Company: FCNCB
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000798941-25-000010
Chunk: 161

Company: FIRST CITIZENS BANCSHARES INC /DE/
Filing Date: 2025-02-21
Form: 10-K
Item: Item 8
Chunk 161
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angibleThe following table presents the core deposit intangible recorded related to the valuation of core deposits:  Core Deposit Intangibledollars in millionsFair ValueEstimated Useful Life at SVBB Acquisition DateAmortization MethodCore deposit intangible$230 8 yearsEffective yieldCertain core deposits were acquired as part of the SVBB Acquisition, which provide an additional source of funds for BancShares. The core deposit intangible represents the costs saved by BancShares by acquiring the core deposits rather than sourcing the funds elsewhere. This intangible was valued using the after tax cost savings method under the income approach. This method estimated the fair value by discounting to present value the favorable funding spread attributable to the core deposit balances over their estimated average remaining life. The valuation considered a dynamic approach to interest rates and alternative cost of funds. The favorable funding spread was calculated as the difference in the alternative cost of funds and the net deposit cost. Refer to further detail in Note 8—Goodwill and Core Deposit Intangibles.

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Other assets The following table details other assets acquired: Other Assetsdollars in millionsFair ValueAccrued interest receivable$431Federal Home Loan Bank stock and Federal Reserve Bank stock320Fair value of derivative financial instruments458Other355 Total other assets$1,564The fair values of the derivative assets in the table above and derivative liabilities in the table below were valued using prices of financial instruments with similar characteristics and observable inputs. The fair values of accrued interest receivable and the remaining other assets were determined to approximate book value.  DepositsAcquired deposits were essentially all transactional deposits. Thus, we determined carrying amounts approximated fair value. Deferred tax liabilityThe SVBB Acquisition was an asset acquisition for tax purposes and therefore was considered a taxable transaction. The deferred tax liability of $3.36 billion for the SVBB Acquisition was calculated by applying FCB’s deferred tax rate to the book and tax basis differences on the SVBB Acquisition Date for acquired assets and assumed liabilities. Deferred taxes were not recorded for the affordable housing tax credit investments in accordance with the PAM.The tax treatment of FDIC-assisted acquisitions is complex and subject to interpretations that may result in future adjustments of deferred taxes. Other liabilitiesThe following table details other liabilities assumed:dollars in millionsFair ValueCommitments to fund tax credit investments$715Fair value of derivative financial instruments497 Reserve for off-balance sheet credit exposures253 Accrued interest payable109 Other461 Total other liabilities$2,035The fair value