FCNCA

MKT CAP —P/E 11.4DIV YIELD 0.39%FCF YIELD —REV TTM $9.6B +0.9%NET INCOME $2.4B −1.8%NET DEBT $23B52W 1,742.49 – 2,291.33SEC XBRL · TTM TO Invalid Date

How FCNCA rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

of sentences unchanged

Added

1362

new sentences

Dropped

542

sentences removed

Length

+36,684

words, now 54,541

New in FY2025

We strive to mitigate the credit risk of our loans to NDFIs through our underwriting and credit monitoring processes.
As discussed above, approximately 85% of our NDFI portfolio at December 31, 2025 is comprised of capital call lines which have strong credit quality based on the structural protection provided by the funds and the underlying investors.
Additionally, we establish advance rates (the percentage of the collateral value FCB will lend to the borrower) for loans in the Other NDFI Portfolios commensurate with the risks of the underlying collateral type, structural protection of the funds or investors, diversification of the funds, and financial strength of the borrower (or sponsor).
Real estate secured loans Our CRE portfolio comprises the vast majority of the real estate industry loans in the table above, which is based on the industry of the obligor.
Additionally, we have CRE and owner occupied commercial mortgage loans that are secured by real estate, but are categorized in other industries in the table above.
At December 31, 2025, the combined balances of our CRE and owner occupied commercial mortgage loans were $41.44 billion, or 34% of commercial loans and leases, compared to $40.12 billion or 36% at December 31, 2024.
We have historically carried a concentration of real estate secured loans, but actively mitigate exposure through underwriting policies, which primarily rely on borrower cash flow rather than underlying collateral values.
When we do rely on underlying real property values, we prefer financing secured by owner-occupied real property.
Healthcare and information industries The healthcare and information industries in the table above largely consist of the healthcare, life sciences, and technology sectors, which include clients in our Commercial Finance, Global Fund Banking, and Tech and Healthcare lines of business within our Commercial Bank segment.
Loans and leases to borrowers in medical, dental or other healthcare fields were $11.16 billion as of December 31, 2025, which represents 9.2% of commercial loans and leases, compared to $11.05 billion or 9.8% of commercial loans and leases at December 31, 2024.
Loans and leases to borrowers in the information industry were $9.70 billion as of December 31, 2025, which represents 8.0% of commercial loans and leases, compared to $9.57 billion or 8.5% of commercial loans and leases at December 31, 2024.
We actively mitigate credit risk exposure of these industry concentrations through our underwriting policies that emphasize reliance on adequate levels of borrower repayment sources.
Larger Balance Loans The following table provides a summary of commercial loans by loan size and loan class as of December 31, 2025: Table 40 Commercial Loans by Size and Class dollars in millions Less Than $10 Million $10 Million to $30 Million Greater Than $30 Million Total Commercial Loans Commercial and industrial $ 16,337 $ 12,077 $ 16,307 $ 44,721 Capital call lines 1,174 3,330 27,287 31,791 Owner occupied commercial mortgage 14,792 2,187 681 17,660 Investor dependent 1,636 896 246 2,778 Commercial real estate 8,561 6,706 8,517 23,784 Total $ 42,500 $ 25,196 $ 53,038 $ 120,734 Most of our loans greater than $30 million at December 31, 2025 are capital call lines which are described above in “Loans to non-depository financial institutions (“NDFIs”).” Geographic Concentrations The following table summarizes geographic concentrations based on the location of the real estate collateral for owner occupied commercial mortgage and commercial real estate loans, and based on the obligor address for all other commercial loans.
Table 41 Commercial Loans and Leases - Geography dollars in millions December 31, 2025 December 31, 2024 State California $ 26,056 21.6 % $ 24,363 21.7 % New York 12,193 10.1 10,154 9.0 North Carolina 11,005 9.1 11,122 9.9 Texas 8,811 7.3 8,417 7.5 Massachusetts 7,325 6.1 7,249 6.4 Florida 6,175 5.1 6,091 5.4 All other states 46,093 38.2 42,446 37.8 Total U.S. $ 117,658 97.5 % $ 109,842 97.7 % Total international 3,076 2.5 2,535 2.3 Total $ 120,734 100.0 % $ 112,377 100.0 % Consumer Loan Concentration Loan concentrations may exist when multiple borrowers could be similarly impacted by economic or other conditions.
The following table summarizes state concentrations greater than 5.0% of consumer loans based on customer address: Table 42 Consumer Loans - Geography dollars in millions December 31, 2025 December 31, 2024 State California $ 8,118 29.8 % $ 8,615 31.0 % North Carolina 6,736 24.8 6,716 24.1 South Carolina 3,502 12.9 3,509 12.6 Massachusetts 1,597 5.9 1,683 6.0 Other states 7,243 26.6 7,321 26.3 Total $ 27,196 100.0 % $ 27,844 100.0 % Asset Risk Asset risk is a form of price risk that is a primary risk of our leasing businesses.
This relates to the risk to earning capital arising from changes in the value of owned leasing equipment.
Asset risk in our leasing business is evaluated and managed in the divisions and overseen by risk management processes.
In our asset-based lending business, we also use residual value guarantees to mitigate or partially mitigate exposure to end of lease residual value exposure on certain of our finance leases.
Our business process consists of: (1) setting residual values at transaction inception, (2) systematic periodic residual value reviews, and (3) monitoring levels of residual realizations.
Residual realizations, by business and product, are reviewed as part of the quarterly financial and asset quality review.
Reviews for impairment are performed at least annually.
In combination with other risk management and monitoring practices, asset risk is monitored through reviews of the equipment markets, including utilization rates and traffic flows; the evaluation of supply and demand dynamics; the impact of new technologies; and changes in regulatory requirements on different types of equipment.
At a high level, demand for equipment is correlated with gross domestic product (“GDP”) growth trends for the markets the equipment serves, as well as the more immediate conditions of those markets.
Cyclicality in the economy and shifts in trade flows due to specific events represent risks to the earnings that can be realized by these businesses.
In the Rail segment, BancShares seeks to mitigate these risks by maintaining a relatively young fleet of assets, which can bolster attractive lease and utilization rates.
Market Risk Market risk is the risk arising from changes in interest rates, foreign exchange, fixed income, commodity, or equity prices which can result in financial loss, or adverse impact to earnings and capital.
Interest rate risk management BancShares is exposed to the risk that changes in market conditions may affect interest rates and negatively impact earnings.
The risk arises from the nature of BancShares’ business activities, the composition of BancShares’ balance sheet, and changes in the level or shape of the yield curve.
BancShares manages this inherent risk strategically based on prescribed guidelines and approved limits.
Interest rate risk can arise from many of BancShares’ business activities, such as lending, leasing, investing, deposit taking, derivatives, and funding activities.
We evaluate and monitor interest rate risk primarily through two metrics. • Net Interest Income Sensitivity (“NII Sensitivity”) measures the net impact of hypothetical changes in interest rates on forecasted NII; and • Economic Value of Equity (“EVE”) Sensitivity (“EVE Sensitivity”) measures the net impact of these hypothetical changes on the value of equity by assessing the economic value of assets, liabilities and off-balance sheet instruments.
BancShares uses a holistic process to measure and monitor both short term and long term risks, which includes, but is not limited to, gradual and immediate parallel rate shocks, changes in the shape of the yield curve, and changes in the relationship of various yield curves.
NII Sensitivity generally focuses on shorter term earnings risk, while EVE Sensitivity assesses the longer-term risk of the existing balance sheet.
Our exposure to NII Sensitivity is guided by the Risk Appetite Policy and Statement and a range of risk metrics, and BancShares may utilize tools across the balance sheet to adjust its interest rate risk exposures, including through business line actions and actions within the investment, funding and derivative portfolios.
The composition of our interest rate sensitive assets and liabilities generally results in a net asset-sensitive position for NII Sensitivity, whereby our assets will reprice faster than our liabilities.
A component of our interest rate risk management strategy is the use of derivative instruments to mitigate fluctuations in earnings caused by changes in market interest rates.
Interest rate swaps are the primary type of derivative instrument that we use as part of our interest rate risk management strategy.
These derivatives hedge interest income variability of floating rate loans indexed to SOFR.
Refer to Note 13—Derivative Financial Instruments for further information on our derivative portfolio.
Our funding sources consist primarily of deposits, and we also support our funding needs through wholesale funding sources (including unsecured and secured borrowings).

and 1322 more.

Gone since FY2024

Risk Factor Summary We are subject to a number of risks and uncertainties that could have a material impact on our business, financial condition and results of operations and cash flows.
As a financial services organization, certain elements of risk are inherent in our transactions and operations and are present in the business decisions we make.
We encounter risks as part of the normal course of our business, and our success is dependent on our ability to identify, understand and manage the risks presented by our business activities.
Risk Factors into the following areas, and the principal risks and uncertainties that management believes make an investment in us speculative or risky are summarized within their respective areas: • Strategic Risks: The risk to our current and projected financial condition arising from adverse business decisions, poor implementation, or lack of responsiveness to changes in the industry and operating environment. ▪ We may be adversely affected by risks associated with previous or potential future acquisitions, and any future acquisition may be subject to increased regulatory scrutiny. ▪ We encounter significant competition that may reduce our market share and profitability and our financial performance depends upon our ability to attract and retain customers for our products and services, which may be adversely impacted by weakened consumer or business confidence and by any inability on our part to predict and satisfy customers’ needs and demands. • Operational Risks: The risks of loss resulting from inadequate or failed processes, staffing and systems or from external events. ▪ We face significant operational risks in our businesses and may fail to maintain appropriate operational infrastructure and oversight. ▪ A cyberattack, information or security breach, or a technology outage of ours or of a third-party could adversely affect our ability to conduct our business, manage our exposure to risk, result in the disclosure or misuse of confidential customer or employee data or proprietary information, and increase our costs to maintain and update our operational and security systems and infrastructure.
Such an event could adversely impact our results of operations, liquidity and financial condition, as well as cause us legal or reputational harm. ▪ We depend on the effectiveness and integrity of employees, and the systems and controls for which they are responsible, to manage operational risks. • Credit Risks: The risks that a borrower, obligor, or counterparty will fail to perform on an obligation. ▪ If we fail to effectively manage credit risk, our business and financial condition will suffer. ▪ Our allowance for credit losses may prove to be insufficient to absorb losses in our credit portfolios. ▪ Our concentration of loans and leases in certain industries increases the risk of losses and could impair our earnings if these industries experience economic difficulties. • Market Risks: The risks to our financial condition resulting from adverse movements in domestic and international macroeconomic and political conditions, as well as economic output levels, interest and inflation rates, employment levels, prices of commodities, consumer confidence levels, and changes in consumer spending, international trade policy, and fiscal and monetary policy. ▪ Failure to effectively manage our interest rate sensitivity within our defined risk appetite could adversely affect our earnings. ▪ Unfavorable economic conditions, as considered through a range of metrics, have and could continue to adversely affect our business. • Liquidity Risks: The risks that we will be unable to meet our obligations as they come due because of an inability to (i) liquidate assets or obtain adequate funding, or (ii) unwind or offset specific exposures without significantly lowering market prices because of inadequate market depth or market disruptions, or that we will not meet the liquidity management requirements applicable to us as a Category IV banking organization, subject to the applicable transition periods. ▪ If our current level of balance sheet liquidity were to experience significant pressure, it could affect our ability to pay withdrawals by depositors, repay the Purchase Money Note (defined below) and fund our operations. ▪ We are subject to enhanced liquidity risk management requirements as a Category IV banking organization, and failure to meet these requirements could result in regulatory and compliance risks, and possible restrictions on our activities. • Capital Adequacy Risks: The risks that our capital levels become inadequate to preserve our safety and soundness, support our ongoing business operations and strategies and provide us with support against unexpected or sudden changes in the business/economic environment, or that we will not meet the capital adequacy requirements applicable to us as a Category IV banking organization, subject to the applicable transition periods. ▪ Our ability to grow is contingent upon access to capital, which may not be readily available to us. ▪ If we fail to meet regulatory guidelines, including enhanced capital adequacy, liquidity, stress testing, and capital planning requirements, or are subject to certain other legal limitations, our financial condition and ability to pay dividends or make other payments could be adversely affected. ▪ Increases to our level of indebtedness could adversely affect our ability to raise additional capital and to meet our obligations. • Compliance Risks: The risks of loss or reputational harm to us resulting from regulatory sanctions, fines, penalties or losses due to our failure to comply with laws, rules, regulations or other supervisory requirements applicable to us. ▪ We operate in a highly regulated industry, and the laws and regulations that govern our operations, taxes, corporate governance, executive compensation and financial accounting and reporting, including changes in them or our failure to comply with them, may adversely affect us. ▪ Information security and data privacy are areas of heightened legislative and regulatory focus. • Asset Risks: The risks that the value of our long-lived assets will be lower than expected, resulting in reduced income over the remaining life of the asset or a lower sale value. ▪ We may not be able to realize our entire investment in the equipment that we lease to our customers. ▪ Accounting for acquired assets may result in earnings volatility. • Financial Reporting Risks: The risks that our financial information is reported incorrectly or incompletely, including through the improper application of accounting standards or other errors or omissions. ▪ Accounting standards may change and increase our operating costs or otherwise adversely affect our results. ▪ Our accounting policies and processes are critical to the reporting of our financial condition and results of operations.
They require management to make estimates about matters that are uncertain, and such estimates may be materially different from actual results.
The risks and uncertainties that management believes are material to an investment in us are described below.
Additional risks and uncertainties that are not currently known to management or that management does not currently deem material could also have a material adverse impact on our financial condition, the results of our operations or our business.
If such risks and uncertainties were to materialize or the likelihoods of the risks were to increase, we could be adversely affected, and the market price of our securities could significantly decline.
The below risk factors should be read in conjunction with the information under “Regulatory Considerations” in Item 1.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the audited consolidated financial statements and Notes to the Consolidated Financial Statements in Item 8.
Strategic Risks We may be adversely affected by risks associated with previous and future acquisitions, and any future acquisitions may be subject to increased regulatory scrutiny.
We plan to continue to grow our business organically.
However, we have pursued and expect to continue to pursue acquisition opportunities that we believe support our business strategies and may enhance our profitability.
We must generally satisfy a number of material conditions prior to consummating any acquisition including, in many cases, federal and state regulatory approval or requirements, and we may be subject to potentially increased regulatory requirements in the future.
Further, changes in policies focused on bank acquisitions may interfere or impede future acquisition opportunities.
The FDIC and DOJ recently revised their bank merger review standards.
These agency actions have significantly modified the existing regulatory framework for bank merger transactions such that future proposed bank merger transactions by us may be subject to heightened regulatory scrutiny.
Business—Regulatory Considerations—Limitations on Mergers & Acquisitions for additional discussion on these developments.
Early indications suggest that the Trump administration will encourage the agencies to return to a less restrictive approach to bank merger reviews, including possible rescission or modification of the recent pronouncements described above.
Any enhanced regulatory scrutiny of bank mergers and acquisitions and revision of the framework for merger application review may adversely affect the marketplace for such transactions, could result in any future acquisitions being delayed, impeded or restricted in certain respects and result in new rules that possibly limit the size of financial institutions we may be able to acquire in the future and alter the terms for such transactions.
We may fail to complete strategic and competitively significant business opportunities as a result of our inability to obtain required regulatory approvals in a timely manner or at all, or the approval for such opportunity could include conditions imposing additional costs or limitations that reduce the anticipated related benefits.
In addition, we may fail to realize the anticipated benefits of our previous acquisitions and fully integrating our prior acquisitions may be more difficult, costly or time-consuming than expected.
Acquisitions of financial institutions, assets of financial institutions or other operating entities involve operational risks and uncertainties, including but not limited to: • difficulties, inefficiencies, or cost overruns associated with the integration of operations, personnel, technologies, services, and products of acquired companies with ours; • inability to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits; • potential disruption to our business; and • the possible loss of key executive officers, employees and customers.
In addition, acquired companies or assets may have unknown or contingent liabilities, exposure to unexpected asset quality problems that require write downs or write-offs, additional regulatory requirements or difficulty retaining key employees and customers.
Due to these and other issues relating to acquisitions, we may not be able to realize projected cost savings, synergies or other benefits associated with any prior or future acquisition.
Failure to efficiently integrate any acquired entities or assets into our existing operations could significantly increase our operating costs and consequently have material adverse effects on our financial condition and results of operations.
In the past, we have acquired, and may in the future continue to acquire, certain assets and assume certain liabilities of failed banks in FDIC-assisted transactions.
FDIC-assisted transactions, such as the SVBB Acquisition, present unique risks because of the limited due diligence, expedited timelines, minimal negotiation of terms required by the FDIC and the limited availability of audited financial statements of the assets acquired and liabilities assumed.
To mitigate certain of those risks, including credit risks of acquired loans, FDIC-assisted transactions typically provide for FDIC assistance, including potential loss-sharing.
For example, in connection with the SVBB Acquisition, FCB entered into a commercial shared loss agreement with the FDIC.
Although loss sharing agreements reduce the credit risks of, and capital required for, FDIC-assisted transactions, these transactions often require additional resources and time to service acquired problem loans, costs related to integration of personnel and operating systems, and the establishment of processes and internal controls to service acquired assets in accordance with applicable FDIC standards.
If the covered loans are not managed in accordance with the commercial shared loss agreement, the FDIC has the right to refuse or delay payment for loan losses.
Losses we experience on the assets acquired in the SVBB Acquisition that are not covered under the commercial shared loss agreement could have an adverse effect on our business, financial condition, results of operations and prospects.
The SVBB Acquisition, like the CIT Merger, increased the breadth and complexity of our business with the addition of new business lines in which we had not previously engaged and expanded our geographic scope to new areas.
Further, legacy Silicon Valley Bank loans were concentrated within certain industries, including technology, life science and healthcare, and with private equity and venture capital clients.
Our future success depends, in part, upon the continued ability to manage this expanded business while strengthening our reputation among the venture capital and private equity communities, and other participants in the industries that legacy Silicon Valley Bank served, which poses challenges for management, including challenges related to the management and monitoring of new and expanded operations and associated increased costs and complexity.
We encounter significant competition that may reduce our market share and profitability and our financial performance depends upon our ability to attract and retain customers for our products and services, which may be adversely impacted by weakened consumer or business confidence and by any inability on our part to predict and satisfy customers’ needs and demands.
Our profitability depends on our ability to compete successfully.
We operate in a highly competitive industry, and we expect competition to intensify.

and 502 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

Watch FCNCA. Know when insiders buy.

One email the day a filing lands. Free.