10-KPeriod: FY2020

FIRST CITIZENS BANCSHARES INC /DE/ Annual Report, Year Ended Dec 31, 2020

Filed February 24, 2021For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

First Citizens BancShares, Inc. (FCNCA) reported a solid year in 2020, with net income increasing by 7.5% to $491.7 million, or $47.50 per share. This growth was driven by a 5.9% increase in net interest income, largely due to loan growth, including significant participation in the SBA-PPP program. Noninterest income also saw a healthy increase of 14.6%, boosted by gains on investment securities and strong mortgage income. The company is in the process of a significant transformation with its pending merger with CIT Group Inc., which is expected to create a larger, more diversified institution with over $100 billion in assets. This merger is anticipated to enhance their commercial lending capabilities and expand their geographic and product reach, though integration risks and expenses are noted. Despite the low-interest-rate environment, BancShares maintained strong capital and liquidity positions, exceeding regulatory requirements. The company returned capital to shareholders through share repurchases and dividends, demonstrating a commitment to shareholder value. Management is focused on strategic growth, operational efficiency, and adapting to evolving digital technologies.

Financial Highlights

39 data points
Beta

Net Income

$492.00M

EPS (Diluted)

$47.50

Total Assets

$49.96B

Cash & Equivalents

$362.00M

Free Cash Flow

$243.00M

Financial Statements
Beta
Interest Expense$96.00M
Net Income$492.00M
EPS (Basic)$47.50
EPS (Diluted)$47.50
Shares Outstanding (Basic)10.06M
Shares Outstanding (Diluted)10.06M

Key Highlights

  • 1Net income increased by 7.5% to $491.7 million in 2020, with earnings per share reaching $47.50.
  • 2Net interest income grew by 5.9% driven by loan growth, including significant participation in the SBA-PPP program.
  • 3Noninterest income increased by 14.6%, boosted by gains on investment securities and mortgage income.
  • 4The company is pursuing a significant merger with CIT Group Inc., expected to close in the first half of 2021, creating a combined entity with over $100 billion in assets.
  • 5BancShares maintained strong capital and liquidity positions, exceeding regulatory requirements.
  • 6The company returned $364.5 million to shareholders in 2020 through share repurchases and dividends.
  • 7Adoption of ASC 326 (CECL) in 2020 impacted the methodology for calculating the allowance for credit losses, with a net decrease in the allowance upon adoption.

Frequently Asked Questions

For the year ended December 31, 2020, First Citizens BancShares reported a net income of $491.7 million, or $47.50 per share, an increase of 7.5% from the previous year. Net interest income grew by 5.9% to $1.39 billion, driven by loan growth and SBA-PPP program participation. Noninterest income also increased by 14.6% to $476.8 million.

The most significant event is the pending merger with CIT Group Inc., announced in October 2020 and expected to close in the first half of 2021. This transaction is expected to create a larger, more diversified bank with over $100 billion in assets, combining CIT's commercial lending franchise with First Citizens' retail deposit base. The company also completed several smaller acquisitions in prior years.

BancShares adopted the CECL (ASC 326) methodology in 2020, which changed how credit losses are estimated. The company recorded a provision for credit losses of $58.4 million, an increase from $31.4 million in 2019, partly due to a $36.1 million reserve build related to COVID-19 uncertainties. Despite economic challenges, overall credit quality remained stable, with nonperforming assets representing 0.74% of total loans at year-end.