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TheStreet Open House

First Citizens Reports Earnings For Second Quarter 2012

RALEIGH, N.C., Aug. 8, 2012 (GLOBE NEWSWIRE) -- First Citizens BancShares Inc. (Nasdaq:FCNCA) reports earnings for the quarter ending June 30, 2012, of $37.6 million, compared to $21.3 million for the corresponding period of 2011, according to Frank B. Holding Jr., chairman of the board. The increase in net income in 2012 resulted from higher net interest income and a reduction in provision for loan and lease losses, partially offset by lower noninterest income and an increase in noninterest expense.

Per share income for the second quarter 2012 totaled $3.66, compared to $2.04 for the same period a year ago. First Citizens' current quarter results generated an annualized return on average assets of 0.71 percent and an annualized return on average equity of 7.80 percent, compared to respective returns of 0.42 percent and 4.94 percent for the same period of 2011.

For the six-month period ending June 30, 2012, net income equaled $73.1 million, compared to $83.1 million for the corresponding period of 2011. Earnings for 2011 included an acquisition gain of $63.5 million resulting from an FDIC-assisted transaction involving United Western Bank of Denver, Colorado (United Western). No acquisition gains have been recorded in 2012. The after-tax impact of the 2011 gain was $38.6 million. The increase in net income excluding acquisition gains was the result of higher net interest income offset by a reduction in noninterest income.

Per share income for the six-month period ending June 30, 2012, totaled $7.11, compared to $7.96 for the same period a year ago. First Citizens' year-to-date results generated an annualized return on average assets of 0.69 percent and an annualized return on average equity of 7.70 percent, compared to respective returns of 0.79 percent and 9.43 percent for the same period of 2011.

The general level and comparability of BancShares' results of operations for 2012 and 2011 are affected by FDIC-assisted transactions. Acquisition gains are recorded at the date of the transaction and result from the difference between the estimated fair values of acquired assets and assumed liabilities. Various post-acquisition adjustments to the carrying value of acquired assets may have a significant impact on net interest income, provision for loan and lease losses and noninterest income. Accretable fair value discounts recorded on acquired loans are recognized in income over the estimated life of the loans, with accelerated accretion recognized if repayments occur sooner than originally estimated. In cases where post-acquisition deterioration of credit quality is identified for acquired loans, allowances are established through the provision for loan and lease losses. When credit quality improves subsequent to the acquisition date, fair value discounts that were initially identified as nonaccretable are reclassified as accretable and are recognized as interest income over the remaining life of the loan. For loans and other real estate (OREO) covered under FDIC loss share agreements, the net increase or decrease in the estimated recoverable amount resulting from deterioration or improvement is recognized as an adjustment to the FDIC receivable with an offset to noninterest income.

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