10-KPeriod: FY2016

FIRST CITIZENS BANCSHARES INC /DE/ Annual Report, Year Ended Dec 31, 2016

Filed February 22, 2017For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

First Citizens BancShares, Inc. (FCNCA) reported solid performance in its 2016 10-K filing, with net income increasing by 7.2% to $225.5 million, or $18.77 per share. This growth was primarily driven by higher net interest income stemming from strong core loan growth and increased investment interest income, alongside a rise in non-interest income. The company successfully integrated three acquisitions during the year (Cordia Bancorp, First CornerStone Bank, and North Milwaukee State Bank), which contributed to loan and deposit growth. BancShares maintained strong capital positions, exceeding Basel III requirements. The bank's strategic initiatives focused on diversifying its loan portfolio, enhancing fee-based income streams through credit card and wealth management services, and optimizing operational efficiency through cost management and technology investments. Despite challenges in the interest rate environment, the company maintained a focus on managing interest rate risk to benefit from a rising rate environment. The filing also highlights a concentration in loans to the medical and dental industries and potential risks associated with real estate market conditions, particularly junior liens.

Financial Highlights

34 data points
Beta

Net Income

$225.48M

EPS (Diluted)

$18.77

Total Assets

$32.99B

Cash & Equivalents

$539.74M

Free Cash Flow

$148.66M

Financial Statements
Beta
Interest Expense$43.08M
Net Income$225.48M
EPS (Basic)$18.77
Shares Outstanding (Basic)12.01M

Key Highlights

  • 1Net income increased by 7.2% to $225.5 million ($18.77 per share) in 2016, up from $210.4 million ($17.52 per share) in 2015.
  • 2The company completed three acquisitions in 2016: Cordia Bancorp, First CornerStone Bank, and North Milwaukee State Bank.
  • 3Total assets grew to $32.99 billion as of December 31, 2016, from $31.48 billion at the end of 2015.
  • 4Net interest income increased by 2.1% to $944.7 million, driven by strong originated loan growth and higher investment interest income.
  • 5Non-interest income rose by 4.5% to $488.1 million, boosted by gains on securities, early termination of FDIC shared-loss agreements, and growth in merchant and cardholder income.
  • 6Non-interest expense increased slightly by 0.9% to $1.05 billion, managed through cost control initiatives.
  • 7BancShares maintained robust capital ratios, exceeding Basel III minimums and well-capitalized standards across all key metrics (Tier 1 risk-based capital, common equity Tier 1, total risk-based capital, and leverage capital).

Frequently Asked Questions

First Citizens BancShares reported a net income of $225.5 million, or $18.77 per share, for the year ended December 31, 2016. This represents a 7.2% increase compared to the $210.4 million ($17.52 per share) reported in 2015.

In 2016, First Citizens BancShares completed three acquisitions: Cordia Bancorp, First CornerStone Bank, and North Milwaukee State Bank. These acquisitions contributed to growth in the company's loan and deposit portfolios during the year.

First Citizens BancShares maintained strong capital adequacy throughout 2016, exceeding all minimum requirements under the Basel III regulatory capital guidelines. Key ratios such as the Tier 1 risk-based capital ratio (12.42%), common equity Tier 1 ratio (12.42%), total risk-based capital ratio (13.85%), and leverage capital ratio (9.05%) were all comfortably above the required thresholds, indicating a well-capitalized status.

The increase in net interest income was primarily attributed to strong originated loan growth and higher interest income earned on the investment portfolio. These factors were partially offset by a decline in interest income from the Purchased Credit Impaired (PCI) loan portfolio due to its continued run-off.