01—Abstract
Summary
Summary of the 10-K filed February 25, 2022. Cited figures are marked; the original filing is the authoritative source.
First Citizens BancShares, Inc. (FCNCA) reported its 2021 annual results, highlighting the significant completion of its merger with CIT Group Inc. (CIT) on January 3, 2022.
This merger is transformative, more than doubling the company's asset size and positioning it as a top-tier U.S. bank. The integration of CIT's nationwide commercial lending and digital banking capabilities with FCNCA's robust retail franchise is expected to yield substantial synergies and expand the company's market reach and product offerings. Financially, for the year ended December 31, 2021, FCNCA reported net income available to common shareholders of $528.9 milliona, or $53.88 per share, a notable increase from the previous year, despite a slight decrease in net interest margin due to balance sheet mix changes and lower yields.
The company maintained a strong capital position with all regulatory capital ratios well above requirements. Credit quality remained robust with a low net charge-off ratio and a decrease in nonperforming assets. The company ended the year with substantial liquidity, providing a strong foundation for future growth and operational initiatives.
02—Key points
Key Highlights
- Completed the significant merger with CIT Group Inc. on January 3, 2022, effectively doubling the company's asset size to over $100 billion.
- Reported a net income available to common shareholders of $528.9 million ($53.88 per share) for the year ended December 31, 2021, an increase from the prior year.
- Maintained strong regulatory capital ratios, with Total Risk-Based Capital at 14.35%, Tier 1 Risk-Based Capital at 12.47%, Common Equity Tier 1 at 11.50%, and Tier 1 Leverage at 7.59%, all exceeding Basel III minimums.
- Demonstrated robust credit quality with a net charge-off to average loans ratio of 0.03% for 2021 and a decrease in nonperforming assets to 0.49% of total loans.
- Ended the year with strong liquidity, reporting $16.41 billion in liquid assets and significant contingent liquidity sources.
- Increased total deposits by 18.4% to $51.41 billion, driven by growth in demand, checking, and money market accounts, primarily from commercial customers.
- Announced plans to eliminate NSF fees and significantly lower overdraft fees on consumer accounts starting mid-2022, responding to regulatory scrutiny and market trends.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 25, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Interest Expense | $61.00M$96.00M | −36.5% |
| Net Income | $547.00M$492.00M | +11.2% |
| EPS (Basic) | $53.88$47.50 | +13.4% |
| EPS (Diluted) | $53.88$47.50 | +13.4% |
| Shares Outstanding (Basic) | 9.82M10.06M | −2.4% |
| Shares Outstanding (Diluted) | 9.82M10.06M | −2.4% |
05—Questions
Frequently Asked Questions
What was the most significant event for First Citizens BancShares in 2021?
The most significant event was the completion of the merger with CIT Group Inc. on January 3, 2022. This transformative transaction more than doubled the company's asset size, creating a larger, more diversified financial institution.
How did the company's financial performance fare in 2021?
For the year ended December 31, 2021, net income available to common shareholders was $528.9 million, or $53.88 per share, an increase from the prior year. The company maintained strong capital and liquidity positions.
What is the company's outlook on interest rates and net interest margin?
The company noted that interest rates were near historical lows, which presented challenges. While the balance sheet is asset-sensitive, they aim to reduce volatility from interest rate movements. The net interest margin decreased in 2021 compared to 2020, primarily due to changes in earning asset mix and lower yields, partially offset by lower deposit rates.
How is the company managing credit risk?
The company maintains a strong focus on credit quality, with a low net charge-off ratio and a decrease in nonperforming assets. The allowance for credit losses was maintained at levels management believes are adequate, considering macroeconomic factors and loan portfolio performance.
06—Continue