FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995 Commission File Number 0-11172
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.
(Exact name of registrant as specified in its charter)
State of South Carolina 57-0738665
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1230 Main Street
Columbia, South Carolina 29201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (803) 733-3456
No Change
(Former name or former address,
if changed since last report.)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [ X ] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at October 31, 1995
Common Stock, $5.00 Par Value 892,813 Shares
Non-voting Common Stock, $5.00 Par Value 50,720 Shares
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Page 2
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET - UNAUDITED (dollars in thousands)
September 30, December 31, September 30,
1995 1994 1994
ASSETS Cash and due from banks:
Noninterest-bearing $81,001 $89,814 $79,439
Interest-bearing 13,100 13,950 14,200
Total cash and due from banks 94,101 103,764 93,639
Investment securities:
Held-to-maturity 445,197 476,142 471,540
Available-for-sale 12,646 10,539 11,002
Total securities 457,843 486,681 482,542
Gross loans and discounts
Real estate - construction 17,305 7,888 13,468
Real estate - mortgage 631,542 562,687 555,265
Installment 320,648 269,693 263,188
Commercial, financial and agricultural 108,498 96,757 88,192
Less: Reserve for loan losses (22,076) (19,249) (18,880)
Net loans and discounts 1,055,917 917,776 901,233
Premises and equipment 43,265 40,941 40,573
Other real estate owned 621 270 544
Interest income accrued, not collected 13,794 12,126 9,781
Intangible assets 17,934 15,618 16,464
Other assets 15,004 12,005 13,834
TOTAL ASSETS $1,698,479 $1,589,181 $1,558,610
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand 239,585 $215,301 211,121
Time 582,237 503,378 509,208
Savings 662,878 667,839 666,312
Total deposits 1,484,700 1,386,518 1,386,641
Federal funds purchased 700 11,500 9,600
Securities sold under repurchase agreements 81,332 64,416 36,623
Term loan 12,125 13,400 13,650
Other liabilities 12,860 15,322 16,017
TOTAL LIABILITIES 1,591,717 1,491,156 1,462,531
Stockholders' Equity:
Preferred stock 3,282 3,282 3,282
Non-voting common stock - $5.00 par value, authorized
1,000,000; issued and outstanding September 30, 1995,
December 31, 1994 and September 30, 1994 - 50,720 254 254 254
Voting common stock - $5.00 par value, authorized 2,000,000;
issued and outstanding September 30, 1995, December 31, 1994
and September 30, 1994 - 892,813 4,464 4,464 4,464
Surplus 55,000 55,000 55,000
Undivided profits 38,150 30,765 28,477
Unrealized gain on investment securities available-for-sale, net of taxes 5,612 4,260 4,602
TOTAL STOCKHOLDERS' EQUITY 106,762 98,025 96,079
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,698,479 $1,589,181 $1,558,610
Page 3
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME - UNAUDITED
(dollars in thousands, except for per share amounts)
Quarter Ended September 30, Nine Months Ended September 30,
----------------------------------------- ----------------------------------
1995 1994 % Change 1995 1994 % Change
----------------------------------------- ----------------------------------
Interest income and fees:
Loans $23,271 $19,374 20.11% $65,474 $56,030 16.86%
United States Government obligations 5,955 5,059 17.71% 17,644 14,844 18.86%
Mortgage-backed securities 9 0 100.00% 9 0 100.00%
Tax-exempt securities 481 579 -16.93% 1,493 1,805 -17.29%
Other securities and federal funds sold 470 285 64.91% 1,293 1,019 26.89%
30,186 25,297 19.33% 85,913 73,698 16.57%
Interest expense:
Deposits 12,500 9,818 27.32% 35,318 27,097 30.34%
Short-term borrowings 1,055 592 78.21% 3,319 1,659 100.06%
Long-term borrowings 227 230 -1.30% 758 711 6.61%
13,782 10,640 29.53% 39,395 29,467 33.69%
Net interest income 16,404 14,657 11.92% 46,518 44,231 5.17%
Provision for loan losses 1,316 485 171.34% 3,187 1,643 93.97%
Net interest income after
provision for loan losses 15,088 14,172 6.46% 43,331 42,588 1.74%
Noninterest income:
Service charges on deposit accounts 3,022 2,647 14.17% 8,279 7,733 7.06%
Fees for other customer services 1,605 1,438 11.61% 4,753 4,203 13.09%
Other 559 612 -8.66% 1,856 1,864 -0.43%
5,186 4,697 10.41% 14,888 13,800 7.88%
Noninterest expense:
Salaries and employee benefits 7,469 7,047 5.99% 21,626 20,799 3.98%
Net occupancy expense 630 585 7.69% 1,716 1,695 1.24%
Furniture and equipment expense 378 426 -11.27% 1,038 1,195 -13.14%
Depreciation expense 955 1,083 -11.82% 2,715 3,197 -15.08%
Amortization of intangibles 1,479 1,164 27.06% 4,120 3,052 34.99%
Other 4,443 4,915 -9.60% 15,637 15,196 2.90%
15,354 15,220 0.88% 46,852 45,134 3.81%
Income before income taxes 4,920 3,649 34.83% 11,367 11,254 1.00%
Applicable income taxes 1,704 1,204 41.53% 3,854 3,736 3.16%
Net Income 3,216 2,445 31.53% 7,513 7,518 -0.07%
Per share amounts:
Earnings per common share: $3.37 $2.55 32.06% $7.83 $7.82 0.13%
Weighted average common shares outstanding 943,533 944,598 -0.11% 943,533 945,225 -0.18%
Page 4
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED
(dollars in thousands):
Unrealized
Non-Voting Voting Gain/(Loss) on Total
Preferred Common Common Undivided Investment Stockholders'
Stock Stock Stock Surplus Profits Securities Equity
Balance at December 31, 1993 $3,282 $264 $4,464 $55,000 $21,227 $84,237
Net income 7,518 7,518
Preferred stock dividends (128) (128)
Reacquired non-voting common stock (10) (140) (150)
Unrealized gain on investment
securities available-for-sale, net of taxes 4,602 4,602
Balance at September 30, 1994 3,282 254 4,464 55,000 28,477 4,602 96,079
Net income 2,331 2,331
Preferred stock dividends (43) (43)
Change in unrealized gain on investment
securities available-for-sale, net of taxes (342) (342)
Balance at December 31, 1994 3,282 254 4,464 55,000 30,765 4,260 98,025
Net income 7,513 7,513
Preferred stock dividends (128) (128)
Change in unrealized gain on investment
securities available-for-sale, net of taxes 1,352 1,352
Balance at September 30, 1995 $3,282 $254 $4,464 $55,000 $38,150 $5,612 $106,762
Page 5
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS - UNAUDITED (DOLLARS IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1995 1994
-------- ----
OPERATING ACTIVITIES:
Net income $7,513 $7,518
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses 3,187 1,643
Depreciation and amortization 6,834 6,249
(Accretion)/amortization of investment securities (320) 39
Deferred income taxes benefit (1,334) (883)
Gains on sales of premises and equipment (90) (97)
(Increase)/decrease in interest income accrued, not collected (1,528) 870
(Decrease)/increase in accrued interest payable (2,774) 132
Originations of loans held for resale (33,408) (29,353)
Proceeds from sales of loans held for resale 33,784 32,137
Gains on sales of loans held for resale (135) (210)
Increase in other assets (1,222) (1,259)
Increase in other liabilities 79 3,116
NET CASH PROVIDED BY OPERATING ACTIVITIES 10,586 19,902
INVESTING ACTIVITIES:
Net increase in loans (129,251) (42,508)
Proceeds from maturities of investment securities, available for sale 15 0
Proceeds from maturities of investment securities, held-to-maturity 200,515 253,031
Purchases of investment securities, held-to-maturity (165,069) (260,556)
Proceeds from sales of premises and equipment 111 375
Purchases of premises and equipment (3,979) (3,832)
Net decrease in other real estate owned 119 (134)
Net increase in intangible assets (4,555) (432)
Purchase of institutions, net of cash acquired (628) 53,803
NET CASH USED BY INVESTING ACTIVITIES (102,722) (253)
FINANCING ACTIVITIES:
Net increase/(decrease) in deposits 77,760 (11,391)
Increase/(decrease) in federal funds purchased and securities sold
under agreements to repurchase 6,116 (24,983)
Term loan payments (1,275) (750)
Cash dividends paid (128) (128)
Reacquired common stock 0 (150)
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 82,473 (37,402)
DECREASE IN CASH AND DUE FROM BANKS (9,663) (17,753)
CASH AND DUE FROM BANKS AT BEGINNING OF YEAR 103,764 111,392
CASH AND DUE FROM BANKS AT END OF PERIOD $94,101 $93,639
======= =======
Supplemental disclosures of cash flow information:
Interest paid $36,622 $29,335
Income taxes paid $6,116 $2,428
Unrealized appreciation in investment securities available-for-sale:
Securities available-for-sale $8,634 $7,079
Shareholders' equity $5,612 $4,602
Deferred taxes $3,022 $2,477
Page 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The preceding financial statements are unaudited; however, in the opinion of
management, all adjustments (comprising all normal recurring accruals) necessary
for a fair presentation of financial statements have been included. A summary of
Bancorporation's significant accounting policies is set forth in Note 1 to the
Consolidated Financial Statements in Bancorporation's Annual Report on Form 10-K
for 1994. The significant accounting policies used during the current quarter
are unchanged from those disclosed in the 1994 Annual Report.
INCOME TAXES:
Deferred tax assets and liabilities recorded pursuant to Statement of Financial
Accounting Standards ("SFAS") No. 109 are composed of the following at:
September 30, September 30,
1995 1994
Provision for loan losses in excess
of amount deductible for taxes $7,454 $6,437
Tax amortizatin of intangibles over book 881 145
Other, net 782 594
Gross deferred tax asset 9,117 7,176
Book depreciation over tax 503 565
Deferred income and expense items
recognized in different accounting periods 386 455
Pension plan 756 753
Unrealized gains on available-for-sale securities 3,022 2,477
Other 394 530
Gross deferred tax liability 5,061 4,780
Net deferred tax asset $4,056 $2,396
INVESTMENT SECURITIES:
Bancorporation adopted SFAS No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." effective January 1, 1994. Management has reviewed the
investment securities portfolio and classified all securities, except equity
securities, as held-to-maturity and carried at amortized cost since
Bancorporation has both the positive intent and ability to hold these securities
to maturity. Equity securities, as required by SFAS No. 115, are classified as
available-for-sale and carried at estimated fair value with unrealized gains and
losses included as a component of stockholders' equity on an after-tax basis.
Page 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
LOANS:
Effective January 1, 1995, Bancorporation adopted SFAS No. 114, "Accounting
by Creditors for Impairment of a Loan," which specifies how allowances for
credit losses related to certain impaired loans should be determined and
generally requires impairment to be measured on the basis of discounted expected
cash flows. This statement considers a loan to be impaired when, based on
current information and events, it is probable that a creditor will be unable to
collect all amounts due according to the contractual terms of the loan
agreement. In October 1994, FASB issued SFAS No. 118, "Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosures" which amends the
income recognition requirements of SFAS No. 114. Bancorporation adopted SFAS No.
114 and SFAS No. 118 as of January 1, 1995. The impact of adoption of SFAS No.
114 and SFAS No. 118 on Bancorporations's consolidated financial statements was
not material.
SFAS No. 114 applies to all impaired loans, uncollateralized as well as
collaterized, except large groups of smaller-balance homogeneous loans that are
collectively evaluated for impairment. Accordingly, Bancorporations considers
its portfolio of credit card, residential mortgage and consumer loans to be
exempt from this statement.
Loans on which the accrual of interest has been discontinued are designated
as nonaccrual loans. Loans, excluding most consumer loans, are placed in
nonaccrual status when principal or interest is deliquent 90 days or more. Also,
loans which are classified doubtful or loss, or where the borrower has filed
bankruptcy are considered nonaccrual loans. Management considers all nonaccrual
loans to be impaired as well as other loans of which the ultimate collectibility
of principal and interest is uncertain. Loans which exceed 90 days past due and
are considered uncollectible are generally charged-off against the allowance for
loan losses.
Payments received on nonaccrual loans are applied to principal until such
amount is liquidated in full. Subsequent payments on nonaccrual loans are
recognized as interest income when received. Except in cases where other
accounting or regulatory rules apply, loans are generally returned to accrual
status when the collectibility of both principal and interest on a timely basis
is reasonably assured and all delinquent principal and interest or the loan
becomes well secured and in the process of collection.
Page 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
MORTAGE SERVICING RIGHTS:
On May 12, 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage
Servicing Rights", an amendment to SFAS No. 65 which is to be applied
prospectively for fiscal years beginning after December 15, 1995. SFAS No. 122
requires that a mortgage servicing entity must allocate the total cost of the
mortgage loans purchased or originated to the mortgage servicing rights(MSRs)
and the loans (without the MSRs) based on their relative fair values if it is
practicable to estimate those values. If it is not practicable to estimate the
fair values of the MSRs and the mortgage loans (without the MSRs), the entire
cost of purchasing or originating the loans should be allocated to the mortgage
loan and no cost should be allocated to the MSR. In addition, SFAS No. 122
requires that an entity assess its MSR portfolios for impairment based on the
fair value of those rights. The entity must stratify its MSRs that are
capitalized after adoption of this statement based on one or more of the
predominant risk characteristics of the underlying loans. Impairment should be
recognized through a valuation allowance for each impaired stratum. Under SFAS
No. 65, the cost of originated MSRs was not recognized as an asset but was
charged to earnings when the related loan was sold. In addition, the cost
allocation was different for purchased MSRs. In contrast to a cost allocation
based on relative market value as set forth in SFAS No. 122, the prior
requirement was to allocate the costs incurred in excess of the market value of
the loans without the MSRs to purchased MSRs. Bancorporation will adopt SFAS No.
122 effective January 1, 1996, the effect of which is not expected to be
material.
Page 9
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Page 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SUMMARY:
First Citizens Bancorporation reported net income of $3,216,000 for the third
quarter of 1995, a 31.53% increase from the $2,445,000 for the third quarter a
year ago. Net income for the nine months ended September 30, 1995 was
$7,513,000, a .07% decrease from the $7,518,000 reported for the same period in
1994.
Average loans net of unearned interest for the quarter ended September 30, 1995
increased $127,150,000 or 13.90% when compared to the same period in 1994, with
a yield of 9.11% for the third quarter of 1995. Average taxable and non-taxable
investment securities for the third quarter of 1995 decreased by $43,454,000 or
8.69% from the third quarter of 1994, with a taxable equivalent yield of 5.92%
for the third quarter of 1995. Average loans net of unearned interest for the
nine months ended September 30, 1995 increased $92,980,000 or 10.38% from the
same period in 1994, with a yield of 8.91% for the nine months ended September
30, 1995. Average taxable and non-taxable investment securities for the nine
months ended September 30, 1995 decreased by $11,208,000 or 2.30% from the same
period in 1994, with a taxable equivalent yield of 5.65% for the first nine
months of 1995.
Noninterest income increased by $489,000 or 10.41% and increased by $1,088,000
or 7.88%, respectively, for the quarter and nine months ended September 30,
1995, as compared to the same periods in 1994. For the quarter and nine months
ended September 30, 1995, noninterest expense increased $134,000 or .88% and
$1,718,000 or 3.81%, respectively, as compared to the same periods in 1994. The
increase in noninterest expense was primarily due to increased amortization of
intangibles.
Net income per common share for the quarter ended September 30, 1995 increased
32.06% to $3.37, as compared to $2.55 for the third quarter of 1994. Net income
per common share for the nine months ended September 30, 1995 increased .10% to
$7.83, as compared to $7.82 for the same period in 1994.
Book value per common share as of September 30, 1995 increased 11.51% to
$109.67, as compared to $98.35 for the same period in 1994.
As illustrated in the following table, Tier 1 capital was 8.31% at September 30,
1995 as compared to 8.67% at September 30, 1994. Total risk-based capital was
10.11% at September 30, 1995 as compared to 10.81% at September 30, 1994. The
risk-based capital ratios were calculated using the 1992 Final Rules as defined
by Federal regulators.
Page 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SUMMARY (Continued):
Components of Capital (dollars in thousands):
September 30,
1995 1994
Stockholders' Equity:
Preferred stock $ 3,282 $ 3,282
Common stock 4,718 4,718
Surplus 55,000 55,000
Undivided profits 43,762 33,079
Total stockholders' equity 106,762 96,079
Reserve for loan losses 22,076 18,880
Total primary capital 128,838 114,959
Long-term debt qualifying as secondary capital 12,125 13,650
Total capital $140,963 $128,609
Tier I leverage ratio 5.13 5.04
Risk-based capital ratio total 10.11 10.81
Tier I 8.31 8.67
Tier II 1.80 2.14
NET INTEREST INCOME:
Net interest income on a taxable equivalent basis was $16,794,000 for the third
quarter of 1995, a increase of 11.83% from the $15,017,000 for the comparable
period in 1994. Net interest income on a taxable equivalent basis was
$47,740,000 for the nine months ended September 30, 1995, an increase of 5.08%
from the $45,433,000 for the comparable period in 1994.
The following table presents the components of net interest income for the
quarter and nine months ended September 30, 1995 and 1994:
Net Interest Income (dollars in thousands):
Quarter Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Total interest income $30,186 $25,297 $85,913 $73,698
Total interest expense 13,782 10,640 39,395 29,467
Net interest income 16,404 14,657 46,518 44,231
Tax equivalent adjustment 390 360 1,222 1,202
Net interest income (taxable equivalent basis) $16,794 $15,017 $47,740 $45,433
Page 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
NET INTEREST INCOME (Continued):
Taxable Equivalent Rate/Volume Variance Analysis (Amounts in thousands)
Quarter Ended September 30
- ------------------------------------------------------------------------------------------------
Change
Average Interest Yield Due To Net
Balance Rev./Exp. Increase
1995 1994 1995 1994 1995 1994 Rate Volume (Decrease)
Interest-earning assets:
$1,041,981 $914,831 $23,405 $19,425 9.11% 8.61% Loans $1,243 $2,737 $3,980
420,483 454,249 6,015 5,104 5.72% 4.49% Taxable investment securities 1,290 (379) 911
35,836 45,524 738 892 8.24% 7.84% Non-taxable investment securities 36 (190) (154)
13,808 3,026 198 33 5.82% 4.42% Federal funds sold 46 119 165
13,142 14,246 220 203 6.79% 5.78% Other earning assets 33 (16) 17
1,525,250 1,431,876 30,576 25,657 8.11% 7.24% Total interest-earning assets 2,648 2,271 4,919
Noninterest-earning assets:
79,384 80,374 Cash and due from banks
42,032 38,347 Premises and equipment
23,400 24,626 Other, less reserve for loan losses
144,816 143,347 Total noninterest-earning assets
$1,670,066 $1,575,223 TOTAL ASSETS
Interest-bearing liabilities:
$1,222,825 $1,193,563 12,500 9,818 4.15% 3.34% Deposits 2,438 244 2,682
Federal funds purchased and securities
79,400 51,121 1,054 592 5.38% 4.70% sold under agreements to repurchase 130 332 462
12,199 13,688 228 230 7.48% 6.72% Long-term debt 23 (25) (2)
1,314,424 1,258,372 13,782 10,640 4.25% 3.43% Total interest-bearing liabilities 2,591 551 3,142
Noninterest-bearing liabilities:
232,608 206,793 Demand deposits
17,912 21,516 Other liabilities
250,520 228,309 Total noninterest-bearing liabilities
105,122 88,542 Stockholders' equity
TOTAL LIABILITIES AND
$1,670,066 $1,575,223 13,782 10,640 STOCKHOLDERS' EQUITY 2,591 551 3,142
$16,794 $15,017 Net interest income $57 $1,720 $1,777
8.11% 7.24% Interest income to interest-earning assets
3.66% 3.01% Interest expense to interest-earning assets
4.44% 4.23% Net interest income to interest-earning assets
Page 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
NET INTEREST INCOME (Continued):
Taxable Equivalent Rate/Volume Variance Analysis (Amounts in thousands)
Nine Months Ended September 30,
Average Interest Change Net
Balance Rev./Exp. Yield Due To Increase
1995 1994 1995 1994 1995 1994 Rate Volume Decrease)
Interest-earning assets:
$988,418 $895,438 $65,893 $56,261 8.91% 8.40% Loans, net of unearned interest $3,416 $6,216 $9,632
437,623 438,816 17,818 15,008 5.43% 4.56% Taxable investment securities 2,859 (49) 2,810
37,432 47,447 2,296 2,777 8.18% 7.80% Non-taxable investment securities 133 (614) (481)
10,607 9,379 458 240 5.77% 3.42% Federal funds sold 165 53 218
13,414 14,499 670 614 6.68% 5.66% Other earning assets 110 (54) 56
1,487,494 1,405,579 87,135 74,900 7.83% 7.12% Total interest-earning assets 6,683 5,552 12,235
Noninterest-earning assets:
77,289 77,813 Cash and due from banks
41,473 37,092 Premises and equipment
22,154 22,836 Other, less reserve for loan losses
140,916 137,741 Total noninterest-earning assets
$1,628,410 $1,543,320 TOTAL ASSETS
Interest-bearing liabilities:
$1,195,280 $1,163,139 35,318 27,097 3.95% 3.11% Deposits 7,269 952 8,221
Federal funds purchased and securities
79,252 58,616 3,318 1,659 5.60% 3.78% sold under agreements to repurchase 793 866 1,659
12,636 13,935 759 711 8.01% 6.80% Long-term debt 126 (78) 48
1,287,168 1,235,690 39,395 29,467 4.09% 3.19% Total interest-bearing liabilities 8,188 1,740 9,928
Noninterest-bearing liabilities:
221,990 200,794 Demand deposits
16,848 16,546 Other liabilities
238,838 217,340 Total noninterest-bearing liabilities
102,404 90,290 Stockholders' equity
TOTAL LIABILITIES AND
$1,628,410 $1,543,320 39,395 29,467 STOCKHOLDERS' EQUITY 8,188 1,740 9,928
$47,740 $45,433 Net interest income ($1,505) $3,812 $2,307
7.83% 7.12% Interest income to interest-earning assets
3.54% 2.80% Interest expense to interest-earning assets
4.29% 4.32% Net interest income to interest-earning assets
Page 14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESERVE FOR LOAN LOSSES:
The reserve at September 30, 1995 was $22,076,000 or 2.05% of total loans as
compared to $18,880,000 or 2.05% of total loans at September 30, 1994.
For the quarter ended September 30, 1995, the provision for loan losses was
$1,316,000, an increase of 171.34% over the $485,000 for the same period in
1994. For the nine months ended September 30, 1995, the provision for possible
loan losses was $3,187,000, an increase of 93.97% over the $1,643,000 for 1994.
The increase in provision for loan losses for the quarter and nine months ended
on September 30, 1995 was due to an increase in loans, referred to on page
11 of the summary.
Net charge-offs were $322,000 in the third quarter of 1995 which represented an
increase of 84.00% when compared to the $175,000 reported for the comparable
period of 1994. For the nine months ended September 30, 1995, net charge-offs
were $657,000, a 20.27% decrease from the $824,000 for the nine months ended
1994.
Provision and Reserve for Loan Losses (dollars in thousands):
Quarter Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Reserve for loan losses:
Balance at beginning of period $20,785 $18,570 $19,249 $18,061
Provision charged to expense 1,316 485 3,187 1.643
Reserves related to acquisition 297 0 297 0
Charge-offs (518) (438) (1,240) (1,435)
Recoveries 196 263 583 611
Net charge-offs (322) (175) (657) (824)
Balance at end of period $22,076 $18,880 $22,076 $18,880
Ratios (annualized):
Net Charge-offs to:
Average loans .12 .08 .09 .12
Loans at end of period .12 .08 .08 .12
Reserve for loan losses 5.83 3.71 3.97 5.82
Page 15
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
NONINTEREST INCOME AND EXPENSE:
Total noninterest income for the quarter was $5,186,000, an increase of 10.41%
from the $4,697,000 earned for the third quarter of 1994. For the nine months
ended September 30, 1995, total noninterest income was $14,888,000, an increase
of 7.88% from the $13,800,000 earned for the same period in 1994.
Total noninterest expense for the third quarter of 1995 was $15,354,000, an
increase of .88% when compared with $15,220,000 for the same period a year ago.
For the nine months ended September 30, 1995, total noninterest expense was
$46,852,000, an increase of 3.81% when compared with $45,134,000 for the same
period a year ago.
The following table provides additional details of noninterest income and
expense:
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
NONINTEREST INCOME AND EXPENSE (Continued):
The following table provides details of noninterest income and expense:
Noninterest Income and Expense (dollars in thousands):
Quarter Ended Nine Months Ended
September 30, Change September 30, Change
------------------- -------------------- ------------------- --------------
1995 1994 Amount Percent 1995 1994 Amount Percent
Noninterest income:
Service charges on deposit accounts $3,022 $2,647 $375 14.17% $8,279 $7,733 $546 7.06%
Commissions, service charges and fees 553 539 14 2.60% 1,784 1,646 138 8.38%
Mortgage servicing 491 430 61 14.19% 1,474 1,261 213 16.89%
Bankcard fees and discounts 561 469 92 19.62% 1,495 1,295 200 15.44%
All other 559 612 (53) -8.66% 1,856 1,865 (9) -0.48%
Total noninterest income $5,186 $4,697 $489 10.41% $14,888 $13,800 $1,088 7.88%
Noninterest expense:
Salaries and wages $5,432 $5,694 ($262) -4.60% $16,652 $17,150 ($498) -2.90%
Pension and other employee benefits 2,037 1,353 684 50.55% 4,974 3,649 1,325 36.31%
Total staff expenses 7,469 7,047 422 5.99% 21,626 20,799 827 3.98%
Occupancy expense 1,003 855 148 17.31% 2,652 2,501 151 6.04%
Furniture and equipment expense 960 1,239 (279) -22.52% 2,817 3,587 (770) -21.47%
Amortization of intangibles 1,479 1,164 315 27.06% 4,120 3,052 1,068 34.99%
Telephone 310 328 (18) -5.49% 928 985 (57) -5.79%
Stationery and supplies 295 234 61 26.07% 847 856 (9) -1.05%
Professional services 281 246 35 14.23% 1,010 913 97 10.62%
Automated services 1,047 1,232 (185) -15.02% 3,408 3,353 55 1.64%
FDIC insurance assessment (17) 769 (786) -102.21% 1,549 2,252 (703) -31.22%
Bankcard 542 474 68 14.35% 1,522 1,335 187 14.01%
Postage 303 195 108 55.38% 911 812 99 12.19%
All other 1,682 1,437 244 16.98% 5,462 4,689 772 16.46%
Total noninterest expense $15,354 $15,220 $133 0.87% $46,852 $45,134 $1,717 3.80%
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Neither Registrant nor its subsidiary, First Citizens Bank and Trust Company,
nor its subsidiaries, are a party to, nor is any of their property the subject
of, any material or other pending legal proceeding, other than ordinary routine
proceedings incidental to their business.
Item 2. Changes in Securities.
Not Applicable.
Item 3. Defaults upon Senior Securities.
Not Applicable.
Item 4. Submission of Matters to Vote of Security Holders.
Not Applicable
Item 5. Other Information.
At close of business on September 21, 1995, Registrant purchased the Summerville
National Bank in Summerville, South Carolina. Total loans purchased were
$13,105,000 and deposits assumed totaled $20,422,000.. A premium paid of
$1,882,000 will be assigned to a core deposit intangible asset and will be
amortized over seven and one half (7 1/2) years. Proforma financial information
is not attached since the business acquired is not considered a "significant
subsidiary" per Rule 1-02(v).
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
11 Statement Re Computation of Per Share Earnings - Page 20
(b) No reports on Form 8-K were filed during the quarter ended September 30,
1995.
Page 18
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST CITIZENS BANCORPORATION
OF SOUTH CAROLINA, INC.
(Registrant)
Dated: November 09, 1995 By: /s/ Jay C. Case
Jay C. Case, Treasurer
(Chief Financial Officer)
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