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First Citizens Reports Earnings For Fourth Quarter 2013

RALEIGH, N.C., Jan. 30, 2014 (GLOBE NEWSWIRE) -- First Citizens BancShares Inc. (Nasdaq:FCNCA) reports earnings for the quarter ended December 31, 2013, of $27.2 million, compared to $21.7 million for the corresponding period of 2012, according to Frank B. Holding, Jr., chairman of the board. Net income for the fourth quarter of 2013 increased $5.5 million, or 25.2 percent, from the same quarter of 2012. The increase in net income reflects significantly lower provision for loan and lease losses and improved noninterest income, partially offset by lower net interest income.

Per share income for the fourth quarter of 2013 totaled $2.83, compared to $2.15 for the same period of 2012. First Citizens' current quarter results generated an annualized return on average assets of 0.50 percent and an annualized return on average equity of 5.37 percent, compared to respective returns of 0.41 percent and 4.43 percent for the same period of 2012.

For the year ended December 31, 2013, net income totaled $167.7 million, or $17.43 per share, compared to $134.3 million, or $13.11 per share, during 2012. The return on average assets was 0.79 percent during 2013, compared to 0.64 percent during 2012. The return on average shareholders' equity was 8.63 percent and 7.01 percent for the respective periods. The $33.4 million, or 24.8 percent, increase in net income during 2013 primarily resulted from significantly lower provision for loan and lease losses and higher noninterest income, partially offset by lower net interest income.

FINANCIAL HIGHLIGHTS

  • Loan growth continued during the fourth quarter of 2013, as total originated loans increased $219.7 million from September 30, 2013, to December 31, 2013; during the fourth quarter of 2013, originated loan growth exceeded acquired loan run-off; originated loans increased $528.2 million, or 4.6 percent, from December 31, 2012, to December 31, 2013; for both the fourth quarter and full year, commercial mortgage loan growth was especially notable.  
  • Acquired loan balances continue to decline due to repayments of performing loans and resolution of problem assets; acquired loan balances totaled $1.03 billion at December 31, 2013, down $158.9 million since September 30, 2013, and down $779.8 million, or 43.1 percent, since December 31, 2012.  
  • Provision for loan and lease losses declined significantly during both the fourth quarter and full year of 2013 due to improving credit quality and lower net charge-offs; provision expense equaled $7.3 million during the fourth quarter of 2013, compared to $64.9 million during the fourth quarter of 2012; BancShares recorded a $32.3 million credit to provision expense for the year ended December 31, 2013, compared to provision expense of $142.9 million for the year ended December 31, 2012.  
  • Asset quality continues to improve; as of December 31, 2013, BancShares' nonperforming assets amounted to $165.6 million, compared to $310.4 million as of December 31, 2012, with reductions noted among both acquired and originated assets; net charge-offs totaled $11.7 million for the fourth quarter of 2013, compared to $22.4 million during the same period of 2012; net charge-offs totaled $60.7 million for 2013, compared to $94.0 million for 2012.  
  • For both the fourth quarter of 2013 and the full year, loans acquired in the FDIC-assisted transactions continued to have a material impact on earnings. Significant acquisition-related variances affecting earnings include:
  • During the fourth quarter of 2013, BancShares recorded $44.9 million in acquired loan accretion income, compared to $110.6 million during the fourth quarter of 2012, as the acquired loan portfolio continues to decline due to repayments and resolutions; acquired loan accretion income totaled $224.7 million during 2013 compared to $304.0 million during 2012.
  • During the fourth quarter of 2013, BancShares recorded a $0.8 million credit to acquired loan provision expense, compared to provision expense of $62.3 million during the fourth quarter of 2012 due to credit quality improvements; for 2013, BancShares recorded a $51.5 million credit to acquired loan provision expense, compared to provision expense of $100.8 million during 2012.
  • During the fourth quarters of 2013 and 2012, noninterest income included reductions of $6.5 million and $36.5 million resulting from adjustments to the FDIC receivable and recoveries of acquired loans previously charged off; for 2013 and 2012, FDIC receivable adjustments and recoveries reduced noninterest income by $42.6 million and $91.1 million, respectively.
  • BancShares' liquidity position continues to be very strong. As of December 31, 2013, BancShares had more than $3.39 billion in cash and securities that could easily be converted to cash.  
  • BancShares remains well capitalized with a tier 1 leverage ratio of 9.82 percent at December 31, 2013, up 59 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 16.42 percent and 14.92 percent at December 31, 2013, respectively.

LOANS AND DEPOSITS

Originated loan growth was very strong during the fourth quarter, improving $219.7 million, or 1.8 percent from September 30, 2013. Originated loans totaled $12.10 billion at December 31, 2013, an increase of $528.2 million, or 4.6 percent, from December 31, 2012. Originated loan demand during 2013 was particularly strong among commercial mortgage loans.

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