First Citizens eyes loan sales to repay FDIC after SVB deal

• Key insight: First Citizens made its first payment on a $35 billion debt to the FDIC connected with its Silicon Valley Bank acquisition in 2023.
• Expert quote: “We’re continuing to explore some strategic loan portfolio sales … to provide liquidity.” — Chief Financial Officer Craig Nix
• Forward look: The bank expects to make additional payments to the FDIC throughout 2026.

First Citizens BancShares in Raleigh, North Carolina, beat analysts’ fourth-quarter earnings expectations by a wide margin, but its lending in 2026 may be crimped by the need to repay its debt to the Federal Deposit Insurance Corp.

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The $229.7 billion-asset company is projecting relatively muted loan growth of 3% to 6% this year, with its ability to expand the portfolio likely limited by plans to accelerate repayment of its $35 billion FDIC debt, a hangover from its acquisition of the failed Silicon Valley Bank in March 2023.

To finance the SVB deal, First Citizens, parent to First Citizens Bank, issued a five-year purchase money note to FDIC at 3.5% interest. It made its first payment, of $2.5 billion, in the fourth quarter of 2025, relying mainly on securities sales to raise the necessary cash.

To fund additional payments in 2026, First Citizens is considering selling loans, which could impact future net interest income production.

“We’re continuing to explore some strategic loan portfolio sales … to provide liquidity,” Chief Financial Officer Craig Nix said Friday during the company’s quarterly earnings call.

First Citizens’ planned purchase of 138 branches from Toronto-based BMO Financial Group should provide a partial counterweight, since about $1.1 billion of loans are included in the deal, which is expected to close in the middle of this year.

Piper Sandler analyst Stephen Scouten wrote in a research note that First Citizens “is guiding to loan growth of $5 billion to $9 billion in 2026, but deposit growth of $20 billion to $25 billion as it looks to build funding sources, presumably for the further repayment of the purchase money note.”

At the end of the fourth quarter, First Citizens reported commercial loan balances of $83 billion — up 10% from a year ago and 4% from Sept. 30, 2025. The company attributed most of the linked-quarter increase to its Global Fund Banking operation, which serves private equity and venture capital firms. First Citizens acquired the unit as part of the SVB deal.

On the call with analysts, Chairman and CEO Frank Holding said he was “excited about the momentum in our commercial bank” entering 2026. Meanwhile, Nix said the Global Fund Banking pipeline remained full, with $11.5 billion at year end 2025.

Fourth quarter earnings totaled $580 million, or $45.81 per share. On an adjusted basis, earnings per share were $51.27, well in excess of the $43.79 consensus projected by analysts, according to S&P.

First Citizens earned $2.2 billion of net income for all of 2025.

For the three months ending Dec. 31, net revenue totaled $2.44 billion, up 1% from the same period in 2024. The increase was driven by some spread income growth, paired with gains from the company’s railcar leasing and wealth management business lines. Deposits grew 4% year over year, totaling $161.6 billion on Dec. 31.

First Citizens reported fourth-quarter net charge-offs of $143 million, a 39% linked-quarter drop. Losses had spiked in the quarter ending Sept. 30, when First Citizens and a number of other banks accounted for their exposure to bankrupt auto supplier First Brands.

Fourth-quarter nonaccrual loans totaled $1.3 billion, or 0.88% of total loans and leases, down from the Sept. 30, 2025, level but up slightly year over year. 

Holding described 2025 as a “successful year, despite a challenging macroeconomic backdrop.” 

“We’re excited about our prospects for 2026,” Holding added.