Company: FCNCB
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000798941-25-000024
Chunk: 237

Company: FIRST CITIZENS BANCSHARES INC /DE/
Filing Date: 2025-05-09
Form: 10-Q
Item: Item 8
Chunk 237
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 expense, net of depreciation and maintenance, revenue, net of depreciation and maintenance, and PPNR are non-GAAP measures. Refer to the “Non-GAAP Financial Measurements” section of this MD&A for a reconciliation from the most comparable GAAP measure to the non-GAAP measure.  

(2) Total noninterest income and total noninterest expense include depreciation and maintenance on operating lease equipment. 

Rail segment net income, rental income on operating leases and net rental income on operating lease equipment are utilized to measure profitability. Net rental income on operating lease equipment is calculated as rental income on operating lease equipment reduced by depreciation, maintenance and other operating lease expenses. Due to the nature of our portfolio, which is essentially all operating lease equipment, certain financial measures commonly used by banks, such as NII, are not as meaningful for this segment. NII is not used because it includes the impact of debt costs funding our operating lease assets but excludes the associated net rental income. 

Rail segment net income for the Current Quarter decreased $9 million and PPNR decreased $10 million compared to the Linked Quarter. The decreases were mostly due to lower gains on sales of equipment on operating lease and net rental income. Net rental income on operating lease equipment decreased $3 million compared to the Linked Quarter. The decrease reflected lower rental income, mainly the result of the Linked Quarter including charges that are assessed annually, which were partially offset by strong repricing of renewed equipment during the Current Quarter. Lower depreciation was offset by higher maintenance costs. Depreciation on operating lease equipment decreased $3 million, primarily due to higher residual review adjustments on rail assets in the Linked Quarter, which offset the fleet additions. Maintenance and other operating lease expenses increased $3 million. Maintenance and other operating lease expenses tend to be variable due to timing and the number of railcars coming on or off lease as well as asset condition.

All other noninterest income primarily reflects net gains on sale of leasing equipment, which can vary due to the type of cars sold, volume sold, and market conditions.  

Our fleet is diverse and the average re-pricing of equipment upon lease maturities was 126.0% of the average prior or expiring lease rate during the Current Quarter. Railcar utilization, including commitments to lease, was 97.0% at March 31, 2025 and 97.6% at December 31, 2024. 

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Portfolio

Rail segment customers include all of the U.S. and Canadian Class I railroads (i