Business Context and Reporting Period
Company: First Citizens BancShares, Inc. (FCNCA)
Filing Type: Form 8-K (Current Report)
Date of Report: April 7, 2025
Event: Termination of a Material Definitive Agreement (Item 1.02). First-Citizens Bank & Trust Company (FCB), a wholly-owned subsidiary, entered into a Termination Agreement with the Federal Deposit Insurance Corporation (FDIC) to end the commercial shared-loss agreement related to the March 27, 2023, acquisition of Silicon Valley Bridge Bank, N.A. (SVBB).
Key Financial Metrics and Obligations
- Covered Assets: The terminated Shared-Loss Agreement covered approximately $60 billion in loans acquired from SVBB.
- Outstanding Debt: A Purchase Money Note payable to the FDIC remains outstanding with a principal amount of $35.99 billion as of December 31, 2024.
- Debt Terms: The Purchase Money Note bears interest at a fixed rate of 3.50% per annum and matures in March 2028.
- Settlement Status: As of the Termination Date, no payments or other obligations are due or outstanding between FCB and the FDIC under the Shared-Loss Agreement.
- Financial Performance: This filing does not provide specific revenue, profit, cash flow, or margin data for the reporting period.
Material Changes Versus Prior Period
- Agreement Termination: All rights and obligations under the Shared-Loss Agreement, including FDIC loss sharing and FCB reimbursement provisions, terminated effective April 7, 2025.
- Reporting Obligations: FCB is no longer subject to reporting covenants and obligations related to the Shared-Loss Agreement.
- Loss Sharing Structure: The previous structure, where the FDIC reimbursed 0% of losses up to $5 billion and 50% of losses in excess of $5 billion, is no longer in effect.
Management Commentary, Risks, and Outlook
Rationale for Termination: Management determined that the likelihood of reaching the $5 billion loss threshold during the remaining five-year period of the Shared-Loss Agreement was remote. The termination also eliminates associated administrative reporting responsibilities.
Surviving Obligations: Transition provisions for related debt agreements, specifically the Purchase Money Note, survive the termination of the Shared-Loss Agreement.
Risk Factors: The filing includes standard forward-looking statement disclaimers citing risks such as economic conditions, interest rate fluctuations, regulatory changes (including FDIC assessments and capital rules), geopolitical conflicts, cyberattacks, and the impacts of previous bank failures.
Investor Verification Checklist
- Verify the exact terms of the surviving Purchase Money Note ($35.99 billion principal, 3.50% fixed rate, March 2028 maturity).
- Confirm that no contingent liabilities or payments remain outstanding under the terminated Shared-Loss Agreement.
- Review the full text of the Termination Agreement (Exhibit 10.1) for any specific transition provisions not summarized in the 8-K.
- Assess the impact of removing FDIC loss sharing on the bank's internal risk modeling for the $60 billion SVBB loan portfolio.