10-KPeriod: FY2013

FIRST CITIZENS BANCSHARES INC /DE/ Annual Report, Year Ended Dec 31, 2013

Filed February 26, 2014For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

First Citizens BancShares, Inc. /DE/ (FCNCA) filed its 2013 10-K, detailing a solid financial performance driven by a recovery in the banking sector and strategic growth initiatives. The company reported net income of $167.7 million, or $17.43 per share, a significant increase from the previous year, reflecting improved net interest income after provisions and higher noninterest income. While net interest income saw a decrease due to the shrinkage of acquired loans, the provision for loan and lease losses was a credit in 2013, a positive swing from the prior year, indicating improved credit quality. The company continued its strategy of expanding its branch network, operating 397 branches across 18 states and Washington D.C. as of December 31, 2013. It also successfully integrated several FDIC-assisted transactions, which provided significant growth opportunities and risk protection through loss share agreements. Looking ahead, BancShares is focused on modernizing its technology systems, with a significant investment of over $100 million planned over the next few years to enhance business continuity and reduce operational risk.

Financial Highlights

33 data points
Beta

Net Income

$166.87M

EPS (Diluted)

$17.35

Total Assets

$21.19B

Cash & Equivalents

$533.60M

Free Cash Flow

$264.97M

Financial Statements
Beta
Interest Expense$56.62M
Net Income$166.87M
EPS (Basic)$17.35
Shares Outstanding (Basic)9.62M

Key Highlights

  • 1Net income increased to $167.7 million ($17.43 per share) in 2013, up from $134.3 million ($13.11 per share) in 2012.
  • 2The company operated 397 branches across 18 states and Washington D.C. as of December 31, 2013.
  • 3BancShares participated in six FDIC-assisted transactions between 2009 and 2011, leveraging strong capital and liquidity.
  • 4A significant investment of over $100 million is planned for technology system modernization through 2016.
  • 5The company's Tier 1 risk-based capital ratio was 14.92% as of December 31, 2013, well above regulatory requirements.
  • 6Nonperforming assets decreased to $165.6 million (1.25% of total loans and OREO) at year-end 2013, down from $310.4 million (2.29%) in 2012.
  • 7The company declared a cash dividend of $1.20 per share for 2013, consistent with previous years.

Frequently Asked Questions

The increase in net income for 2013 was primarily driven by a reduction in the provision for loan and lease losses, which swung from an expense of $142.9 million in 2012 to a credit of $32.3 million in 2013, and higher noninterest income, partially offset by lower net interest income.

FDIC-assisted transactions provided significant growth opportunities and allowed the company to expand its presence in existing and adjacent markets. These transactions included loss share agreements that protect the company from a substantial portion of credit and asset quality risk. While these transactions contributed to income statement volatility due to amortization and accretion accounting, the net impact in 2013 was favorable to current earnings.

The company is investing over $100 million to modernize its core technology systems and related business processes, a project expected to be implemented in phases through 2016. This initiative aims to improve business continuity, disaster recovery efforts, and reduce operational risk. Additionally, the company has a new brand line, 'Forever First®', emphasizing its commitment to customers and communities, supported by targeted product bundles for families and small businesses.

BancShares remains well-capitalized, with its Tier 1 common equity ratio at 14.26% as of December 31, 2013, significantly exceeding the fully phased-in Basel III requirement of 7.00%. The company is actively monitoring Basel developments and committed to managing its capital prudently, ensuring it continues to meet and exceed regulatory requirements.