With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

This is the 40th year for our annual Fastest-Growing Companies list, which ranks companies based on growth in revenue, profits, and stock returns.

100 Fastest-Growing Companies

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Energy sector dominated this year for the first time since 2008, with 28 companies featured on the list.

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Industrials came out on top this year, with 22 companies featured on the list.

This year’s Fortune 500 marks the 67th running of the list.

Fastest-growing Companies

Revenue 3 Yr Growth Rank

Revenue 3 Yr Annual Growth Rate

EPS 3 Yr Growth Rank

EPS 3 Yr Annual Growth Rate

Total Return 3 Yr Rank

Total Return 3 Yr Annual Rate

Beat S&P 500 3 Yr Return

Current Streak

Years on List

Sector

Strongest Dimension

Years on list

Previous rank

State

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Founded in the 1800s, First Citizens BancShares is one of the largest commercial banks in the United States. First Citizens BancShares is the holding company for First-Citizens Bank & Trust Company, which offers retail and commercial banking services to individuals, small businesses, and larger companies in the United States and internationally. Since purchasing Silicon Valley Bank in 2023, First Citizens has offered financial services to startups and technology firms through a division called Silicon Valley Commercial.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

First Citizens BancShares (FCNCA): Company Profile, Stock Price, News, Rankings

legacy

First Citizens BancShares

first citizens bancshares

Good morning and thank you. Welcome to First Citizens' Q1 2026 Earnings Call. Joining me on the call today are our Chairman and Chief Executive Officer, Frank Holding, and Chief Financial Officer, Craig Nix. They will provide Q1 business and financial updates referencing our earnings call presentation, which you can find on our website. Our comments will include forward-looking statements, which are subject to risks and uncertainties that may cause actual results to differ materially from expectations. We assume no obligation to update such statements. These risks are outlined on page three of the presentation. We will also reference non-GAAP financial measures. Reconciliations of these measures against the most directly comparable GAAP measures can be found in section five of the presentation. Finally, First Citizens is not responsible for, and does not guarantee the accuracy of earnings transcripts provided by third parties.

Thank you, Deanna. Good morning and welcome everyone. I'll start by highlighting our overall performance for the quarter before turning it over to Craig Nix to take you through our financial results and outlook for 2026 in more detail. Starting on page five, we were pleased with our Q1 results. This morning, we reported adjusted earnings per share of $44.86, representing an adjusted ROE and ROA of 10.39% and 0.97%, respectively. While lower rates were a headwind, we saw strong deposit growth, credit quality remained strong, and expenses came in below our expectations. Deposit growth accelerated this quarter, up 5.7% sequentially, anchored by increased client activity in tech and healthcare, and Global Fund Banking. In addition, deposits grew in the General Bank segment and the Direct Bank.

This growth was also supplemented by the strategic use of broker deposits to further bolster our liquidity position. We also achieved solid increases in off-balance sheet client funds driven by the tech and healthcare, and Global Fund Banking businesses. We continue to optimize our capital stack, returning another $900 million to shareholders through share repurchases. Due to our strong liquidity position, we were able to prepay another $2.5 billion to the FDIC on our FDIC purchase money note during the quarter. Turning to our announcement this morning, we are expanding our commercial solutions and optimizing our brand portfolio to better serve our clients and drive growth. In 2026, we are accelerating our strategic roadmap by expanding capabilities in payments, international banking, and digital assets.

As part of this growth, we will transition to a united brand structure in the Q4 featuring innovation banking and Fund Banking sub-brands under the First Citizens umbrella. Brand adjustments always generate questions, and we want to be perfectly clear that while names are changing, the client experience is not. Our relationship teams remain the cornerstone of our service, providing the same deep specializations that our clients rely on. This brand alignment simply opens the door to a larger platform of solutions and a more connected network of experts for the future. Despite a complex global backdrop, we continue to operate from a position of strength. Our capital, liquidity, and risk discipline provide a solid foundation that allows us to focus on what matters most, serving our clients and customers, and continuing to drive long-term shareholder value.

We are confident in our strategy, disciplined in our execution, and very optimistic about the path ahead. I'll conclude with that and pass it over to Craig Nix to take us through the financial results for the quarter and guidance for the remainder of the year. Craig?

Thank you, Frank, and good morning, everyone. I will anchor my comments to page eight of the presentation. Pages nine through 27 provide details underlying our Q1 results. In the Q1, we delivered adjusted earnings of $44.86 per share on net income of $560 million.

The sequential decline of $6.41 per share largely reflects the impact of lower interest rates on our net interest margin. However, we were pleased that lower non-interest expense helped offset a portion of the net interest income decline. In line with our previous guidance, net interest income declined by $101 million, with NIM compressing 11 basis points to 3.09%. This decline was primarily driven by a lower earning asset yield following the Fed's rate cut in late 2025, alongside a shorter day count this quarter. However, these headwinds were moderated through strong organic loan growth, lower funding costs, and a reduction in average borrowings. Non-interest income was down $9 million from the linked quarter, but in line with our previous guidance.

The majority of the decline centered in other non-interest income, which was down $15 million, largely attributable to a decrease in other investment income, a line item subject to fluctuation on a quarterly basis. Outside of the decline in other non-interest income, our core fee categories performed well. We saw solid growth in deposit fees and lending related capital market fees, though these increases were partially tempered by seasonal declines in factoring commissions. Additionally, while the Fed funds rate environment pressured client investment fees, we successfully mitigated that impact through a $3.9 billion increase in average off-balance sheet client funds. Adjusted non-interest expense was $38 million lower sequentially, outperforming our previous guidance. This reduction reflects a $16 million decline in professional fees as we successfully completed several technology and risk management projects at the end of 2025.

Marketing costs also declined by $15 million as we pivoted our funding strategy this quarter to leverage lower cost broker deposits rather than higher cost deposits in the Direct Bank. While the Direct Bank remains a critical funding source and we expect marketing expense to normalize in the future, we will remain agile, balancing deposit growth with cost efficiency to protect our margins. Finally, we saw a $16 million seasonal normalization in other expenses. These reductions were partially offset by seasonally higher benefits expense due to resets, as well as continued deliberate investments in our technology platforms, which are essential to scaling our operations and enhancing our client experience. Turning to the balance sheet, period end loans grew $762 million, or 0.5% sequentially, driven by Global Fund Banking, which was up $1 billion on record production of over $6 billion, surpassing the record set just last quarter.

With average line utilization also trending higher, we see evidence of higher client demand and a robust pipeline moving forward. In middle market banking, we added $327 million in growth as stable production was bolstered by lower prepayments. While we are pleased with this quarter's growth, we maintain a guarded outlook given the broader macro environment. General Bank loans decreased $591 million, primarily reflecting a strategic decision to move $365 million in SBA loans to held for sale. Excluding this balance sheet optimization, the decline was driven by typical Q1 seasonality. On an average loan basis, loans increased $2.2 billion sequentially, led by our Global Fund Banking business. Turning to the right-hand side of the balance sheet, period end deposits grew by $9.3 billion, or 5.7% sequentially. This growth reflects strong organic growth in our core business segments, as well as execution of our balance sheet optimization strategies.

Within SVB Commercial, we saw significant momentum in Global Fund Banking and tech and healthcare, where deposits grew sequentially by $5.6 billion, driven by a visible pickup in VC investment and exit activity. Growth here underscores the strength of our franchise within the innovation economy. While these inflows were encouraging, we remain disciplined in our outlook as a portion of this growth stemmed from large short-term deposits. As we've noted before, these inflows can be lumpy, and we have already observed some anticipated outflows in April. We are managing these balances with a strict focus on liquidity and funding cost optimization in mind. In the General Bank, deposits grew by $1.1 billion. This was largely driven by a successful seasonal campaign within our CAB business and solid growth in our branch network, demonstrating our ability to consistently execute on core deposit gathering initiatives.

To support the transition away from the purchase money note and limit impacts to net interest income, we also tactically utilized $1.8 billion in broker deposits. This was a flexible lever for us this quarter as the all-in cost was lower than lending rates in the Direct Bank as we continued to monitor pricing and tenor. To ensure a resilient and cost-effective funding mix. On an average basis, deposits also performed well, growing by $2.7 billion, or 1.7% sequentially, driven primarily by tech and healthcare banking and CAB. Finally, off-balance sheet momentum was equally strong. SVB commercial client funds rose $8.1 billion to nearly $78 billion, while average off-balance sheet funds grew by $3.9 billion. Turning to credit, provision was $103 million for the quarter, up $46 million from the linked quarter.

The increase was driven almost entirely by a larger reserve release last quarter, rather than a negative shift in credit quality. In fact, the net charge-off ratio came in 9 basis points lower than the linked quarter at 30 basis points, with net charge-offs totaling $111 million. This was favorable to our previous guidance, though I'd characterize the beat as a matter of timing on specific resolution efforts, particularly within our general office book, rather than a significant change in our overall outlook. While non-accrual loans moved slightly higher to 96 basis points, the change was isolated to a few specific credits. We do not view this as a signal of broader migration or systemic pressure across the portfolio. This is supported by our $8 million reserve release this quarter, which was underpinned by growth in high-quality segments like Global Fund Banking and changes to the macroeconomic outlook.

Given the heightened market focus on private credit and MDFI exposures, we've included a new slide today to provide additional transparency. Our MDFI exposure stands at $38.8 billion, but it is critical to look at the structure. 83% of this book consists of capital call lines. These are backed by contractual LP commitments, not investment performance, and historically carry exceptionally low credit risk. The remainder of the book is diversified, well-collateralized, and supported by structural protections. Traditional private credit represents approximately 8% of the MDFI portfolio and includes lines provided to credit funds and warehouse lines, both of which are well secured. To summarize, our exposure to the private credit ecosystem is defined by conservative structures, significant sponsor equity, and rigorous covenant protections. While we remain vigilant in a volatile macro environment, our credit culture is built for this backdrop.

We are confident that our discipline standards and resilient portfolio position us well to navigate the cycles ahead. Turning to our capital position, we continue to execute on our commitment to a disciplined capital return. As of April 21, 2026, we have made significant progress on our 2025 share repurchase plan, having repurchased over 20% of total common shares outstanding for a total of $5.7 billion. This includes the successful completion of our 2024 plan and roughly 52% of our current $4 billion authorization. Our Q1 CET1 ratio stood at 10.83%. While this represents a 32 basis points sequential decrease, it was a deliberate outcome as we balanced loan growth and share repurchases against Q1 earnings. As part of our annual capital planning and informed by internal stress testing, we adjusted our CET1 target range down by 50 basis points to 10%-10.5%.

We believe this recalibrated level provides the ideal balance of ensuring we remain strong for severe stress events while maximizing our flexibility to support both client growth and shareholder returns. Regarding the pace of repurchases moving forward, we returned $900 million to shareholders this quarter. However, as we approach our new target capital range, we anticipate a slower pace for the remainder of the year. This shift reflects prudent management of the balance sheet, accounting for anticipated organic growth, the shifting economic backdrop, and our commitment to a conservative capital buffer. Finally, we are encouraged by the revised Basel III proposal released in March. Our initial assessment indicates a potential 70-100 basis points benefit to our CET1 ratio, primarily driven by lower risk-weighted assets under the new standardized approach.

While the proposal includes the phase-in of AFS and pension-related AOCI, we don't expect a material impact given our short duration investment strategy and limited AOCI risk. Overall, these regulatory developments represent a clear step forward, providing us with enhanced capital flexibility to drive long-term value for our shareholders. Turning to page 29, I'll conclude with our outlook for the remainder of 2026. The macroeconomic backdrop remains fluid, making it difficult to narrow the range of potential impacts on the broader economy and our business lines and clients. Accordingly, we have not made significant changes to our previous guidance, but do continue to monitor the environment and how it could impact our performance. Starting with the balance sheet, we expect loans to land between $149 billion and $152 billion at the end of the Q2.

In the commercial bank, we expect loan growth to be anchored in Global Fund Banking, where we are managing a robust $12 billion pipeline. While we expect long-term expansion, we remind everyone that ending balances can ebb and flow based on the timing of client draws, and we anticipate some quarter-to-quarter volatility here, even as absolute levels grow. Outside of growth in Global Fund Banking, we are projecting growth in commercial finance industry verticals and middle-market banking portfolios. In the General Bank, as seasonal headwinds abate, we expect growth to be supported in the branch networks business and commercial loan portfolios. For the full year, we are reiterating our loan guidance of $153 billion-$157 billion, inclusive of the $1 billion in the BMO acquisition.

To optimize our balance sheet, we continue to evaluate strategic sales similar to this quarter's $365 million SBA securitization to efficiently fund the repayment of our purchase money note. Now to deposits and funding. We anticipate Q2 deposits between $171 billion and $174 billion. We expect growth in the General Bank segment and in the Direct Bank, as we are seeing strong momentum in both, where competitive pricing and marketing are helping us capture share. Growth in these channels will help mitigate expected outflows in Global Fund Banking and within tech and healthcare, as those clients continue to utilize cash for operations or move to off-balance sheet investment products. For the full year, we reaffirm our range of $181 billion-$186 billion, including the $5.7 billion BMO infusion. This range continues to include significant growth in the Direct Bank as we look to continue to prepay the purchase money note.

We've made significant progress on the purchase money note, with $5.5 billion in total prepayments through today, including $2.5 billion this quarter and another $500 million in April. Moving forward, we expect to pay down at least $500 million-$1 billion per month, utilizing excess liquidity, broker deposits, or other funding levers as interest rates and market conditions dictate. Next, our net interest income and rate outlook covers a range of zero to two 25 basis point rate cuts, where the Fed funds rate may decline from a range of 350-375 today to a range of 300-325 by year-end. We expect Q2 headline net interest income to be in the $1.6 billion-$1.67 billion range. While we expect strong earning asset growth, we think it will be partially offset by modest increases in funding costs as deposit competition remains intense across all channels.

For the full year, we are marginally tightening our range to $6.5-$6.8 billion. This accounts for the persistent pressure on DDA balances in a higher for longer environment, continued deposit competition, and a projected $100 million reduction in loan accretion. Moving to credit, we expect Q2 net charge-offs in the 35-45 basis point range. We are actively managing the commercial general office portfolio and the SVB commercial books, where we expect losses to remain elevated in the medium term. While the equipment finance portfolio losses have largely stabilized, we are watching one larger deal that could result in elevated losses in the Q2. Reflecting Q1 performance, we are lowering our full year net charge-off outlook to 30-40 basis points, with the range reflective of the fact that a handful of large deals can cause lumpiness in the ratio.

Moving to non-interest income, we expect it to be in the $520 million-$550 million range in the Q2. Overall, we continue to see strength in many of our business lines, such as fees from wealth, rail, and credit card and merchant services. For the full year, we are raising our adjusted non-interest income guidance to $2.12 billion-$2.22 billion, driven by our rail business, repricing momentum, deposit fees and service charges, growth in wealth, and lending-related fees as we continue to benefit from loan growth and capital markets activity. On to expenses. We expect the Q2 to be in the $1.34 billion-$1.38 billion range, slightly up from the Q1. We expect the growth to come primarily from higher Direct Bank marketing costs, given our focus on client acquisition in that channel.

As we continue to focus on bending the cost curve, we are reducing our full year range to $5.34 billion-$5.43 billion. The increase in full year expenses includes merit-based increases, marketing costs, tech scaling and the BMO acquisition impact which will add less than 1% to our overall expense growth in 2026. As Frank mentioned earlier, we are excited to implement a united brand strategy to continue to align platforms and provide expanded solutions for our clients. While we are still assessing the impact of this announcement, we believe it will add an additional $20 million-$30 million to full year non-interest expense. We expect that our adjusted efficiency ratio will be in the lower 60% range in 2026, as the impact of prior year rate cuts have put downward pressure on net interest income.

We believe that the investments we have made in our franchise while driving up costs in the short and medium term, are foundational to delivering positive operating leverage over time. Meanwhile, exercising disciplined expense management is a top priority for us given headwinds to net interest income. While we are not providing guidance beyond 2026, we are committed to returning to positive operating leverage as the interest rate environment normalizes and we begin to recognize some of the efficiencies from the investments in our franchise. Longer term, our goal remains to operate an efficiency ratio in the mid-50s. Finally, for both the Q2 and full year 2026, we expect our tax rate to be in the range of 24.5%-25.5%, which is exclusive of any discrete items. To conclude, our Q1 results were reflective of the strength and resilience of our diversified business model.

Thanks to our long-term focus and continued investments in our business, we're well-positioned to continue delivering value to our clients, customers, and shareholders. This concludes our prepared remarks. I will now turn it over to the operator for instructions for the question and answer portion of the call.

Oh, great. Good morning. Craig or Frank, on the new CET1 target, just want to make sure I got all the pieces. 10.5 is the new target, and then on top of that, there's a 70-100 benefit on the Basel III. How should we think about, I hear you on the near term on the buybacks, but is there any bias within the range near term? Any changes in uses of capital near term?

Yeah. If you go back to 2025 and so far 2026, our repurchases have ranged from $600 million-$900 million per quarter. As we move closer to that range, the 10%-10.5%, we would expect to moderate to the lower end of that range for the next two quarters.

Okay. On the NII guide, I appreciate the fluidity of the curve. Last quarter, you gave some comments on troughing expectations and margin expectations. Any refresh of that, both on a core and a reported basis, Craig? Thanks.

Sure. In terms of just the tightening of the guidance, we would still for the full year expect low single-digit % decline in the absolute dollar amount of net interest income. If we look at the trajectory though for Q2 2026, we would expect both headline and ex accretion net interest income to be down low single-digits percentage points and NIM to be in the mid 3.0s and ex accretion in the high 2.9s. As far as Q4 exit, we expect both headline and ex accretion net interest income to be up mid-single-digits percentage points and expect headline NIM to be in the high 3.0s and ex accretion in the low 3.0s. In terms of troughing, I think you asked about that.

We would expect that headline net interest income and ex accretion net interest income to have already troughed in the Q1, but that NIM would trough in the Q3.

Great, thanks. Wanted to touch on the deposit growth outlook. Very good start here in the Q1. A lot of it coming from the SVB side of things. Craig, I think I heard you say that you expect Direct Bank to drive a lot of the growth going forward, but just wondering what the outlook is on the SVB side of things after a strong quarter.

Elliot, why don't you do the SVB, and Mark, you can weigh in on this as well.

Starting with the SVB, we do expect continued growth through the end of the year. I think when you look at the balances, as Craig mentioned, we did have some very large inflows, client accounts that we do expect to either go back out and/or transition to off-balance sheet. I think, Q2 from a Silicon Valley perspective, we do think moderate, but we do see growth really through the end of the year.

Mark, anything? Nothing to add, Mark? Okay, thanks.

Okay, great. On the credit quality front, on the NPL uptick, Craig, I heard it's nothing systemic, but I was just wondering if you could provide a little more color as to what drove that, those credits. What type of credits they were and resolution efforts to reduce the NPL ratio at around 1% going forward.

Okay. Andrew Giangrave, would you like to take that one, please?

Yeah, sure. The increase was driven specifically by three main credits, two of which are multifamily, that have moved to non-accrual. We really don't see a lot of loss content on those two. We reviewed them for specific reserves and are working through resolution on those. The third was an account in our innovation portfolio. It's been criticized for some time, and is currently up for sale, and we hope to have resolution on that credit at some point this year. In terms of efforts to bring down our NPLs, the majority of our NPLs really reside in our General Bank. As Craig noted at the beginning, charge-offs in our General Bank portfolio were down this quarter, and a lot of that was timing on resolution.

We would anticipate as we work through this year to see some of those resolutions come to fruition, and as a result, we would anticipate NPLs to come down.

Hi, everyone. Craig or Frank, I appreciate the new slide you have on the MDFI book. Could you help us quantify your exposure to companies in the software industry for both loans and deposits? I don't think this has been disclosed since you acquired SVB a few years ago.

Yeah, I will let Andy elaborate, but in terms of on-balance-sheet software is $8.1 billion, and about $14.4 billion of exposure. I'll let Andy talk about what that portfolio looks like.

Sure. Thanks, Craig. Having backed the innovation economy for quite a while, we obviously have some very deep experience managing tech credit portfolios through multiple economic cycles and changes in tech shifts there. We have seen improvement throughout the last several quarters on our criticized levels within the software portfolio. If you think about our portfolio, a couple of main buckets, if you will. The first would be emerging growth VC-backed type companies. They are focused on being kind of the disruptors themselves and are really AI native or investing heavily in AI. You could think about those really being the investor-dependent type transactions. They're really focused on access to capital, and that's where the risk would be. The other large bucket would be the middle market software companies, kind of PE-controlled or the late-stage venture-backed companies.

These are actively focused on AI adoption and the evolution to address any potential disruption, and that would be the second bucket. There's also within that $8 billion, there's probably 25%-30% of which are either cash secured or ABL transactions, so we feel good about that credit risk as well. We have done a deep dive into the portfolio to evaluate any attributes for vulnerability or strength within each of those borrowers, including looking at are they a system of record? Do they have proprietary data? What is the level of switching cost, et cetera? We've got a good sense for strengths or weaknesses with each of those borrowers. We're also leveraging our deep relationships with the VC firms themselves to get additional insight. As we go through the Q2, we will be doing additional focal reviews at a finer segmentation.

That's kind of the overview, high-level overview of our software exposure. I think you'd touched on MDFI as well. Within our private credit book, we did a deep dive there this quarter as well. The software exposure within that portfolio averages about 14% of software exposure for any given fund, so not too outsized. As Craig said, those structures are very well collateralized and have a lot of structural protections. Then finally, as part of that deep dive, we did a stress scenario, and assumed some very conservative either default rates and recovery rates and found that any losses would be manageable coming out of that portfolio.

Great. Thanks, Elliot. My follow-up from an earlier question, Craig, on the exit NII guide you gave earlier, you gave a range of up mid-single digits. Could you make clear what time period that was for and what comparison period was the base? Thank you.

The up mid-single digits was the Q1 to Q4 exit.

Hey, guys. Good morning. Just a question on the competition that remains intense in deposits. Could you maybe provide some commentary on just thoughts in your franchise of what you're seeing with terms and pricing from peers?

I think competition is intense. Pricing, betas haven't moved much given pricing pressures. I would describe competition as intense. I will let Marc maybe talk about a little about what he's seeing at SVB and Elliot a little bit of what we're seeing in the branch network and the Direct Bank.

I will start. It's Marc Cadieux on SVB, and as Craig mentioned, the competition is intense. We see it from all manner of financial institutions, neobanks, fintechs, et cetera, competing for balances. As I think the quarter indicates, we are holding our own, notwithstanding the competition, allowing, as already mentioned, that there is some volatility to the balances and all of which is reflected in our guide. I will pass it along.

Yeah. I think as it relates to both the branch network and especially the Direct Bank, where we're really seeing the pressure is on a lot of the money market promos, CD rates too, now with the expectation of really no rate cuts. We're seeing competitors still out there with really a 4% type rate. I think our hope would be that betas would have shifted down a little bit, that we would have seen something more in the high threes. Competition's really remained, and those lead rates have really stayed elevated through the Q1.

Great. Just as a follow-up, the commentary about the broker deposits being all in lower cost versus the Direct Bank, just any commentary you can provide on what maybe the spread difference is between the two, just to give us a sense?

Yeah, sure. This is Tom. If you look at the broker deposits, during the Q1, you were able to raise those, what I would consider in the high threes. Whereas to Elliot's point earlier, some of the competition we've seen in the Direct Bank and even some of the branch network, we've seen rates north of 4% there. Obviously, the broker market's efficient. Marketing costs are sort of fixed at that 10 basis points. You have an all-in cost below that 4% handle, in that channel. That's really what drove us to shift a little heavier into that space. Again, we'll continue to monitor market conditions as we move ahead.

Hi. Thanks for taking the question. On the loan outlook, it sounds like the pipelines for Global Fund Banking are robust, but you sounded more guarded on the middle market side of the business. Can you talk about what's driving this? Is it macro uncertainty or geopolitical risk? Just any color there would be helpful.

Yeah. I think in the middle market and really kind of the industry vertical space, I think we still do expect growth. I think certainly with the geopolitical events occurring right now, a little bit of uncertainty. We did see prepayments pick up a little bit in the Q1. I think all else equal, we are expecting growth really kind of in the mid-single digits in the industry verticals and really that middle market space. Still optimistic, but I think we do have a little bit of hesitation just with kind of the uncertainty that's out there right now.

Great. In terms of the loan pricing environment and the competitive environment there, can you provide some commentary there? It's clearly very intense on the deposit side. Curious about the loan pricing side.

Yeah. We've generally, I think over the past few quarters, seen spreads come in a little bit, just due to the competition. What I'd say is I think we're reaching more of a stabilization on really those spreads. I think competition is fierce right now, but I think we'd characterize it really throughout 2025 and certainly in Q1 2026 as remaining intense.

Good morning. Is there a further goal on the FDIC purchase money note beyond what you've already done in April?

A further goal, we would anticipate at a minimum based on the roll-off of the loans collateralizing or U.S. Treasuries collateralizing the note to pay down an additional $500 million-$1 billion per month.

That sort of gives you an idea of the trajectory we're on.

Sure. Back to the other conversation about broker deposits. You really are a long ways away from having any restraints on how many brokered funds you could do. Is that correct?

That's correct. Yes, that's correct. These were really sort of the first deposits. We had another slog of broker deposits that matured, I believe it was back in October last year. We're really coming off of a very low base here. Really the way we look at that is we look at those deposits in conjunction with the Direct Bank, and sort of look for, as I spoke about earlier, opportunities from a cost perspective where we can get the best execution.

Great. In general, in the big picture, the Direct Bank is still going to grow. It might just be more of a timing difference in terms of where you are this year, next year, et cetera.

Yeah, that's right. We still expect the Direct Bank to continue to grow. It's just that we might moderate some of the expectations if we continue to put on broker deposits to augment that growth, if that turns out to be cheaper.

Understood. Thank you for taking our questions this morning.

Thank you, and thanks, everyone, for joining our call today. We appreciate your ongoing interest in our company, and if you have further questions or need additional information, please feel free to reach out to the investor relations team. We hope you have a great rest of your day.

First Citizens BancShares (FCNCA) Q1 2026 Earnings Call Transcript

Company Participants