First Citizens Loan Book Grows $6.2 Billion as Bank Reports Lower Nonaccrual Loans

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First Citizens BancShares added more than $6 billion in loans during the third quarter, most of it in commercial banking, while reporting a decline in loans no longer accruing interest.

The Raleigh, North Carolina-based institution said loans and leases reached $157.19 billion at September 30, up $6.16 billion, or 4.1%, from June. According to its October 23 earnings release, $5.48 billion of that growth came from the Commercial Bank segment, concentrated in fund banking. Another $633 million came from General Bank activity, largely associated with the BMO branch acquisition.

Those figures are bank-wide loan balances. They should not be described as residential mortgage originations or treated as evidence of a comparable increase in new home lending.

Credit measures improve despite larger balances

Nonaccrual loans fell to $1.37 billion, or 0.87% of total loans, from $1.45 billion, or 0.96%, at the end of June. Net charge-offs declined to $103 million from $108 million. The allowance for loan and lease losses stood at $1.44 billion, down from $1.48 billion.

The quarterly provision for loan and lease losses increased to $50 million from $34 million. That increase occurred despite improving reported credit metrics because the prior quarter had a larger reserve release, and the latest quarter included a reserve for loans acquired from BMO. Reserve movements are accounting judgments informed by expected losses and portfolio composition; they do not establish the performance of every commercial property or borrower.

First Citizens said its recent loan growth was concentrated in capital call lines, which it described as having lower loss rates than other parts of its portfolio. That concentration is important. A larger commercial banking book does not necessarily mean more office, retail or apartment loans, and the earnings release does not break the $5.48 billion increase into those property categories.

Acquisition adds branches and deposits

On September 4, First Citizens completed its previously announced purchase of 138 branches from BMO Bank in the Midwest, Great Plains and western United States. It assumed about $4.9 billion in deposits and acquired roughly $650 million in loans in the transaction. WRE previously covered the branch acquisition; the new development is the bank’s first quarter-end balance-sheet report after closing.

Total deposits reached $185.26 billion, up $11.84 billion from June. The bank also held $44.88 billion in investment securities, including purchases concentrated in Treasury and agency mortgage-backed securities. Those securities are investments on the bank’s balance sheet, distinct from loans it originated to homebuyers.

Third-quarter net income was $606 million, down from $672 million in the second quarter. Net interest income increased $43 million to $1.70 billion, while the net interest margin slipped three basis points to 3.07%. Management also announced a new authorization to repurchase up to $1.2 billion of Class A shares through 2027.

For real estate lenders, the report offers a look at how a large bank is allocating capital during a period of expensive credit: commercial fund financing and securities holdings expanded while reported nonaccrual balances improved. The release does not provide enough property-specific data to draw conclusions about the bank’s exposure to any single commercial real estate market.

Source: First Citizens BancShares third-quarter results, October 23, 2026. Featured image: Peter Ivey-Hansen / Unsplash, illustrative commercial building unrelated to bank-owned property.