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): October 27,2003
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 October 27, 2003
Item 9. Regulation FD Disclosure (Being furnished under both Item 9 and
Item 12).
On October 27, 2003, Registrant announced its results of operations
for the quarter ended September 30, 2003. A copy of Registrant's press release
issued this date 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: October 27, 2003 By: /S/Kenneth A. Black
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Kenneth A.Black
Vice President
For Immediate Release Contact: Barbara Thompson
October 27, 2003 First Citizens Bank
(919) 716-2716
Corporate Communications Department-CTW11
PO Box 27131 Raleigh, NC 27611-7131
FIRST CITIZENS REPORTS EARNINGS FOR THIRD QUARTER 2003
RALEIGH, N.C. - First Citizens BancShares Inc. (Nasdaq: FCNCA) reports earnings
for the quarter ending Sept. 30, 2003, of $20.3 million compared to $23.8
million for the corresponding period of 2002, a reduction of 14.7 percent,
according to Lewis R. Holding, chairman of the board.
Per share income for the third quarter 2003 totaled $1.94 compared to $2.27 for
the same period a year ago. First Citizens' results generated an annualized
return on average assets of 0.66 percent for the third quarter of 2003, compared
to 0.80 percent for the same period of 2002. The annualized return on average
equity was 8.03 percent during the current quarter, compared to 10.09 percent
for the same period of 2002.
During the third quarter, a reduction in net interest income and higher
noninterest expenses more than offset the favorable impact of improved
noninterest income and lower income tax expense. During the third quarter of
2003, net interest income decreased $5.3 million or 5.5 percent from the same
period of 2002. The reduction in net interest income was due to the unfavorable
impact of lower interest rates on interest-earning assets. The
taxable-equivalent yield on interest-earning assets fell 104 basis points to
4.51 percent during the third quarter of 2003 when compared to the same period
of 2002, while the rate on total interest-bearing liabilities fell 76 basis
points to 1.50 percent. The taxable-equivalent net yield on interest-earning
assets fell from 3.60 percent for the third quarter of 2002 to 3.28 percent for
the third quarter of 2003. Average interest-earning assets increased $401.9
million or 3.8 percent during the third quarter of 2003 when compared to the
same period of 2002.
Noninterest expense increased $10.3 million or 9.5 percent during the third
quarter of 2003. Salary expense increased $3.8 million or 7.9 percent during
2003 due to the continued expansion of Atlantic States Bank's franchise and
higher incentive-based compensation. Employee benefit expense increased $1.3
million or 12.2 percent due to higher pension expense and health insurance
costs. Equipment expense increased $2.0 million or 17.6 percent, the result of
higher depreciation and maintenance costs from continuing technology
investments.
Noninterest income increased $7.6 million or 13.7 percent during the third
quarter, the result of strong refinance activity. Mortgage income increased $2.5
million or 88.7 percent from the third quarter of 2002. Cardholder and merchant
services income increased $1.9 million or 14.5 percent due to favorable volume
growth. Income tax expense during the third quarter was $7.9 million for 2003
and $13.2 million for 2002. The $5.3 million or 39.9 percent reduction was
primarily due to lower pre-tax income and adjustments to valuation reserves for
deferred taxes.
The provision for loan losses increased $761,000 or 13.6 percent from the third
quarter of 2002 to the same period of 2003 due to higher loss estimates
following recent loan growth. Net charge-offs were $4.0 million during the third
quarter of 2003, compared to $4.5 million during the same period of 2002, an
11.1 percent reduction.
For the nine month period ending Sept. 30, 2003, net income was $59.4 million,
or $5.68 per share, compared to $73.4 million, or $7.01 per share earned during
the same period of 2002. Annualized net income for 2003 represents 0.65 percent
of average assets compared to 0.83 percent for 2002. The annualized return on
average equity was 8.02 percent for the first nine months of 2003, compared to
10.72 percent for the same period of 2002.
Year-to-date net interest income for 2003 decreased $20.5 million or 7.1 percent
from the same period of 2002. During 2003, the unfavorable impact of lower
interest rates more than offset the benefit of growth among interest-earning
assets. The taxable-equivalent net yield on interest-earning assets fell from
3.70 percent to 3.32 percent during 2003.
Noninterest income increased $21.4 million or 12.9 percent during the first nine
months of 2003, the result of improved cardholder and merchant services income
and mortgage income. Noninterest income also included a $5.7 million
nonrecurring gain on the sale of branch offices. Noninterest expense increased
$24.9 million or 7.7 percent during the first nine months of 2003, the result of
higher personnel expenses as well as higher equipment and occupancy costs.
For the nine-month period ending Sept. 30, the provision for loan losses was
$19.1 million and $19.4 million for 2003 and 2002, respectively. The reduction
in the provision for loan losses resulted from lower levels of net charge-offs.
Net charge-offs were $13.9 million and $14.9 million during the respective
nine-month periods, a reduction of $1.0 million or 6.8 percent during 2003.
Year-to-date net charge-offs represent 0.24 percent of average loans outstanding
during 2003, compared to 0.27 percent for the same period of 2002.
As of Sept. 30, 2003, First Citizens had total assets of $12.4 billion. First
Citizens Bank has 348 branches in North Carolina, Virginia and West Virginia.
Atlantic States Bank and its western division IronStone Bank have 44 branches in
Georgia, Florida, Texas, Arizona and California. For more information, visit the
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 September 30 Nine Months Ended September 30
(thousands, except share data; unaudited) 2003 2002 2003 2002
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Interest income $ 124,887 $ 147,742 $ 385,134 $ 455,661
Interest expense 34,573 52,127 116,236 166,306
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Net interest income 90,314 95,615 268,898 289,355
Provision for loan losses 6,353 5,592 19,108 19,394
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Net interest income after provision for loan losses 83,961 90,023 249,790 269,961
Noninterest income 63,205 55,571 186,540 165,155
Noninterest expense 118,947 108,614 346,204 321,335
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Income before income taxes 28,219 36,980 90,126 113,781
Income taxes 7,922 13,190 30,763 40,366
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Net income $ 20,297 $ 23,790 $ 59,363 $ 73,415
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Taxable-equivalent net interest income $ 90,568 $ 95,932 $ 269,694 $ 290,388
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Net income per share $ 1.94 $ 2.27 $ 5.68 $ 7.01
Cash dividends per share 0.275 0.250 0.825 0.750
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Profitability Information (annualized)
Return on average assets 0.66 % 0.80 % 0.65 % 0.83 %
Return on average equity 8.03 10.09 8.02 10.72
Taxable-equivalent net yield on interest-earning assets 3.28 3.60 3.32 3.70
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CONDENSED BALANCE SHEETS
September 30 December 31 September 30
(thousands, except share data; unaudited) 2003 2002 2002
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Cash and due from banks $ 790,166 $ 811,657 $ 801,450
Investment securities 2,646,829 2,539,236 2,502,026
Loans 8,026,502 7,620,263 7,521,834
Reserve for loan losses (117,747) (112,533) (111,577)
Other assets 1,041,531 1,373,267 1,373,419
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Total assets $12,387,281 $12,231,890 $12,087,152
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Deposits $10,563,135 $10,439,620 $10,286,825
Other liabilities 807,718 824,979 850,456
Shareholders' equity 1,016,428 967,291 949,871
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Total liabilities and shareholders' equity $12,387,281 $12,231,890 $12,087,152
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Book value per share $ 97.39 $ 92.36 $ 90.67
Tangible book value per share 87.02 81.73 80.23
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SELECTED AVERAGE BALANCES
Three Months Ended September 30 Nine Months Ended September 30
(thousands, except shares outstanding; unaudited) 2003 2002 2003 2002
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Total assets $12,287,273 $11,871,334 $12,177,404 $11,764,711
Investment securities 2,665,203 2,553,957 2,579,562 2,632,761
Loans 7,946,501 7,450,271 7,801,418 7,324,359
Interest-earning assets 10,994,308 10,592,386 10,876,224 10,480,111
Deposits 10,441,989 10,060,785 10,373,902 9,925,071
Interest-bearing liabilities 9,126,076 9,131,569 9,159,017 9,093,797
Shareholders' equity $ 1,002,712 $ 935,735 $ 989,121 $ 915,387
Shares outstanding 10,436,345 10,477,886 10,457,976 10,480,011
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ASSET QUALITY
September 30 December 31 September 30
(dollars in thousands; unaudited) 2003 2002 2002
Nonaccrual loans $ 13,494 $ 15,521 $ 14,944
Other real estate 6,827 7,330 12,092
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Total nonperforming assets $ 20,321 $ 22,851 $ 27,036
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Accruing loans 90 days or more past due $ 11,840 $ 9,566 $ 8,928
Net charge-offs (year-to-date) $ 13,894 21,104 $ 14,904
Nonperforming assets to gross loans plus other real estate 0.25 % 0.30 % 0.36 %
Reserve for loan losses to gross loans 1.47 1.48 1.48
Net charge-offs to average total loans (annualized, year-to-date) 0.24 0.29 0.27
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CAPITAL INFORMATION
September 30 December 31 September 30
(dollars in thousands; unaudited) 2003 2002 2002
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Tier 1 capital $ 1,147,124 $ 1,096,537 $ 1,084,714
Total capital 1,262,501 1,204,142 1,191,150
Risk-weighted assets 8,618,154 8,123,321 8,086,739
Tier 1 capital ratio 13.31 % 13.50 % 13.41 %
Total capital ratio 14.65 14.82 14.73
Leverage capital ratio 9.42 9.17 9.22
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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.