First Citizens expects net interest income of $6.68 billion to $6.75 billion in 2026
Key Facts
First Citizens set its 2026 net interest income outlook at a range of $6.68 billion to $6.75 billion, according to its third-quarter results presentation, which did not describe the range as an increase from prior guidance. The company estimated fourth-quarter net interest income at $1.70 billion to $1.77 billion. The guidance came as the bank posted net interest income of $1.70 billion in the third quarter, up $43 million from the previous quarter. But net interest margin fell 3 basis points sequentially to 3.07%. The bank reported results on October 23, alongside an additional share repurchase plan.
The company reported net income of $606 million in the third quarter, compared with $672 million in the second quarter, while income available to common shareholders reached $577 million, or $51.23 per share. On an adjusted basis, income available to common shareholders was $623 million, or $55.37 per share. Chief Executive Frank Holding said quarterly performance "exceeded our expectations," citing revenue, loan and deposit growth, resilient credit quality and expense discipline. Net interest income data in the presentation showed an annual decline of 2.0%, from $1.734 billion in the third quarter of 2025 to $1.699 billion in the same period of 2026. That places quarterly income growth alongside an annual decline in this item.
Loan interest income rose $88 million from the previous quarter, which the company attributed mainly to an increase in average balances and higher yields. By contrast, interest expense on interest-bearing deposits increased $90 million, as average balances and the rate paid on them rose. The yield on average interest-earning assets was 5.36%, up 2 basis points sequentially, while the rate on average interest-bearing liabilities rose 6 basis points to 3.01%. The cost of average total deposits also increased to 2.16% in the third quarter from 2.07% in the second quarter. Noninterest-bearing deposits fell to 22.9% of total deposits at the end of September, from 24.5% at the end of June.
Loans and leases grew 4.1% between the end of June and the end of September, reaching $157.19 billion, while deposits rose 6.8% to $185.26 billion. The company said the commercial bank segment drove most of the loan increase, with growth of $5.48 billion, concentrated mainly in fund finance. The general bank segment added $633 million to loans, driven largely by the acquisition of BMO branches. The company completed the purchase of 138 branches on September 4, adding about $4.9 billion in deposits and about $650 million in loans. Deposits rose to 88.3% of total funding at the end of September, from 84.3% at the end of June.
The company is continuing to repay the FDIC purchase money note, paying $8 billion during the third quarter and an additional $1.5 billion in October. Management expects quarterly payments of between $3.5 billion and $4 billion in coming quarters, targeting full repayment of the balance by the end of 2027. The note balance fell to $20.45 billion on September 30, 2026, from $35.85 billion a year earlier. Credit quality indicators showed nonaccrual loans declining to $1.37 billion, or 0.87% of loans, at the end of September, compared with $1.45 billion and 0.96% at the end of June. Net charge-offs also fell to 0.27% of average loans, from 0.29% in the previous quarter.
The board approved an additional plan to repurchase up to $1.2 billion of Class A shares through 2027, after the bank repurchased $600 million of shares in the third quarter. An Investing.com report said the stock rose 1.5% after results were announced on October 23. The company also declared a quarterly cash dividend of $2.25 per share, payable on December 15 to shareholders of record on November 30. Management held its earnings discussion call on Friday, October 23, at 9 a.m. Eastern time. An earlier report published by EL7 in July covered the $8 billion repayment plan; the current guidance sets a quarterly repayment pace and an expected date to retire the balance by the end of 2027.