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): January 26, 2004
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 January 26, 2004
Item 9. Regulation FD Disclosure (Being furnished under both Item 9 and
Item 12).
On January 26, 2004, Registrant announced its results of operations
for the quarter ended December 31, 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: January 26, 2004 By: /S/Kenneth A. Black
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Kenneth A.Black
Vice President
For Immediate Release Contact: Barbara Thompson
January 26, 2004 First Citizens Bank
(919) 716-2716
Corporate Communications Department-CTW11
PO Box 27131 Raleigh, NC 27611-7131
FIRST CITIZENS REPORTS EARNINGS FOR 2003
RALEIGH, N.C. - First Citizens BancShares Inc. (Nasdaq: FCNCA) reports earnings
for the year ending Dec. 31, 2003, of $75.2 million compared to $92.8 million
for 2002, a reduction of $17.6 million or 18.9 percent, according to Lewis R.
Holding, chairman of the board.
Per share income for 2003 totaled $7.19 compared to $8.85 for 2002. First
Citizens' results generated an annualized return on average assets of 0.61
percent during 2003. That compares to 0.78 percent for 2002. The annualized
return on average equity was 7.54 percent in 2003, compared to 10.03 percent for
2002. The reduction in 2003 net income resulted from lower net interest income
and higher noninterest expense. The impact of the reduction more than negated
the benefit of higher noninterest income and lower provision for loan losses.
Net interest income for 2003 decreased $20.2 million or 5.3 percent from 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 3.63 percent in 2002 to 3.32 percent
in 2003. Noninterest expense increased $33.1 million or 7.6 percent during 2003,
the result of higher personnel expenses as well as higher equipment and
occupancy costs related to new branches.
Noninterest income increased $24.0 million or 10.8 percent during 2003, due
primarily to improved cardholder and merchant services income, higher mortgage
income and a $5.7 million nonrecurring gain on the sale of branch offices. The
provision for loan losses was $24.2 million in 2003, compared to $26.6 million
in 2002, an 8.9 percent reduction. The decline was the result of lower levels of
net charge-offs, which were lessened by the impact of loan growth. Net
charge-offs were $17.8 million and $21.1 million during 2003 and 2002, a
reduction of $3.3 million or 15.8 percent during 2003. Net charge-offs equaled
0.23 percent of average loans outstanding during 2003, compared to 0.29 percent
for 2002.
First Citizens reported net income of $16.6 million for the quarter ending Dec.
31, 2003, compared to $19.3 million for the corresponding period of 2002, a
reduction of 14.3 percent. Per share income for the fourth quarter 2003 totaled
$1.59 compared to $1.85 for the same period a year ago. First Citizens' results
generated an annualized return on average assets of 0.53 percent for the fourth
quarter of 2003, compared to 0.64 percent for the same period of 2002. The
annualized return on average equity equaled 6.45 percent during the fourth
quarter of 2003, compared to 8.05 percent for the same period of 2002. In the
fourth quarter, higher noninterest expenses exceeded the favorable impact of
improved noninterest income, lower provision for loan losses and a slight
improvement in net interest income. Noninterest expense increased $7.8 million
or 7.0 percent during the fourth quarter of 2003, when compared to the same
period of 2002. Salary expense increased $3.3 million or 6.8 percent during 2003
due to the continued growth and expansion of Atlantic States Bank's franchise
and higher incentive-based compensation. Occupancy expense increased $1.2
million or 12.9 percent, the result of higher depreciation costs and rent
expense resulting from new branch facilities.
Noninterest income increased $2.2 million or 3.9 percent during the fourth
quarter. Cardholder and merchant services income increased $1.0 million or 7.5
percent due to favorable volume growth, while service-charge income increased
$957,000 or 5.0 percent. Growth was also noted in trust income and
commission-based income. These increases were partially offset by a $1.5 million
reduction in mortgage income.
BancShares reported an increase in net interest income in the fourth quarter of
2003, compared to the prior year's same quarter. Net interest income increased
$246,000 or 0.3 percent in the fourth quarter, compared to the same period of
2002. The improvement in net interest income resulted from loan growth and the
collection of interest income on nonaccrual loans. These enhancements to net
interest income more than offset the unfavorable impact of lower interest rates
on interest-earning assets. The taxable-equivalent net yield on interest-
earning assets fell from 3.43 percent in the fourth quarter of 2002 to 3.33
percent for the fourth quarter of 2003. Average interest-earning assets
increased $329.3 million or 3.1 percent during the fourth quarter of 2003,
compared to the same period of 2002.
The provision for loan losses decreased $2.1 million or 29.0 percent in the
fourth quarter of 2003, compared to the same period of 2002 due to lower net
charge-offs. Net charge-offs were $3.9 million during the fourth quarter of
2003, compared to $6.2 million during the same period of 2002, a 37.5 percent
reduction.
As of Dec. 31, 2003, First Citizens BancShares had total assets of $12.6
billion. BancShares' subsidiary, First Citizens Bank, has 332 branches in North
Carolina, Virginia and West Virginia. Another subsidiary, Atlantic States Bank,
has 34 offices in Georgia and Florida. Atlantic States' western division,
IronStone Bank, has 10 offices in Texas, Arizona and California. For more
information, visit the First Citizens Web site at firstcitizens.com.
CONDENSED STATEMENTS OF INCOME
Three Months Ended December 31 Year Ended December 31
(thousands, except share data; unaudited) 2003 2002 2003 2002
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Interest income $ 125,343 $ 140,508 $ 510,477 $ 596,169
Interest expense 32,301 47,712 148,537 214,018
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Net interest income 93,042 92,796 361,940 382,151
Provision for loan losses 5,079 7,156 24,187 26,550
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Net interest income after provision for loan losses 87,963 85,640 337,753 355,601
Noninterest income 58,834 56,618 245,374 221,389
Noninterest expense 120,322 112,496 466,526 433,447
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Income before income taxes 26,475 29,762 116,601 143,543
Income taxes 9,901 10,422 41,414 50,787
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Net income $ 16,574 $ 19,340 $ 75,187 $ 92,756
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Taxable-equivalent net interest income $ 93,297 $ 93,106 $ 362,991 $ 383,494
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Net income per share $ 1.59 $ 1.85 $ 7.19 $ 8.85
Cash dividends per share 0.275 0.250 1.10 1.00
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Profitability Information (annualized)
Retu n on average assets 0.53 % 0.64 % 0.61 % 0.78%
Return on average equity 6.45 8.05 7.54 10.03
Taxable-equivalent net yield on interest-earning assets 3.33 3.43 3.32 3.63
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CONDENSED BALANCE SHEETS
December 31 December 31
(thousands, except share data; unaudited) 2003 2002 Change
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Cash and due from banks $ 790,168 $ 811,657 -2.65%
Investment securities 2,469,447 2,539,236 -2.75%
Loans 8,326,598 7,620,263 9.27%
Reserve for loan losses (119,357) (112,533) 6.06%
Other assets 1,093,052 1,373,267 -20.40%
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Total assets $12,559,908 $12,231,890 2.68%
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Deposits $10,711,332 $10,439,620 2.60%
Other liabilities 819,271 824,979 -0.69%
Shareholders' equity 1,029,305 967,291 6.41%
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Total liabilities and shareholders' equity $12,559,908 $12,231,890 2.68%
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Book value per share $ 98.63 $ 92.36 6.79%
Tangible book value per share 87.51 81.73 7.07%
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SELECTED AVERAGE BALANCES
Three Months Ended December 31 Year Ended December 31
(thousands, except shares outstanding; unaudited) 2003 2002 2003 2002
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Total assets $12,448,911 $12,076,262 $12,245,840 $11,843,239
Investment securities 2,602,630 2,544,930 2,585,376 2,610,622
Loans 8,140,751 7,543,548 7,886,948 7,379,607
Interest-earning assets 11,100,897 10,771,571 10,932,853 10,553,574
Deposits 10,611,464 10,251,693 10,433,781 10,007,398
Interest-bearing liabilities 9,178,628 9,234,127 9,163,960 9,129,168
Shareholders' equity $ 1,020,181 $ 953,606 $ 996,578 $ 924,877
Shares outstanding 10,436,345 10,475,377 10,452,523 10,478,843
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December 31 December 31
(dollars in thousands; unaudited) 2003 2002 Change
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Nonaccrual loans $ 18,190 $ 15,521 17.20%
Other real estate 5,949 7,330 -18.84%
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Total nonperforming assets $ 24,139 $ 22,851 5.64%
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Accruing loans 90 days or more past due $ 11,492 $ 9,566 20.13%
Nonperforming assets to gross loans plus other real estate 0.29 % 0.30 %
Reserve for loan losses to gross loans 1.43 1.48
Net charge-offs to average total loans 0.23 0.29
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CAPITAL INFORMATION
December 31 December 31
(dollars in thousands; unaudited) 2003 2002 Change
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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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