North Carolina
Commissioner of Banks and the FDIC.
On September 30, 2021, the parties entered into an amendment to the merger
agreement pursuant to which the parties mutually agreed to extend until March 1,
2022 the date after which either party may elect to terminate the merger
agreement if the merger has not yet been completed. Completion of the proposed
merger remains subject to approval from the Board of Governors of the Federal
Reserve System and both parties are committed to continuing to seek such
approval. The parties have responded to all questions issued by the Staff of the
Federal Reserve Board, and the Staff has informed us that they do not have
further questions at this time. The parties have been informed that the
application is presently at the Governor level, but the Board of Governors has
not provided a time frame for its decision on the application. Closing is
expected to occur as soon as practicable following receipt of such approval and
the satisfaction or waiver of other customary closing conditions.

Federal Deposit Insurance Corporation Assisted Transactions
BancShares completed fourteen FDIC-assisted transactions between 2009 and 2017.
Nine of the fourteen FDIC-assisted transactions included shared-loss agreements
which, for their terms, protected us from a substantial portion of the credit
and asset quality risk we would otherwise have incurred.
For certain FDIC-assisted transactions, the shared-loss agreement included a
provision related to a payment owed to the FDIC at the termination of the
agreement. As of September 30, 2021, these agreements have been satisfied
following a $16.1 million payment made to the FDIC for the final active
agreement during the first quarter of 2021.
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Table 3
CONSOLIDATED QUARTER-TO-DATE AVERAGE TAXABLE-EQUIVALENT BALANCE SHEETS
                                                                                   Three months ended September 30
                                                                   2021                                                        2020
                                                                   Interest                                                    Interest
                                               Average             Income/             Yield/              Average             Income/            Yield/
(Dollars in thousands)                         Balance             Expense              Rate               Balance             Expense             Rate
Assets
Loans and leases                           $ 32,707,591          $ 319,738               3.85  %       $ 32,694,996          $ 336,934              4.06  %
Investment securities:
U.S. Treasury                                         -                  -                  -               695,419                497              0.28
Government agency                               824,499              2,076               1.01               587,377              1,335              0.91
Mortgage-backed securities                    9,164,180             29,056               1.27             8,047,247             28,236              1.40
Corporate bonds                                 597,386              7,610               5.10               489,602              6,433              5.26

Other investments                               121,454                544               1.78               110,552                739              2.66
Total investment securities                  10,707,519             39,286               1.47             9,930,197             37,240              1.50
Overnight investments                         8,956,055              3,395               0.15             2,992,183                757              0.10
Total interest-earning assets                52,371,165            362,419               2.73            45,617,376            374,931              3.24
Cash and due from banks                         364,593                                                     349,079
Premises and equipment                        1,239,111                                                   1,261,864
Allowance for credit losses                    (189,885)                                                   (222,793)
Other real estate owned                          40,786                                                      52,716
Other assets                                  2,096,588                                                   1,203,913
Total assets                               $ 55,922,358                                                $ 48,262,155

Liabilities
Interest-bearing deposits:
Checking with interest                     $ 11,323,503          $   1,350               0.05  %       $  9,239,838          $   1,369              0.06  %
Savings                                       3,979,389                342               0.03             3,070,619                314              0.04
Money market accounts                         9,866,327              2,357               0.09             8,108,832              3,634              0.18
Time deposits                                 2,599,006              4,024               0.61             3,205,850              8,151              1.01
Total interest-bearing deposits              27,768,225              8,073               0.12            23,625,139             13,468              

0.23

Securities sold under customer repurchase
agreements                                      672,114                358               0.21               710,237                395              0.22
Other short-term borrowings                           -                  -                  -                     -                  -                 -
Long-term borrowings                          1,222,452              6,537               2.09             1,256,331              6,812              2.15
Total interest-bearing liabilities           29,662,791             14,968               0.20            25,591,707             20,675              

0.32

Noninterest-bearing deposits                 21,338,862                                                  18,280,705
Other liabilities                               384,113                                                     370,668
Shareholders' equity                          4,536,592                                                   4,019,075
Total liabilities and shareholders' equity $ 55,922,358                                                $ 48,262,155
Interest rate spread                                                                     2.53  %                                                    2.92  %

Net interest income and net yield on
interest-earning assets                                          $ 347,451               2.61  %                             $ 354,256              3.06  %


Loans and leases include PCD loans, non-PCD loans, nonaccrual loans and loans
held for sale. Yields related to loans, leases and securities exempt from both
federal and state income taxes, federal income taxes only, or state income taxes
only are stated on a taxable-equivalent basis assuming a statutory federal
income tax rate of 21.0%, as well as a blended state income tax rate of 3.3% and
3.4%, for the three months ended September 30, 2021 and 2020, respectively. The
taxable-equivalent adjustment was $564 thousand and $597 thousand for the three
months ended September 30, 2021 and 2020, respectively.
                                       41
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  Table of Contents
Table 4
CONSOLIDATED YEAR-TO-DATE AVERAGE TAXABLE-EQUIVALENT BALANCE SHEETS
                                                                                      Nine months ended September 30
                                                                    2021                                                          2020
                                                                    Interest                                                      Interest
                                               Average              Income/              Yield/              Average              Income/             Yield/
(Dollars in thousands)                         Balance              Expense               Rate               Balance              Expense              Rate
Assets
Loans and leases                           $ 32,985,376          $   968,231               3.89  %       $ 31,148,683          $   989,708              4.20  %
Investment securities:
U.S. Treasury                                   126,363                  172               0.18               401,666                2,853              0.95
Government agency                               818,591                5,942               0.97               655,097                6,883              1.40
Mortgage-backed securities                    8,676,573               74,936               1.15             7,224,224               87,475              1.61
Corporate bonds                                 604,241               23,158               5.11               332,029               12,692              5.10

Other investments                               110,884                1,442               1.74               161,824                3,653              3.02
Total investment securities                  10,336,652              105,650               1.36             8,774,840              113,556       

1.73

Overnight investments                         7,560,072                6,948               0.12             2,228,338                5,828         

0.35

Total interest-earning assets                50,882,100            1,080,829               2.81            42,151,861            1,109,092              3.48
Cash and due from banks                         354,104                                                       351,334
Premises and equipment                        1,244,405                                                     1,258,147
Allowance for credit losses                    (208,477)                                                     (206,737)
Other real estate owned                          45,122                                                        53,871
Other assets                                  1,609,717                                                     1,225,569
Total assets                               $ 53,926,971                                                  $ 44,834,045

Liabilities
Interest-bearing deposits:
Checking with interest                     $ 11,009,608          $     4,263               0.05  %       $  8,665,758          $     4,380              0.07  %
Savings                                       3,747,847                  966               0.03             2,837,867                  911              0.04
Money market accounts                         9,488,641                7,500               0.11             7,583,359               19,262              0.34
Time deposits                                 2,691,652               12,679               0.63             3,454,438               31,025              1.20
Total interest-bearing deposits              26,937,748               25,408               0.13            22,541,422               55,578        

0.33

Securities sold under customer repurchase
agreements                                      663,713                1,052               0.21               614,920                1,236              0.27
Other short-term borrowings                           -                    -                  -                67,522                1,052              2.05
Long-term borrowings                          1,228,546               19,611               2.10             1,164,475               19,831              2.24
Total interest-bearing liabilities           28,830,007               46,071               0.21            24,388,339               77,697              0.42
Noninterest-bearing deposits                 20,316,612                                                    16,071,414
Other liabilities                               377,029                                                       477,647
Shareholders' equity                          4,403,323                                                     3,896,645
Total liabilities and shareholders' equity $ 53,926,971                                                  $ 44,834,045
Interest rate spread                                                                       2.60  %                                                      3.06  %

Net interest income and net yield on
interest-earning assets                                          $ 1,034,758               2.69  %                             $ 1,031,395     

3.23%


Loans and leases include PCD loans, non-PCD loans, nonaccrual loans and loans
held for sale. Yields related to loans, leases and securities exempt from both
federal and state income taxes, federal income taxes only, or state income taxes
only are stated on a taxable-equivalent basis assuming a statutory federal
income tax rate of 21.0%, as well as a blended state income tax rate of 3.3% and
3.4%, for the nine months ended September 30, 2021 and 2020, respectively. The
taxable-equivalent adjustment was $1.8 million and $1.9 million for the nine
months ended September 30, 2021 and 2020, respectively.
                                       42

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