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TheStreet Open House

First Citizens Reports Earnings For Fourth Quarter 2012

RALEIGH, N.C., March 1, 2013 (GLOBE NEWSWIRE) -- First Citizens BancShares Inc. (Nasdaq:FCNCA) reports earnings for the quarter ended December 31, 2012, of $21.7 million, compared to $30.5 million for the corresponding period of 2011, according to Frank B. Holding Jr., chairman of the board. Net income for the fourth quarter of 2012 decreased $8.8 million, or 28.8 percent, from the same quarter of 2011.

Per share income for the fourth quarter of 2012 totaled $2.15, compared to $2.97 for the same period a year ago. First Citizens' current quarter results generated an annualized return on average assets of 0.41 percent and an annualized return on average equity of 4.43 percent, compared to respective returns of 0.58 percent and 6.48 percent for the same period of 2011. Fourth quarter 2012 earnings declined due to lower noninterest income resulting from adjustments to the FDIC receivable, partially offset by higher net interest income and lower provision for loan and lease losses.

For the year ended December 31, 2012, net income equaled $134.3 million, or $13.11 per share, compared to $195.0 million, or $18.80 per share, during 2011. Net income as a percentage of average assets was 0.64 percent during 2012, compared to 0.92 percent during 2011. The return on average equity was 7.01 percent for 2012, compared to 10.77 percent for 2011. The $60.7 million, or 31.1 percent decrease in 2012 net income was primarily due to 2011 acquisition gains that had an after-tax impact of $91.5 million or $8.79 per share. No acquisition gains were recorded in 2012. Net income for 2012 was also affected by a reduction in the provision for loan and lease losses on covered loans, lower noninterest expense and higher net interest income.

The comparability of BancShares' results of operations for the fourth quarter and year ending December 31, 2012, are affected by the FDIC-assisted transactions. Acquisition gains, recorded at the date of the transaction, 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 interest income over the estimated life of the loans, with accelerated accretion recognized if repayments occur sooner than originally estimated. When 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 date of acquisition, fair value discounts that were initially identified as nonaccretable are reclassified as accretable and are recognized over the remaining life of the loan, and the FDIC receivable is amortized over the shorter of the loan life or the indemnification period. For loans and other real estate (OREO) covered by 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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