10-QPeriod: Q1 FY2015

FIRST CITIZENS BANCSHARES INC /DE/ Quarterly Report for Q1 Ended Mar 31, 2015

Filed May 7, 2015For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

First Citizens BancShares, Inc. /DE/ (FCNCA) reported a solid first quarter in 2015, demonstrating significant year-over-year growth driven by strategic acquisitions and organic loan expansion. Net income rose substantially to $63.8 million, or $5.31 per share, from $22.5 million, or $2.34 per share, in the prior year period. This performance was bolstered by a $37.6 million gain on the acquisition of Capitol City Bank & Trust Company (CCBT) and the ongoing integration of the Bancorporation merger completed in late 2014. The company's balance sheet expanded, with total assets reaching $30.85 billion, up from $30.08 billion at the end of 2014. Deposits also grew to $26.3 billion, reflecting strong core deposit retention and contributions from the CCBT acquisition. While the net interest margin saw some compression compared to the prior year due to a declining PCI loan portfolio and prevailing low interest rates, overall interest-earning assets grew, supported by improved investment yields and continued loan growth. Noninterest income saw a significant uplift, largely due to the CCBT acquisition gain and contributions from other fee-based services. Asset quality remained robust, with nonperforming assets decreasing year-over-year. The company maintained strong capital ratios, exceeding regulatory requirements under the newly implemented Basel III guidelines. Overall, FCNCA presented a positive financial picture for the first quarter of 2015, characterized by strategic growth, enhanced profitability, and a stable financial foundation.

Financial Highlights

31 data points
Beta

Net Income

$67.16M

EPS (Diluted)

$5.59

Total Assets

$30.85B

Cash & Equivalents

$495.90M

Free Cash Flow

$49.55M

Financial Statements
Beta
Interest Expense$11.35M
Net Income$67.16M
EPS (Basic)$5.59
Shares Outstanding (Basic)12.01M

Key Highlights

  • 1Net income surged to $63.8 million ($5.31 per share) in Q1 2015, a significant increase from $22.5 million ($2.34 per share) in Q1 2014, driven by acquisitions and organic growth.
  • 2The acquisition of Capitol City Bank & Trust Company (CCBT) on February 13, 2015, contributed a $37.6 million gain and expanded the company's Georgia presence.
  • 3Total assets grew to $30.85 billion as of March 31, 2015, up from $30.08 billion at December 31, 2014, reflecting continued balance sheet expansion.
  • 4Total deposits increased to $26.3 billion, demonstrating strong core deposit retention and contributions from recent acquisitions.
  • 5Noninterest income rose substantially to $145.4 million in Q1 2015, up from $62.3 million in Q1 2014, largely due to the CCBT acquisition gain and increased fee income.
  • 6Capital ratios remained strong, exceeding regulatory requirements under the newly implemented Basel III guidelines, with a Tier 1 risk-based capital ratio of 12.91% and a Tier 1 leverage ratio of 8.89% at March 31, 2015.
  • 7Asset quality remained stable, with nonperforming assets as a percentage of total loans, leases, and OREO at 0.95% as of March 31, 2015, down from 1.37% in the prior year.

Frequently Asked Questions

The substantial increase in net income from $22.5 million in Q1 2014 to $63.8 million in Q1 2015 was primarily driven by the gain recognized from the acquisition of Capitol City Bank & Trust Company (CCBT) and the ongoing integration and benefits from the Bancorporation merger completed in late 2014.

Total assets increased to $30.85 billion from $30.08 billion at the end of the previous quarter. Deposits also saw growth, reaching $26.3 billion, supported by organic growth and the CCBT acquisition. Loan and lease balances also grew to $19.1 billion.

The net interest margin experienced some compression year-over-year (3.18% in Q1 2015 vs. 3.26% in Q1 2014) due to the declining PCI loan portfolio and prevailing low interest rates. However, improved investment yields, organic loan growth, and lower funding costs are expected to provide some support, with the company continuing to manage the impact of portfolio runoff.

First Citizens BancShares maintained a strong capital position, exceeding regulatory requirements. As of March 31, 2015, under the newly implemented Basel III guidelines, the company reported a Tier 1 risk-based capital ratio of 12.91% and a Tier 1 leverage ratio of 8.89%, indicating a well-capitalized status.