SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 28,2003
First Citizens BancShares, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-16471 56-1528994
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(State or other jurisdiction (Commission (IRS Employer Identification
of incorporation) File Number) Number)
3128 Smoketree Court; Raleigh, North Carolina 27604
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(Addreess of principal exectuive offices) (Zip Code)
Registrant's phone number including area code: 919-716-7000
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Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following exhibit is being filed with this Report:
Exhibit No. Exhibit Description
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99 Copy of press release dated April 28, 2003
Item 9. Regulation FD Disclosure (Being furnished under both Item 9 and
Item 12).
At Registrant's annual meeting of shareholders held on April 28, 2003,
Registrant announced its results of operations for the quarter ended March 31,
2003. A copy of Registrant's press release issued following the annual meeting
is attached as Exhibit 99 to this Report and is incorporated by reference into
this Report.
Disclosures About Forward Looking Statements
The discussions included in this Report and its exhibits may contain forward
looking statements within the meaning of the Private Securities Litigation Act
of 1995, including Section 21E of the Securities Exchange Act of 1934 and
Section 27A of the Securities Act of 1933. Such statements involve known and
unknown risks, uncertainties and other factors that may cause actual results to
differ materially. For the purposes of these discussions, any statements that
are not statements of historical fact may be deemed to be forward looking
statements. Such statements are often characterized by the use of qualifying
words such as "expects," "anticipates," "believes," "estimates," "plans,"
"projects," or other statements concerning opinions or judgments of the
Registrant and its management about future events. The accuracy of such forward
looking statements could be affected by such factors as, including but not
limited to, the financial success or changing conditions or strategies of the
Registrant's customers or vendors, fluctuations in interest rates, actions of
government regulators, the availability of capital and personnel or general
economic conditions.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, Registrant has duly caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized.
First Citizens BancShares, Inc.
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(Registrant)
Date: April 28, 2003 By: /S/ Kenneth A. Black
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Kenneth A. Black
Vice President
For Immediate Release Contact: Barbara Thompson
April 28, 2003 First Citizens Bank
(919) 716-2716
FIRST CITIZENS REPORTS EARNINGS FOR FIRST QUARTER 2003
RALEIGH, N.C. - First Citizens BancShares Inc. (Nasdaq: FCNCA) reports earnings
for the quarter ending March 31, 2003, of $18.3 million compared to $24.8
million for the corresponding period of 2002, a decrease of 26.3 percent,
according to Lewis R. Holding, chairman of the board.
Per share income for the first quarter 2003 totaled $1.75 compared to $2.37 for
the same period a year ago. First Citizens' current quarter results generated an
annualized return on average assets of 0.62 percent and an annualized return on
average equity of 7.61 percent, compared to respective returns of 0.86 percent
and 11.25 percent for the same period of 2002.
The decline in net income for the first quarter was the result of reductions in
net interest income and higher noninterest expenses. Net interest income
decreased $8.1 million or 8.3 percent from the same period of 2002. The adverse
impact of declining interest rates on the high levels of short-term,
interest-sensitive liquidity more than offset the favorable impact of balance
sheet growth. First Citizens consistently maintains a balance sheet structure
that emphasizes liquidity. The taxable-equivalent yield on interest earning
assets fell from 6.12 percent during the first quarter of 2002 to 4.95 percent
during the first quarter of 2003, a 117 basis point reduction. Loan yields fell
from 6.99 percent to 6.02 percent, while the taxable-equivalent yield on
investment securities fell from 4.52 percent to 2.60 percent. The lower asset
yields resulted from interest rate reductions triggered by the Federal Reserve
Bank's reductions in key interest rates.
While the rate adjustments also led to lower rates on interest-bearing
liabilities, the decrease in interest expense was less than the decrease in
interest income. The rate on total interest-bearing liabilities fell from 2.64
percent during the first quarter of 2002 to 1.86 percent during the same period
of 2003, a reduction of 78 basis points. As a result of the unfavorable impact
of low market interest rates, the net yield on interest-earning assets fell from
3.81 percent during the first quarter of 2002 to 3.37 percent during 2003.
Noninterest expense was $111.3 million during the first quarter of 2003, an
increase of $4.4 million or 4.1 percent. Salary expense increased $1.5 million
or 3.1 percent over the same period of 2002. Employee benefits expense increased
$942,000 or 8.9 percent over 2002, the continued result of higher pension costs.
Equipment expense increased $1.4 million or 12.9 percent over the same period of
2002 due to higher software related costs.
Noninterest income was $56.4 million during the first quarter of 2003, a $2.2
million or 4.0 percent increase over the same period of 2002. Cardholder and
merchant services income increased $1.4 million or 12.5 percent during 2003.
Income from investment securities sales declined $1.3 million, primarily due to
impairment losses recognized during 2003 on available-for-sale securities.
Service charge income remained constant, while trust income declined from during
2002.
The provision for loan losses was $5.6 million during the first quarter of 2003,
a reduction of $417,000 or 7.0 percent over the same period of 2002. The
reduction in the provision for loan losses resulted from slightly lower loss
estimates. Net charge-offs during the first quarter of 2003 totaled $4.7 million
compared to $4.4 million during the first quarter of 2002. Net charge-offs in
both periods represent 0.25 percent of average loans.
As of March 31, 2003, First Citizens had total assets of $12.39 billion. Two of
BancShares' major subsidiaries are First Citizens Bank with 337 branches in
North Carolina, Virginia and West Virginia, and Atlantic States Bank with 39
branches in Georgia and Florida. Atlantic States' western division, IronStone
Bank, has branches in Texas and Arizona with plans to open this year in
California. For more information, visit First Citizens' web site at
firstcitizens.com.
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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 March 31
(thousands, except per share data; unaudited) 2003 2002
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Interest income $131,074 $156,148
Interest expense 42,158 59,137
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Net interest income 88,916 97,011
Provision for loan losses 5,563 5,980
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Net interest income after provision for loan losses 83,353 91,031
Noninterest income 56,387 54,215
Noninterest expense 111,282 106,906
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Income before income taxes 28,458 38,340
Income taxes 10,164 13,516
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Net income $18,294 $24,824
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Taxable-equivalent net interest income $89,200 $97,382
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Net income per share $1.75 $2.37
Cash dividends per share 0.275 0.250
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Profitability Information (annualized)
Return on average assets 0.62 % 0.86 %
Return on average equity 7.61 11.25
Taxable-equivalent net yield on interest-earning assets 3.37 3.81
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CONDENSED BALANCE SHEETS
March 31 December 31 March 31
(thousands, except per share data; unaudited) 2003 2002 2002
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Cash and due from banks $753,578 $811,657 $709,757
Investment securities 2,362,130 2,539,236 2,576,383
Loans 7,704,492 7,620,263 7,248,088
Reserve for loan losses (113,382) (112,533) (108,692)
Other assets 1,681,923 1,373,267 1,322,442
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Total assets $12,388,741 $12,231,890 $11,747,978
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Deposits $10,594,380 $10,439,620 $9,872,979
Other liabilities 810,726 824,979 967,092
Shareholders' equity 983,635 967,291 907,907
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Total liabilities and shareholders' equity $12,388,741 $12,231,890 $11,747,978
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Book value per share $93.95 $92.36 $86.63
Tangible book value per share 83.39 81.73 76.07
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SELECTED AVERAGE BALANCES
Three Months Ended March 31
(thousands, except shares outstanding; unaudited) 2003 2002
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Total assets $12,054,717 $11,664,376
Investment securities 2,476,426 2,704,077
Loans 7,642,673 7,207,757
Interest-earning assets 10,741,160 10,353,509
Deposits 10,283,143 9,776,690
Interest-bearing liabilities 9,173,567 9,073,637
Shareholders' equity 974,900 $894,689
Shares outstanding 10,472,065 10,481,661
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ASSET QUALITY
March 31 December 31 March 31
(dollars in thousands; unaudited) 2003 2002 2002
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Nonaccrual loans $16,988 $15,521 $17,735
Other real estate 8,155 7,330 12,461
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Total nonperforming assets $25,143 $22,851 $30,196
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Accruing loans 90 days or more past due $7,349 $9,566 $11,012
Nonperforming assets to gross loans plus other real estate 0.33 % % 0.30 0.42 %
Reserve for loan losses to gross loans 1.47 1.48 1.50
Net charge-offs to average total loans (annualized) 0.25 0.29 0.25
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CAPITAL INFORMATION
March 31 December 31 March 31
(dollars in thousands; unaudited) 2003 2002 2002
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Tier 1 capital $1,112,607 $1,096,537 $1,038,574
Total capital 1,222,490 1,204,142 1,142,933
Risk-weighted assets 8,275,456 8,123,321 7,868,529
Tier 1 capital ratio 13.44 % 13.50 % 13.20 %
Total capital ratio 14.77 14.82 14.53
Leverage capital ratio 9.30 9.17 8.99
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2002 data has been restated to reflect the adoption of Statement of Financial
Accounting Standards No. 147, which was adopted during the fourth quarter of
2002 with a retroactive effective date of January 1, 2002.
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