EXHIBIT 99.1
First Citizens BancShares Reports Earnings for 2009
RALEIGH, N.C., Jan. 25, 2010 (GLOBE NEWSWIRE) -- First Citizens BancShares Inc. (Nasdaq:FCNCA) reports earnings for 2009 of $115.6 million, or $11.08 per share, compared to $91.1 million, or $8.73 per share, earned during 2008, according to Frank B. Holding, Jr., chairman of the board. Net income as a percentage of average assets equaled 0.66 percent during 2009, compared to 0.56 percent during 2008. The return on average equity was 7.88 percent for 2009, compared to 6.13 percent for 2008. Results for 2009 include after-tax gains of $63.0 million related to the Federal Deposit Insurance Corporation (FDIC) assisted acquisitions of assets and liabilities of Temecula Valley Bank in Temecula, California and Venture Bank in Lacey, Washington. The gains resulted from the excess of the fair value of the recorded assets over the fair value of the liabilities assumed. Net income during 2009 also reflected improved net interest income, higher noninterest expense and additional provision for loan and lease losses.
Net interest income during 2009 increased $12.1 million, or 2.4 percent, versus 2008. Average interest-earning assets grew $974.8 million, or 6.6 percent, during 2009, much of which resulted from the acquisitions. However, the impact of low interest rates offset the benefit of asset growth. As a result, the taxable-equivalent net yield on interest-earning assets fell 15 basis points to 3.25 percent during 2009, when compared to 2008.
The provision for loan and lease losses increased $11.1 million, or 16.8 percent, during 2009. Net charge-offs for 2009 totaled $64.7 million, compared to $45.3 million recorded during the same period of 2008. Higher 2009 net charge-offs of noncovered loans were primarily noted in the commercial, unsecured revolving credit, and revolving residential mortgage loan portfolios. The ratio of net charge-offs to average loans and leases not covered by FDIC loss-share agreements in 2009 equaled 0.56 percent, compared to 0.40 percent for the prior year.
The gain recognized on the acquisitions totaled $103.5 million during 2009. Other noninterest income declined $11.1 million, or 3.5 percent, during 2009. The general economic conditions resulted in reductions in service charge, cardholder, merchant services and wealth advisory services income during 2009. However, as a result of rate-induced refinance activity, mortgage income increased during 2009.
Noninterest expense increased $51.2 million, or 8.4 percent, during 2009. Significantly contributing to that increase was the $24.2 million increase in FDIC deposit insurance expense. Costs related to the maintenance, writedown and resolution of other real estate owned increased $11.4 million during 2009, approximately $5.5 million of which relates to assets covered under loss-share agreements. Salaries and wages increased $5.1 million, or 2.0 percent, during 2009, primarily due to acquisitions. Benefit costs were up $5.5 million, or 9.3 percent, for the year as health insurance and pension costs continue to escalate. Occupancy costs grew $5.4 million, or 8.9 percent, due partly to acquired branches.
Under the purchase and assumption agreements with the FDIC, First Citizens received cash, investments securities, loans, foreclosed real estate, deposits and borrowings. The acquired loans and foreclosed real estate are covered by loss-share agreements with the FDIC that provide significant loss protection to First Citizens. As of December 31, 2009, First Citizens had $1.27 billion of covered assets, $174.5 million of which were nonperforming. Noncovered assets that are nonperforming as of December 31, 2009, totaled $103.8 million, compared to $71.7 million on December 31, 2008, an increase of 44.8 percent, primarily due to continuing weakness in the residential construction portfolio in the Atlanta, Georgia, and southwest Florida markets.
For the quarter ending December 31, 2009, First Citizens reported net income of $18.2 million, compared to $12.9 million for the corresponding period of 2008. Improved earnings during the fourth quarter 2009 resulted from significantly higher net interest income, improved noninterest income, and lower provision for loan and lease losses. Noninterest expense increased due to operating costs related to the acquisitions, FDIC insurance expense and foreclosure-related expenses.
Per share income for the fourth quarter 2009 totaled $1.75, compared to $1.24 for the same period a year ago. First Citizens' results generated an annualized return on average assets of 0.39percent for the fourth quarter of 2009, compared to 0.31 percent for the fourth quarter of 2008. The annualized return on average equity was 4.73 percent during the current quarter, compared to 3.43 percent for the same period of 2008.
Net interest income increased $18.2 million, or 14.7 percent, during the fourth quarter of 2009. The taxable-equivalent net yield on interest-earning assets improved 21 basis points to 3.49 percent, the result of favorable trends in time deposit costs and the positive impact of yields and rates on acquired loans and assumed deposits. Average loans and leases increased $1.21 billion, or 10.4 percent, during the fourth quarter of 2009, when compared to the same period in 2008, primarily due to the acquisitions. Average interest-bearing liabilities increased $995.8 million, or 8.0, percent over 2008, also substantially due to acquisitions.
The provision for loan and lease losses decreased $3.0 million during the fourth quarter of 2009, down 13.7 percent versus the same period of 2008. Net charge-offs equaled $14.6 million during the fourth quarter of 2009, compared to $18.0 million during the fourth quarter of 2008. The annualized ratio of net charge-offs to average noncovered loans and leases equaled 0.50 percent during the fourth quarter of 2009, versus 0.62 percent during the same period of 2008.
During the fourth quarter, adjustments to the initial fair values of acquired assets and assumed liabilities resulted in a $1.5 million reduction in the acquisition gains. Other noninterest income increased $7.8 million, or 10.8 percent, during the fourth quarter of 2009. The increase resulted primarily from the $4.4 million gain on the sale of the corporate bond trustee business. Noninterest expense increased $18.4 million during the fourth quarter of 2009. This 11.8 percent increase resulted primarily from higher personnel expenses and operating costs related to the acquired branches, a $4.7 million increase in foreclosure-related expenses and a $3.0 million increase in FDIC insurance expense.
As of December 31, 2009, First Citizens had total assets of $18.5 billion. First Citizens BancShares' subsidiaries, First Citizens Bank and IronStone Bank, provide a broad range of financial services to individuals, businesses, professionals and the medical community through a network of 430 branch offices, telephone banking, online banking and ATMs. For more information, visit First Citizens' Web site at firstcitizens.com.
This news release may contain forward-looking statements. A discussion of factors that could cause First Citizens' actual results to differ materially from those expressed in such forward-looking statements is included in First Citizens' filings with the SEC.
CONDENSED STATEMENTS OF INCOME |
| | Three Months Ended
December 31 |
Year Ended December 31 |
| (thousands, except share data; unaudited) | 2009 | 2008 | 2009 | 2008 |
| Interest income | $191,976 | $195,366 | $738,159 | $813,351 |
| Interest expense | 49,575 | 71,211 | 227,644 | 314,945 |
| Net interest income | 142,401 | 124,155 | 510,515 | 498,406 |
| Provision for loan and lease losses | 19,117 | 22,142 | 76,864 | 65,805 |
| Net interest income after provision for loan and lease losses | 123,284 | 102,013 | 433,651 | 432,601 |
| Gain on acquisitions | (1,465) | -- | 103,505 | -- |
| Other noninterest income | 79,994 | 72,182 | 302,361 | 313,484 |
| Noninterest expense | 174,164 | 155,800 | 657,652 | 606,481 |
| Income before income taxes | 27,649 | 18,395 | 181,865 | 139,604 |
| Income taxes | 9,400 | 5,502 | 66,285 | 48,546 |
| Net income | $18,249 | $12,893 | $115,580 | $91,058 |
| Taxable-equivalent net interest income | $143,445 | $125,762 | $515,446 | $505,134 |
| Net income per share | $1.75 | $1.24 | $11.08 | $8.73 |
| Cash dividends per share | 0.300 | 0.275 | 1.20 | 1.10 |
| Profitability Information (annualized) | | | | |
| Return on average assets | 0.39% | 0.31% | 0.66% | 0.56% |
| Return on average equity | 4.73 | 3.43 | 7.88 | 6.13 |
| Taxable-equivalent net yield on interest-earning assets | 3.49 | 3.28 | 3.25 | 3.40 |
CONDENSED BALANCE SHEETS |
| (thousands, except share data; unaudited) | December 31
2009 | December 31
2008 |
Change | |
| Cash and due from banks | $480,242 | $593,375 | -19.07% | |
| Investment securities | 2,932,765 | 3,225,194 | -9.07% | |
| Loans covered under FDIC loss share agreements | 1,158,520 | -- | -- | |
| Loans and leases not covered under FDIC loss share agreements | 11,644,997 | 11,649,886 | -0.04% | |
| Allowance for loan and lease losses | (169,782) | (157,569) | 7.75% | |
| FDIC receivable for loss share agreements | 243,857 | -- | -- | |
| Other assets | 2,174,233 | 1,434,776 | 51.54% | |
| Total assets | $18,464,832 | $16,745,662 | 10.27% | |
| Deposits | $15,337,570 | $13,713,763 | 11.84% | |
| Other liabilities | 1,568,898 | 1,588,524 | -1.24% | |
| Shareholders' equity | 1,558,364 | 1,443,375 | 7.97% | |
| Total liabilities and shareholders' equity | $18,464,832 | $16,745,662 | 10.27% | |
| Book value per share | $149.35 | $138.33 | 7.97% | |
| Tangible book value per share | 138.90 | 128.13 | 8.41% | |
SELECTED AVERAGE BALANCES |
| | Three Months Ended
December 31 |
Year Ended December 31 |
| (thousands, except shares outstanding; unaudited) | 2009 | 2008 | 2009 | 2008 |
| Total assets | $18,386,775 | $16,741,696 | $17,557,484 | $16,403,717 |
| Investment securities | 3,134,971 | 3,147,906 | 3,412,620 | 3,113,887 |
| Loans and leases | 12,877,150 | 11,665,522 | 12,062,954 | 11,306,900 |
| Interest-earning assets | 16,319,612 | 15,247,645 | 15,846,515 | 14,871,671 |
| Deposits | 15,291,720 | 13,544,762 | 14,578,868 | 13,108,246 |
| Interest-bearing liabilities | 13,467,531 | 12,471,757 | 13,013,236 | 12,312,499 |
| Shareholders' equity | $1,531,369 | $1,497,619 | $1,465,953 | $1,484,605 |
| Shares outstanding | 10,434,453 | 10,434,453 | 10,434,453 | 10,434,453 |
ASSET QUALITY |
| (dollars in thousands; unaudited) | December 31
2009 | December 31
2008 |
Change | |
| Nonaccrual loans covered under FDIC loss share agreements | $63,984 | $-- | -- | |
| Nonaccrual loans and leases not covered under FDIC loss share agreements | 58,417 | 39,361 | 48.41% | |
| Other real estate covered under FDIC loss share agreements | 110,525 | -- | -- | |
| Other real estate not covered under FDIC loss share agreements | 40,607 | 29,956 | 35.56% | |
| Troubled debt restructurings | 4,744 | 2,349 | 101.96% | |
| Total nonperforming assets | $278,277 | $71,666 | 288.30% | |
| Net charge-offs of noncovered loans and leases | 64,651 | 45,331 | 42.62% | |
| Ratio of nonperforming assets to loans, leases and other real estate: | | | |
| Covered under FDIC loss share agreements | 13.75 | -- | | |
| Not covered under FDIC loss share agreements | 0.89 | 0.61 | | |
| Total | 2.15 | 0.61 | | |
| Allowance for loan and leases losses to loans and leases not covered under loss share agreements | 1.46 | 1.35 | | |
| Net charge-offs to average loans and leases not covered under loss share agreements | 0.56 | 0.40 | | |
CAPITAL INFORMATION |
| (dollars in thousands; unaudited) | December 31
2009 | December 31
2008 |
Change | |
| Tier 1 capital | $1,751,906 | $1,649,675 | 6.20% | |
| Total capital | 2,047,160 | 1,935,993 | 5.74% | |
| Risk-weighted assets | 13,135,537 | 12,499,545 | 5.09% | |
| Tier 1 capital ratio | 13.34% | 13.20% | | |
| Total capital ratio | 15.58 | 15.49 | | |
| Leverage capital ratio | 9.54 | 9.88 | | |
CONTACT: First Citizens BancShares, Inc.
Barbara Thompson
(919) 716-2716
