10-QPeriod: Q2 FY2011

FIRST CITIZENS BANCSHARES INC /DE/ Quarterly Report for Q2 Ended Jun 30, 2011

Filed August 9, 2011For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

First Citizens BancShares, Inc. /DE/ (FCNCA) reported its financial results for the quarter ending June 30, 2011. The company's total assets were $21.02 billion, a slight increase from the previous quarter and year-over-year. Net income for the second quarter of 2011 was $21.3 million, a decrease from $28.6 million in the prior year's second quarter. This decline was largely attributed to acquisition gains recognized in the first quarter of 2010 from FDIC-assisted transactions, which were partially offset by acquisition gains from the United Western transaction in the first quarter of 2011. The company's net interest income showed a significant increase of 25.8% year-over-year, driven by balance sheet growth from acquisitions and discount accretion on acquired loans. However, the provision for loan and lease losses also increased substantially due to the post-acquisition deterioration of covered loans. Noninterest income decreased due to unfavorable adjustments related to FDIC receivables. The company continues to actively participate in FDIC-assisted transactions, which have provided growth opportunities and protection against asset quality risks through loss-share agreements.

Financial Highlights

31 data points
Beta

Net Income

$21.30M

Total Assets

$21.02B

Cash & Equivalents

$537.72M

Free Cash Flow

$103.91M

Financial Statements
Beta
Interest Expense$38.23M
Net Income$21.30M
Shares Outstanding (Basic)10.42M

Key Highlights

  • 1Total assets remained stable at $21.02 billion as of June 30, 2011.
  • 2Second quarter 2011 net income was $21.3 million, down from $28.6 million in Q2 2010.
  • 3Net interest income increased significantly by 25.8% year-over-year to $207.4 million, driven by acquisitions and loan discount accretion.
  • 4Provision for loan and lease losses rose significantly to $54.0 million in Q2 2011 from $31.8 million in Q2 2010, primarily due to deterioration in covered loans.
  • 5Noninterest income decreased by 28% year-over-year due to adjustments related to FDIC receivables.
  • 6The company actively participated in FDIC-assisted transactions, including the acquisition of United Western Bank, which contributed to balance sheet growth and generated acquisition gains.
  • 7Capital ratios remained strong, comfortably exceeding regulatory minimums.

Frequently Asked Questions

First Citizens BancShares reported a net income of $21.3 million for the second quarter of 2011, compared to $28.6 million in the same quarter of 2010. This decrease was largely due to acquisition gains recorded in the prior year's quarter.

FDIC-assisted transactions, such as the acquisition of United Western Bank, contributed to balance sheet growth and generated acquisition gains. These transactions also included loss-share agreements with the FDIC, providing protection against asset quality risks. However, post-acquisition deterioration in some covered loans led to an increase in the provision for loan losses.

Net interest income increased by 25.8% year-over-year, primarily due to balance sheet growth resulting from FDIC-assisted acquisitions and a significant increase in discount accretion on acquired loans. This was partially offset by a reversal of accrued interest on acquired loans placed on nonaccrual.

Yes, the company's capital ratios, including Tier 1 risk-based capital and Tier 1 leverage capital, comfortably exceeded the minimum regulatory requirements as of June 30, 2011, indicating a strong capital position.