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First Citizens Reports Earnings For Third Quarter 2013

RALEIGH, N.C., Nov. 7, 2013 (GLOBE NEWSWIRE) -- First Citizens BancShares Inc. (Nasdaq:FCNCA) reports earnings for the quarter ended September 30, 2013, of $41.0 million, compared to $39.5 million for the corresponding period of 2012, according to Frank B. Holding, Jr., chairman of the board. The increase in net income in 2013 reflects significantly lower provision for loan and lease losses, partially offset by lower net interest income, both of which primarily relate to acquired loans.

Per share income for the third quarter of 2013 totaled $4.26, compared to $3.85 for the same period a year ago. First Citizens' current quarter results generated an annualized return on average assets of 0.76 percent and an annualized return on average equity of 8.32 percent, compared to respective returns of 0.74 percent and 8.08 percent for the same period of 2012.

For the first nine months of 2013, net income totaled $140.5 million, compared to $112.6 million during the same period of 2012, the result of lower provision for loan and lease losses, partially offset by lower net interest income.

Net income for 2013 represents $14.60 per share outstanding, compared to $10.96 per share for 2012. The annualized return on average assets was 0.89 percent for the first nine months of 2013, compared to 0.72 percent for the same period of 2012. The annualized return on shareholders' equity was 9.79 percent and 7.89 percent for the respective periods.

THIRD QUARTER FINANCIAL HIGHLIGHTS

  • Asset quality remains strong and is improving. The provision for loan and lease losses improved $25.3 million during the third quarter of 2013 when compared to the same period of 2012, primarily due to the reversal of previously recorded impairment on acquired loans and lower current impairment on originated loans. Net charge-offs totaled $12.8 million for the third quarter of 2013, compared to $14.0 million during the same period of 2012.  
  • The six FDIC-assisted transactions completed between 2009 and 2011 continue to have a material impact on earnings. Significant variances affecting earnings during the third quarter of 2013 compared to the same period a year ago include:
  • $19.8 million of noninterest income related to recoveries of acquired loan balances previously charged off, net of amounts shared with the FDIC under loss share agreements, compared to $3.2 million recognized during the third quarter of 2012;  
  • $12.6 million credit to provision for loan and lease losses in 2013, reflecting the continued resolution of problem acquired loans, compared to provision expense of $10.2 million recorded during the third quarter of 2012;  
  • $47.9 million in acquired loan accretion income, compared to $67.6 million during the third quarter of 2012, as the acquired loan portfolio continues to decline due to repayments.
  • BancShares' liquidity position continues to be very strong. As of September 30, 2013, BancShares' free liquidity position exceeded $3.84 billion. Average investment securities increased $289.7 million, or 5.9 percent, compared to the third quarter of 2012.  
  • BancShares remains well-capitalized with a tier 1 leverage capital ratio of 9.84 percent at September 30, 2013, up 61 basis points from December 31, 2012. Both the total risk-based capital and tier 1 risk-based capital ratios increased from December 31, 2012, to levels of 16.54 percent and 15.04 percent at September 30, 2013, respectively. First Citizens BancShares remains committed to effectively managing capital to protect depositors, creditors and shareholders.  
  • Originated loans increased $308.5 million, or 2.7 percent, from December 31, 2012, to September 30, 2013. Originated commercial mortgage loans grew $278.8 million, or 4.6 percent, since December 31, 2012.  
  • Acquired loan balances continue to decline due to resolution of problem assets and repayments of performing loans. Acquired loan balances totaled $1.19 billion at September 30, 2013, down $621.0 million since December 31, 2012.  
  • Cash dividends of $0.30 per share were declared during the third quarter of 2013, consistent with cash dividends declared during 2012.

LOANS AND DEPOSITS

Originated loan growth improved significantly during the third quarter. Originated loans totaled $11.88 billion at September 30, 2013, an increase of $308.5 million, or 2.7 percent, from December 31, 2012, and up $229.1 million, or 2.0 percent, since June 30, 2013. Originated loan demand was particularly strong among commercial mortgage loans.

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