First Citizens BancShares projects $6 billion to $8 billion in note prepayments

First Citizens BancShares expects to make between $6 billion and $8 billion in prepayments during the third quarter on a note owed to the Federal Deposit Insurance Corporation (FDIC). This liquidity is expected to be driven by the bank's recent acquisition of 138 BMO Bank N.A. branches, which added approximately $5 billion in deposits and $650 million in loans.

The note was originally issued as part of the 2023 acquisition of Silicon Valley Bridge Bank. Following a $1 billion prepayment in July, the bank's ability to pay down the debt is supported by growing deposits, which reached approximately $185.26 billion in the previous quarter.

Financial outlooks for the third quarter include projected net interest income between $1.63 billion and $1.71 billion. While the bank has seen growth in total loans and deposits, net interest margins have faced slight pressure due to higher costs for deposits.