FIRST CITIZENS BANCSHARES INC /DE/FCNCA
FIRST CITIZENS BANCSHARES INC /DE/ Leases Disclosure
NOTE 7 — LEASES
Lessee
BancShares’ leases primarily include administrative offices and bank locations. Substantially all of our operating lease liabilities relate to United States real estate leases. Our finance lease liabilities relate to equipment leases, including the lease of certain ATMs. Our real estate leases have remaining lease terms of up to 32 years. Our lease terms may include options to extend or terminate the lease, and our operating leases have renewal terms that can extend from 1 to 25 years. The options are included in the lease term when it is determined that it is reasonably certain the option will be exercised.
The following table presents supplemental balance sheet information and remaining weighted average lease terms and discount rates:
Supplemental Lease Information
| dollars in millions | Classification | December 31, 2025 | December 31, 2024 | ||||||||||||||
| Lease assets: | |||||||||||||||||
| Operating lease ROU assets | $ | 294 | $ | 316 | |||||||||||||
| Finance leases | 71 | 15 | |||||||||||||||
| Total lease assets | $ | 365 | $ | 331 | |||||||||||||
| Lease liabilities: | |||||||||||||||||
| Operating leases | $ | 329 | $ | 357 | |||||||||||||
| Finance leases | 72 | 15 | |||||||||||||||
| Total lease liabilities | $ | 401 | $ | 372 | |||||||||||||
| Weighted-average remaining lease terms: | |||||||||||||||||
| Operating leases | 7.2 years | 7.4 years | |||||||||||||||
| Finance leases | 7.7 years | 11.7 years | |||||||||||||||
| Weighted-average discount rate: | |||||||||||||||||
| Operating leases | 3.10 | % | 2.94 | % | |||||||||||||
| Finance leases | 4.20 | 3.96 | |||||||||||||||
As of December 31, 2025, there were no leases that have not yet commenced that would have a material impact on BancShares’ consolidated financial statements.
The following table presents components of lease cost:
Components of Net Lease Cost
| dollars in millions | Year Ended December 31, | ||||||||||||||||||||||
| Classification | 2025 | 2024 | 2023 | ||||||||||||||||||||
Operating lease cost | Occupancy expense | $ | 72 | $ | 76 | $ | 64 | ||||||||||||||||
| Finance lease ROU asset amortization | Equipment expense | 9 | 2 | 2 | |||||||||||||||||||
| Interest on lease liabilities | Interest expense - other borrowings | 2 | — | — | |||||||||||||||||||
Variable lease cost (1) | Occupancy expense | 22 | 28 | 25 | |||||||||||||||||||
| Sublease income | Occupancy expense | (6) | (6) | (3) | |||||||||||||||||||
Net lease cost (1) | $ | 99 | $ | 100 | $ | 88 | |||||||||||||||||
(1) Includes short-term lease cost.
Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term.
For finance leases, the ROU asset is amortized straight-line over the lease term as equipment expense and interest on the lease liability is recognized separately.
Variable lease cost includes common area maintenance, property taxes, utilities, and other operating expenses related to leased premises recognized in the period in which the expense was incurred. Certain of our lease agreements also include rental payments adjusted periodically for inflation. While lease liabilities are not remeasured because of these changes, these adjustments are treated as variable lease costs and recognized in the period in which the expense is incurred.
Sublease income results from leasing excess building space that BancShares is no longer utilizing under operating leases, which have remaining lease terms of up to 11 years.
The following table presents supplemental cash flow information related to leases:
Supplemental Cash Flow Information
| dollars in millions | Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows from operating leases | $ | 77 | $ | 77 | $ | 63 | |||||||||||
| Operating cash flows from finance leases | 2 | — | — | ||||||||||||||
| Financing cash flows from finance leases | 8 | 2 | 2 | ||||||||||||||
| ROU assets obtained in exchange for new operating lease liabilities | 48 | 28 | 69 | ||||||||||||||
| ROU assets obtained in exchange for new finance lease liabilities | 64 | 8 | 4 | ||||||||||||||
The following table presents lease liability maturities at December 31, 2025:
Maturity of Lease Liabilities
| dollars in millions | Operating Leases | Finance Leases | Total | ||||||||||||||
| 2026 | $ | 67 | $ | 14 | $ | 81 | |||||||||||
| 2027 | 62 | 12 | 74 | ||||||||||||||
| 2028 | 48 | 12 | 60 | ||||||||||||||
| 2029 | 42 | 12 | 54 | ||||||||||||||
| 2030 | 35 | 12 | 47 | ||||||||||||||
| Thereafter | 110 | 23 | 133 | ||||||||||||||
| Total undiscounted lease payments | 364 | 85 | 449 | ||||||||||||||
| Difference between undiscounted cash flows and discounted cash flows | 35 | 13 | 48 | ||||||||||||||
| Lease liabilities, at present value | $ | 329 | $ | 72 | $ | 401 | |||||||||||
Lessor
BancShares leases equipment to commercial end-users under operating lease and finance lease arrangements. The majority of operating lease equipment is long-lived rail equipment, which is typically leased several times over its life. We also lease technology and office equipment, and large and small industrial, medical, and transportation equipment under both operating leases and finance leases.
Our Rail operating leases typically do not include purchase options. Many of our finance leases, and other equipment operating leases, offer the lessee the option to purchase the equipment at fair market value or for a nominal fixed purchase option. Many of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond the initial contractual term. Our leases typically do not include early termination options. Continued rent payments are due if leased equipment is not returned at the end of the lease.
The following table includes the net book value of operating lease equipment by equipment type, net of accumulated depreciation of $1.18 billion and $941 million at December 31, 2025 and December 31, 2024, respectively.
Operating Lease Equipment
| dollars in millions | December 31, 2025 | December 31, 2024 | |||||||||
Railcars and locomotives (1) | $ | 8,882 | $ | 8,573 | |||||||
| Other equipment | 739 | 750 | |||||||||
Total (1) | $ | 9,621 | $ | 9,323 | |||||||
The following table presents the components of the finance lease net investment on a discounted basis:
Components of Net Investment in Finance Leases
| dollars in millions | December 31, 2025 | December 31, 2024 | |||||||||
| Lease receivables | $ | 1,827 | $ | 1,764 | |||||||
| Unguaranteed residual assets | 209 | 235 | |||||||||
| Total net investment in finance leases | 2,036 | 1,999 | |||||||||
Leveraged lease net investment (1) | 17 | 15 | |||||||||
Total (2) | $ | 2,053 | $ | 2,014 | |||||||
(1) Leveraged leases are reported net of non-recourse debt of $1 million at December 31, 2025 and $2 million at December 31, 2024. Our leveraged lease arrangements commenced before the ASC 842, Leases, effective date of January 1, 2019, and continue to be reported under the leveraged lease accounting model. ASC 842 eliminated leveraged lease accounting for new leases and for existing leases modified on or after the January 1, 2019.
(2) Included in commercial and industrial in Note 5—Loans and Leases.
The following table presents lease income related to BancShares’ equipment leases:
Lease Income
| dollars in millions | Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Lease income – operating leases | $ | 1,037 | $ | 966 | $ | 895 | |||||||||||
Variable lease income – operating leases (1) | 59 | 82 | 76 | ||||||||||||||
| Rental income on operating leases | 1,096 | 1,048 | 971 | ||||||||||||||
| Interest income – sales type and direct financing leases | 175 | 175 | 171 | ||||||||||||||
Variable lease income included in other noninterest income (2) | 58 | 61 | 59 | ||||||||||||||
| Interest income – leveraged leases | 3 | 4 | 12 | ||||||||||||||
| Total lease income | $ | 1,332 | $ | 1,288 | $ | 1,213 | |||||||||||
(1) Primarily includes per diem railcar operating lease rental income earned on a time or mileage usage basis.
(2) Includes revenue related to insurance coverage on leased equipment and leased equipment property tax reimbursements due from customers.
The following tables present lease payments due on non-cancellable equipment operating leases and lease receivables due on finance leases at December 31, 2025. Excluded from these tables are variable lease payments, including rentals calculated based on asset usage levels, rentals from future renewal and re-leasing activity, and expected sales proceeds from remarketing equipment at lease expiration, all of which are components of lease profitability.
Maturity Analysis of Operating Lease Payments
| dollars in millions | |||||
| 2026 | $ | 864 | |||
| 2027 | 721 | ||||
| 2028 | 547 | ||||
| 2029 | 364 | ||||
| 2030 | 216 | ||||
| Thereafter | 349 | ||||
| Total | $ | 3,061 | |||
Maturity Analysis of Lease Receivable Payments - Sales Type and Direct Financing Leases
| dollars in millions | |||||
| 2026 | $ | 739 | |||
| 2027 | 568 | ||||
| 2028 | 394 | ||||
| 2029 | 234 | ||||
| 2030 | 84 | ||||
| Thereafter | 45 | ||||
| Total undiscounted lease receivables | $ | 2,064 | |||
| Difference between undiscounted cash flows and discounted cash flows | 237 | ||||
| Lease receivables, at present value | $ | 1,827 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 20, 2019 | |
| 2017 | Feb 21, 2018 | |
| 2016 | Feb 22, 2017 | |
| 2015 | Feb 24, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.