FIRST CITIZENS BANCSHARES, INC.
Management's discussion and analysis ("MD&A") of earnings and related financial
data are presented to assist in understanding the financial condition and
results of operations of First Citizens BancShares, Inc. and its subsidiaries
("BancShares"). This discussion and analysis should be read in conjunction with
the unaudited consolidated financial statements and related notes presented
within this Quarterly Report on Form 10-Q along with our financial statements
and related MD&A of financial condition and results of operations included in
our Annual Report on Form 10-K for the year ended December 31, 2020 ("2020
Annual Report"). Intercompany accounts and transactions have been eliminated.
Although certain amounts for prior years have been reclassified to conform to
statement presentations for 2021, the reclassifications had no effect on
shareholders' equity or net income as previously reported. Unless otherwise
noted, the terms "we," "us" and "BancShares" refer to the consolidated financial
position and consolidated results of operations for BancShares.
EXECUTIVE OVERVIEW
BancShares conducts its banking operations through its wholly-owned subsidiary
First-Citizens Bank & Trust Company ("FCB"), a state-chartered bank organized
under the laws of the state of North Carolina .
BancShares' earnings and cash flows are primarily derived from our commercial
and retail banking activities. We gather deposits from retail and commercial
customers and also secure funding through various non-deposit sources. We invest
the liquidity generated from these funding sources in interest-earning assets,
including loans and leases, investment securities and overnight investments. We
also invest in bank premises, hardware, software, furniture and equipment used
to conduct our commercial and retail banking business. We provide treasury
services products, cardholder and merchant services, wealth management services
and various other products and services typically offered by commercial banks.
The fees and service charges generated from these products and services are
primary sources of noninterest income which is an essential component of our
total revenue.
We are focused on expanding our position in legacy and target markets through
organic growth and strategic acquisitions. We believe our franchise is
positioned for continued growth as a result of our client centric banking
principles, disciplined lending standards, and our people.
Refer to our 2020 Annual Report for further discussion of our strategy.
RECENT ECONOMIC AND INDUSTRY DEVELOPMENTS
During the first quarter of 2020, a novel strain of coronavirus ("COVID-19")
spread throughout the world, causing significant disruptions to the domestic and
global economies. In response to the outbreak, governments imposed restrictions
resulting in business shutdowns, regional quarantines, disruptions of supply
chains, changes in consumer behavior and overall economic instability. In recent
months, COVID-19 vaccines have been approved and are now generally available for
use in the United States and certain other countries, however, we cannot predict
how widely utilized they will be or whether they will be effective in preventing
the spread of COVID-19 (including its variants).
Although we cannot predict when or if normal economic activity and business
operations will resume, we did observe general declines in the level of economic
uncertainty and stabilization of macroeconomic forecasts during the first half
of 2021. In recent weeks, we have seen an uptick in the number of new cases,
although the absolute level of these new cases is significantly below the levels
witnessed at the height of the pandemic. We are unable to predict whether these
trends will continue and how this will affect the overall economy at the current
time. However, we remain vigilant in our review and monitoring efforts around
the duration and severity of the COVID-19 pandemic (including any of its
variants) and its effects on the overall economy and our financial results.
During the second quarter of 2021, the Federal Reserve's Federal Open Market
Committee ("FOMC") maintained the federal funds rate at a target range of 0.00%
to 0.25%. The FOMC acknowledged the economy's accelerating recovery from
COVID-19, but maintained that the recovery is incomplete and economic risks
remain. The FOMC expects to maintain this target range, but could see rate hikes
in 2023 and possibly earlier.
In response to the COVID-19 pandemic, the Small Business Administration Paycheck
Protection Program ("SBA-PPP") was established through the Coronavirus Aid
Relief and Economic Security Act (the "CARES Act") and the Consolidated
Appropriations Act 2021 to direct aid via loans to small businesses impacted by
the COVID-19 pandemic.
We completed the first round of SBA-PPP funding in the second half 2020. During
the second quarter of 2021, we completed the second round of funding, which
resulted in the origination of approximately 12,000 SBA-PPP loans totaling $1.2
billion . We recorded $27.2 million of interest and fee income related to SBA-PPP
loans for the quarter. As of June 30, 2021 , remaining net deferred fees on
SBA-PPP loans were $54.9 million .
With respect to the first round of SBA-PPP, we began accepting and processing
applications for forgiveness during the third quarter of 2020. We have received
approximately 20,000 forgiveness decisions from the SBA to date, representing
over $2.6 billion in forgiveness payments. We originated approximately 23,000
loans during round one totaling $3.2 billion .
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Table 1
SBA-PPP LOAN FORGIVENESS STATUS
(Dollars in thousands)
Round One Forgiveness Status at June 30, 2021 $ of Loans % of Round One Total
Received by FCB $ 2,933,046 91.3 %
Submitted to SBA 2,842,312 88.5
Approved by SBA 2,767,706 86.2
Funds Received 2,642,638 82.3
Through June 30, 2021 , over 99% of all COVID-19-related loan extensions have
begun repayment. Delinquency trends among loans entering repayment are in line
with the remainder of the portfolio, and we have not seen significant declines
in overall credit quality.
SIGNIFICANT EVENTS IN 2021
On October 15, 2020 , BancShares and CIT Group Inc., a Delaware corporation
("CIT"), entered into an Agreement and Plan of Merger (the "Merger Agreement")
by and among BancShares, FCB, FC Merger Subsidiary IX, Inc. , a direct, wholly
owned subsidiary of FCB ("Merger Sub"), and CIT, the parent company of CIT Bank,
N.A ., a national banking association ("CIT Bank "). Pursuant to the terms and
subject to the conditions set forth in the Merger Agreement, Merger Sub will
merge with and into CIT, with CIT as the surviving entity (the "First-Step
Merger"), and as soon as reasonably practicable following the effective time of
the First-Step Merger, CIT will merge with and into FCB, with FCB as the
surviving entity (together with the First-Step Merger, the "Mergers"). The
Merger Agreement further provides that immediately following the consummation of
the Mergers, CIT Bank will merge with and into FCB, with FCB as the surviving
bank (together with the Mergers, the "Transaction").
The Merger Agreement was unanimously approved by the Board of Directors of each
of BancShares and CIT. The Transaction has been approved by the shareholders of
both companies and has received regulatory approval from the North Carolina
Commissioner of Banks and the Federal Deposit Insurance Corporation ("FDIC").
Completion of the proposed merger remains subject to approval from the Board of
Governors of the Federal Reserve System and closing is expected in the third
quarter, subject to such approval and the satisfaction or waiver of other
customary closing conditions.
Upon the terms and subject to the conditions set forth in the Merger Agreement,
at the effective time of the First-Step Merger (the "Effective Time"), each
share of CIT common stock, par value $0.01 per share, issued and outstanding
immediately prior to the Effective Time ("CIT Common Stock"), except for certain
shares of CIT Common Stock owned by CIT or BancShares, will be converted into
the right to receive 0.06200 shares of BancShares Class A common stock, par
value $1.00 per share. Holders of CIT Common Stock will receive cash in lieu of
fractional shares.
In addition, at the Effective Time, each share of Fixed-to-Floating Rate
Non-Cumulative Perpetual Preferred Stock, Series A, par value $0.01 per share,
of CIT and 5.625% Non-Cumulative Perpetual Preferred Stock, Series B, par value
$0.01 per share, of CIT issued and outstanding will automatically be converted
into the right to receive one share of a newly created series of preferred
stock, Series B, of BancShares and one share of a newly created series of
preferred stock, Series C, of BancShares, respectively.
The Merger Agreement requires that, effective as of the Effective Time, the
Boards of Directors of the combined company and the combined bank will consist
of 14 directors, (i) 11 of whom will be members of the current Board of
Directors of BancShares, and (ii) three of whom will be selected from among the
current Board of Directors of CIT and will include as one of those three Ellen
R. Alemany , Chairwoman and Chief Executive Officer of CIT. We intend to appoint
Michael A. Carpenter and Vice Admiral John R. Ryan , USN (Ret.), as the two other
members from CIT's current Board of Directors who will join the Boards of
Directors of the combined company and the combined bank.
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FINANCIAL PERFORMANCE SUMMARY Second Quarter Highlights •Net income for the second quarter of 2021 was$152.8 million , a decrease of$1.0 million , or 0.6% compared to the same quarter in 2020. Net income available to common shareholders totaled$148.2 million for the second quarter of 2021. Net income per common share increased$0.35 , or 2.4%, to$15.09 in the second quarter of 2021, from$14.74 per share during the comparable quarter in 2020. •Return on average assets for the second quarter of 2021 was 1.13%, down from 1.36% in the second quarter of 2020. Return on average equity for the second quarter of 2021 was 14.64%, down from 16.43% during the comparable quarter of 2020. •Net interest income was$346.4 million for the second quarter of 2021, an increase of$9.0 million , or 2.7% compared to the same quarter in 2020. This was primarily due to lower rates paid on interest-bearing deposits, interest and fee income on SBA-PPP loans, and organic loan growth, partially offset by a decline in the yield on interest-earning assets. SBA-PPP loans contributed$27.2 million in interest and fee income for the second quarter of 2021 compared to$19.0 million in the same quarter of 2020. The taxable-equivalent net interest margin ("NIM") was 2.68% for the second quarter of 2021, a decrease of 46 basis points from 3.14% for the second quarter in 2020. •Provision for credit losses was a benefit of$19.6 million for the second quarter of 2021 compared to$20.6 million in expense for the same quarter in 2020. The net charge-off ratio was 0.02% for the second quarter of 2021, down from 0.03% for the first quarter of 2021 and 0.09% for the second quarter of 2020. •Noninterest income was$134.2 million for the second quarter of 2021, a decrease of$31.3 million , or 18.9%, compared to$165.4 million for the same quarter of 2020. •Noninterest expense was$301.6 million for the second quarter of 2021, an increase of$9.9 million or by 3.4% compared to the same quarter of 2020. •The allowance for credit losses was$189.1 million atJune 30, 2021 , compared to$210.7 million atMarch 31, 2021 . The$21.6 million change was due primarily to a reserve release for the three months endedJune 30, 2021 driven by continued improvement in macroeconomic factors, strong credit performance, and low net charge-offs. •Total loans were$32.7 billion as ofJune 30, 2021 , a decrease of$491.2 million , or by 5.9% on an annualized basis, sinceMarch 31, 2021 . Excluding loans originated under the SBA-PPP, total loans increased$605.6 million , or by 8.0% on an annualized basis, sinceMarch 31, 2020 . •Total deposits grew to$48.4 billion , an increase of$1.1 billion , or by 9.1% on an annualized basis, sinceMarch 31, 2021 . •AtJune 30, 2021 , BancShares remained "well capitalized" as defined by regulatory standards with a total risk-based capital ratio of 14.2%, a Tier 1 risk-based capital of 12.1%, a common equity Tier 1 ratio of 11.1% and a leverage ratio of 7.7%. 37 -------------------------------------------------------------------------------- Table of Contents Year to Date Highlights •Net income for the six months endedJune 30, 2021 totaled$300.1 million , an increase of$89.1 million , or 42.3% compared to the same period in 2020. Net income available to common shareholders totaled$290.8 million . Earnings per share increased$9.59 , or 47.9%, to$29.63 for the six months endedJune 30, 2021 , from$20.04 during the comparable period in 2020. •Return on average assets for the six months endedJune 30, 2021 was 1.14%, up 16 basis points compared to the same period in 2020. Return on average equity for the six months endedJune 30, 2021 was 14.67%, up 328 basis points compared to the same period in 2020. •Net interest income for the six months endedJune 30, 2021 , was$686.0 million , an increase of$10.3 million , or 1.5% compared to the same period of 2020. This was primarily due to lower rates paid on interest-bearing deposits, an increase in interest and fee income on SBA-PPP loans, and organic loan growth, partially offset by a decline in the yield on interest-earning assets. SBA-PPP loans contributed$58.1 million in interest and fee income for the six months endedJune 30, 2021 compared to$19.0 million in the comparable period in 2020. The taxable-equivalent NIM was 2.74% for the six months endedJune 30, 2021 , a decrease of 59 basis points from 3.33% during the comparable period of 2020. •Provision for credit losses was a benefit of$30.6 million for the six months endedJune 30, 2021 , compared to$48.9 million in expense for the same period in 2020. The net charge-off ratio was 0.03% for the six months endedJune 30, 2021 , a 7 basis point decrease compared to the same period of 2020. •Noninterest income was$270.8 million for the six months endedJune 30, 2021 , an increase of$41.4 million , or 18.0%, compared to$229.4 million for the same quarter of 2020. •Noninterest expense was$597.5 million for the six months endedJune 30 2021 , an increase of$5.9 million or by 1.0% compared to the same quarter of 2020. •The allowance for credit losses was$189.1 million atJune 30, 2021 , compared to$224.3 million atDecember 31, 2020 . The$35.2 million change was due primarily to a reserve release for the six months endedJune 30, 2021 driven by continued improvement in macroeconomic factors, strong credit performance, and low net charge-offs. •Total loans grew to$32.7 billion , a decrease of$102.3 million sinceDecember 31, 2020 . Excluding SBA-PPP loans, total loans increased$604.7 million , or by 3.7% on an annualized basis, sinceDecember 31, 2020 . •Total deposits grew to$48.4 billion , an increase of$5.0 billion sinceDecember 31, 2020 or by 23.1% on an annualized basis driven by organic growth and the effects of government stimulus. 38 --------------------------------------------------------------------------------
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Table 2
SELECTED QUARTERLY DATA
2021 2020
Second First Fourth Third Second Six months ended June 30
(Dollars in thousands, except share data) Quarter Quarter Quarter Quarter Quarter 2021 2020
SUMMARY OF OPERATIONS
Interest income $ 361,825 $ 355,323 $ 376,876 $ 374,334 $ 363,257 $ 717,148 $ 732,816
Interest expense 15,432 15,671 18,160 20,675 25,863 31,103 57,022
Net interest income 346,393 339,652 358,716 353,659 337,394 686,045 675,794
Provision (credit) for credit losses (19,603) (10,974) 5,403 4,042 20,552 (30,577) 48,907
Net interest income after provision for
credit losses 365,996 350,626 353,313 349,617 316,842 716,622 626,887
Noninterest income 134,150 136,649 126,765 120,572 165,402 270,799 229,413
Noninterest expense 301,578 295,926 305,373 291,662 291,679 597,504 591,650
Income before income taxes 198,568 191,349 174,705 178,527 190,565 389,917 264,650
Income taxes 45,780 44,033 36,621 35,843 36,779 89,813 53,695
Net income 152,788 147,316 138,084 142,684 153,786 300,104 210,955
Net income available to common
shareholders $ 148,152 $
142,680
$ 687,306 $ 677,139 PER COMMON SHARE DATA Net income$ 15.09 $
14.53
$ 29.63 $ 20.04 Cash dividends on common shares 0.47 0.47 0.47 0.40 0.40 0.94 0.80 Market price at period end (Class A) 832.74 835.77 574.27 318.78 405.02 832.74 405.02 Book value per share at period-end 421.39 405.59 396.21 380.43 367.57 421.39 367.57 SELECTED QUARTERLY AVERAGE BALANCES Total assets$ 54,399,331 $
51,409,634
10,534,348 9,757,650 9,889,124 9,930,197 8,928,467 10,148,144 8,190,813
Loans and leases (1) 33,166,049 33,086,656 32,964,390 32,694,996 31,635,958 33,126,572 30,367,030
Interest-earning assets 51,519,684 48,715,279 46,922,823 45,617,376 42,795,781 50,125,228 40,400,061
Deposits 47,751,103 44,858,198 43,123,312 41,905,844 39,146,415 46,312,642 36,948,238
Interest-bearing liabilities 28,909,320 27,898,525 26,401,222 25,591,707 24,407,285 28,406,714 23,780,042
Securities sold under customer repurchase
agreements 677,451 641,236 684,311 710,237 659,244 659,444 566,737
Other short-term borrowings - - - - 45,549 - 101,654
Long-term borrowings 1,227,755 1,235,576 1,250,682 1,256,331 1,275,928 1,231,643 1,118,042
Common shareholders' equity 4,058,236 3,935,267 3,786,158 3,679,138 3,648,284 3,996,751 3,637,129
Shareholders' equity $ 4,398,173 $
4,275,204
$ 4,336,688 $ 3,835,430 Common shares outstanding 9,816,405 9,816,405 9,816,405 9,836,629 10,105,520 9,816,405 10,289,320 SELECTED QUARTER-END BALANCES Total assets$ 55,175,318 $
53,908,606
10,894,227 10,222,107 9,922,905 9,860,594 9,508,476 10,894,227 9,508,476
Loans and leases 32,689,652 33,180,851 32,791,975 32,845,144 32,418,425 32,689,652 32,418,425
Deposits 48,410,596 47,330,997 43,431,609 42,250,606 41,479,245 48,410,596 41,479,245
Securities sold under customer repurchase
agreements 692,604 680,705 641,487 693,889 740,276 692,604 740,276
Other short-term borrowings - - - - - - -
Long-term borrowings 1,224,488 1,230,326 1,248,163 1,252,016 1,258,719 1,224,488 1,258,719
Shareholders' equity $ 4,476,490 $
4,321,400
$ 4,476,490 $ 3,991,444 Common shares outstanding 9,816,405 9,816,405 9,816,405 9,816,405 9,934,105 9,816,405 9,934,105 SELECTED RATIOS AND OTHER DATA Return on average assets (annualized) 1.13 % 1.16 % 1.11 % 1.18 % 1.36 % 1.14 % 0.98 % Return on average common shareholders' equity (annualized) 14.64 14.70 14.02 14.93 16.43 14.67 11.40 Net yield on interest-earning assets (taxable equivalent) 2.68 2.80 3.02 3.06 3.14 2.74 3.33 Net charge-offs to average loans and leases (annualized) 0.02 0.03 0.06 0.03 0.09 0.03 0.10 Allowance for credit losses to total loans and leases(2): PCD 4.73 5.30 5.18 5.07 5.07 4.73 5.07 Non-PCD 0.53 0.57 0.62 0.61 0.61 0.53 0.61 Total 0.58 0.63 0.68 0.68 0.69 0.58 0.69 Ratio of total nonperforming assets to total loans, leases and other real estate owned 0.71 0.73 0.74 0.73 0.77 0.71 0.77 Total risk-based capital ratio 14.15 14.14 13.81 13.70 13.63 14.15 13.63 Tier 1 risk-based capital ratio 12.13 12.02 11.63 11.48 11.38 12.13 11.38 Common equity Tier 1 ratio 11.14 11.00 10.61 10.43 10.32 11.14 10.32 Tier 1 leverage capital ratio 7.67 7.84 7.86 7.80 8.07 7.67 8.07 Dividend payout ratio 3.11 3.23 3.46 2.85 2.71 3.17 3.99 Average loans and leases to average deposits 69.46 73.76 76.44 78.02 80.81 71.53 82.19 (1) Average loan and lease balances include PCD loans, non-PCD loans and leases, loans held for sale and nonaccrual loans and leases. (2) Loans originated in relation to the SBA-PPP ($1.7 billion as ofJune 30, 2021 ) do not have a recorded ACL. As ofJune 30, 2021 , the ratio of ACL to total Non-PCD loans excluding SBA-PPP loans is 0.56%, while the ratio of ACL to total loans excluding SBA-PPP loans is 0.61%. 39 -------------------------------------------------------------------------------- Table of Contents BUSINESS COMBINATIONS CIT Group Inc. OnOctober 15, 2020 , BancShares and CIT, entered into the Merger Agreement by and among BancShares, FCB, the Merger Sub, and CIT, the parent company ofCIT Bank . Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub and CIT will ultimately merge with and into FCB, with FCB as the surviving entity. The Merger Agreement further provides that immediately following the consummation of the Mergers,CIT Bank will merge with and into FCB, with FCB as the surviving bank. The Merger Agreement was unanimously approved by the Board of Directors of each of BancShares and CIT. The transaction has been approved by the shareholders of both companies and has received regulatory approval from theNorth Carolina Commissioner of Banks and theFDIC . Completion of the proposed merger remains subject to approval from theBoard of Governors of theFederal Reserve System and closing is expected in the third quarter, subject to such approval and the satisfaction or waiver of other customary closing conditions. Federal Deposit Insurance Corporation Assisted Transactions BancShares completed fourteenFDIC -assisted transactions between 2009 and 2017. Nine of the fourteenFDIC -assisted transactions included shared-loss agreements which, for their terms, protected us from a substantial portion of the credit and asset quality risk we would otherwise incur. For certainFDIC -assisted transactions, the shared-loss agreement included a provision related to a payment owed to theFDIC at the termination of the agreement. As ofJune 30, 2021 , these agreements have been satisfied following a$16.1 million payment made to theFDIC for the final active agreement during the first quarter of 2021. 40 -------------------------------------------------------------------------------- Table of Contents Table 3 CONSOLIDATED QUARTER-TO-DATE AVERAGE TAXABLE-EQUIVALENT BALANCE SHEETS Three months ended June 30 2021 2020 Interest Interest Average Income/ Yield/ Average Income/ Yield/ (Dollars in thousands) Balance Expense Rate Balance Expense Rate Assets Loans and leases$ 33,166,049 $ 324,891 3.89 %$ 31,635,958 $ 326,618 4.10 % Investment securities: U.S. Treasury - - - 206,575 679 1.32 Government agency 839,614 1,966 0.94 657,405 1,428 0.87 Mortgage-backed securities 8,968,779 25,273 1.13 7,555,947 28,532 1.51 Corporate bonds 612,516 7,806 5.10 299,250 3,782 5.06 Other investments 113,439 426 1.51 209,290 2,236 4.30 Total investment securities 10,534,348 35,471 1.35 8,928,467 36,657 1.64 Overnight investments 7,819,287 2,105 0.11 2,231,356 553 0.10 Total interest-earning assets 51,519,684 362,467 2.80 42,795,781 363,828 3.38 Cash and due from banks 364,303 404,517 Premises and equipment 1,242,700 1,260,566 Allowance for credit losses (211,913) (209,973) Other real estate owned 46,074 55,554 Other assets 1,438,483 1,247,057 Total assets$ 54,399,331 $ 45,553,502 Liabilities Interest-bearing deposits: Checking with interest$ 10,952,753 $ 1,504 0.06 %$ 8,562,145 $ 1,310 0.06 % Savings 3,796,686 326 0.03 2,846,557 312 0.04 Money market accounts 9,581,775 2,634 0.11 7,618,883 6,519 0.34 Time deposits 2,672,900 4,078 0.61 3,398,979 9,775 1.16 Total interest-bearing deposits 27,004,114 8,542 0.13 22,426,564 17,916
0.32
Securities sold under customer repurchase agreements 677,451 356 0.21 659,244 399 0.24 Other short-term borrowings - - - 45,549 248 2.16 Long-term borrowings 1,227,755 6,534 2.12 1,275,928 7,300 2.26 Total interest-bearing liabilities 28,909,320 15,432 0.21 24,407,285 25,863
0.42
Noninterest-bearing deposits 20,746,989 16,719,851 Other liabilities 344,849 438,141 Shareholders' equity 4,398,173 3,988,225 Total liabilities and shareholders' equity$ 54,399,331 $ 45,553,502 Interest rate spread 2.59 % 2.96 % Net interest income and net yield on interest-earning assets$ 347,035 2.68 %$ 337,965 3.14 % Loans and leases include PCD loans, non-PCD loans, nonaccrual loans and loans held for sale. Yields related to loans, leases and securities exempt from both federal and state income taxes, federal income taxes only, or state income taxes only are stated on a taxable-equivalent basis assuming a statutory federal income tax rate of 21.0%, as well as a blended state income tax rate of 3.3% and 3.4%, for the three months endedJune 30, 2021 and 2020, respectively. The taxable-equivalent adjustment was$642 thousand and$571 thousand for the three months endedJune 30, 2021 and 2020, respectively. 41 -------------------------------------------------------------------------------- Table of Contents Table 4 CONSOLIDATED YEAR-TO-DATE AVERAGE TAXABLE-EQUIVALENT BALANCE SHEETS Six months ended June 30 2021 2020 Interest Interest Average Income/ Yield/ Average Income/ Yield/ (Dollars in thousands) Balance Expense Rate Balance Expense Rate Assets Loans and leases$ 33,126,572 $ 648,493 3.91 %$ 30,367,030 $ 652,774 4.27 % Investment securities: U.S. Treasury 190,591 172 0.18 253,176 2,356 1.87 Government agency 815,587 3,865 0.95 689,330 5,548 1.61 Mortgage-backed securities 8,428,730 45,880 1.09 6,808,190 59,239 1.74 Corporate bonds 607,726 15,548 5.12 252,377 6,259 4.96 Other investments 105,510 898 1.72 187,740 2,914 3.12 Total investment securities 10,148,144 66,363 1.31 8,190,813 76,316 1.86 Overnight investments 6,850,512 3,553 0.10 1,842,218 5,071 0.55 Total interest-earning assets 50,125,228 718,409 2.86 40,400,061 734,161 3.62 Cash and due from banks 348,772 352,475 Premises and equipment 1,247,097 1,256,268 Allowance for credit losses (217,928) (198,621) Other real estate owned 47,325 54,455 Other assets 1,362,247 1,236,516 Total assets$ 52,912,741 $ 43,101,154 Liabilities Interest-bearing deposits: Checking with interest$ 10,850,059 $ 2,913 0.05 %$ 8,375,564 $ 3,011 0.07 % Savings 3,630,158 625 0.03 2,720,213 597 0.04 Money market accounts 9,296,667 5,142 0.11 7,317,735 15,628 0.43 Time deposits 2,738,743 8,655 0.64 3,580,097 22,874 1.28 Total interest-bearing deposits 26,515,627 17,335 0.13 21,993,609 42,110
0.39
Securities sold under customer repurchase agreements 659,444 694 0.21 566,737 841 0.30 Other short-term borrowings - - - 101,654 1,052 2.05 Long-term borrowings 1,231,643 13,074 2.12 1,118,042 13,019 2.30 Total interest-bearing liabilities 28,406,714 31,103 0.22 23,780,042 57,022
0.48
Noninterest-bearing deposits 19,797,015 14,954,629 Other liabilities 372,324 531,053 Shareholders' equity 4,336,688 3,835,430 Total liabilities and shareholders' equity$ 52,912,741 $ 43,101,154 Interest rate spread 2.64 % 3.14 % Net interest income and net yield on interest-earning assets$ 687,306 2.74 %$ 677,139 3.33 % Loans and leases include PCD loans, non-PCD loans, nonaccrual loans and loans held for sale. Yields related to loans, leases and securities exempt from both federal and state income taxes, federal income taxes only, or state income taxes only are stated on a taxable-equivalent basis assuming a statutory federal income tax rate of 21.0%, as well as a blended state income tax rate of 3.3% and 3.4%, for the six months endedJune 30, 2021 and 2020, respectively. The taxable-equivalent adjustment was$1.3 million and$1.3 million for the six months endedJune 30, 2021 and 2020, respectively. 42
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