10-QPeriod: Q2 FY2015

FIRST CITIZENS BANCSHARES INC /DE/ Quarterly Report for Q2 Ended Jun 30, 2015

Filed August 5, 2015For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

First Citizens BancShares, Inc. reported strong financial performance for the six months ended June 30, 2015, driven by significant acquisitions and organic loan growth. Net income more than doubled to $111.7 million, or $9.30 per share, compared to $49.2 million, or $5.11 per share, in the prior year period. This growth was bolstered by the acquisition of Capitol City Bank & Trust Company (CCBT) and First Citizens Bancorporation, Inc. (Bancorporation), which contributed positively to interest and non-interest income. The company demonstrated robust asset quality, with nonperforming assets decreasing by 15.1% sequentially. The allowance for loan and lease losses remained adequately positioned relative to the loan portfolio. BancShares also maintained strong capital ratios, exceeding regulatory requirements under Basel III, indicating a solid financial foundation. The company's liquidity position was also strong, with substantial free liquidity available.

Financial Highlights

31 data points
Beta

Net Income

$44.52M

EPS (Diluted)

$3.71

Total Assets

$30.90B

Cash & Equivalents

$514.40M

Free Cash Flow

-$4.43M

Financial Statements
Beta
Interest Expense$11.36M
Net Income$44.52M
EPS (Basic)$3.71
Shares Outstanding (Basic)12.01M

Key Highlights

  • 1Net income for the first six months of 2015 was $111.7 million, a substantial increase from $49.2 million in the same period of 2014.
  • 2Earnings per share (EPS) increased to $9.30 for the first six months of 2015 from $5.11 in the prior year period.
  • 3Total assets grew significantly, driven by acquisitions, reaching $30.9 billion as of June 30, 2015.
  • 4Nonperforming assets decreased by 15.1% quarter-over-quarter to $155.4 million, reflecting improved asset quality.
  • 5The company maintained strong capital ratios, exceeding regulatory minimums under Basel III.
  • 6Net interest margin improved to 3.31% in Q2 2015 from 3.18% in Q1 2015 and 3.29% in Q2 2014.
  • 7Noninterest income saw a significant increase driven by acquisition-related gains and core fee income growth.

Frequently Asked Questions

The significant increase in net income was primarily driven by the successful completion of the Bancorporation merger and the FDIC-assisted acquisition of Capitol City Bank & Trust Company (CCBT). These acquisitions contributed to higher interest and non-interest income, alongside organic loan growth.

Asset quality has shown improvement. Nonperforming assets decreased by 15.1% from the prior quarter, and 11.8% year-over-year, to $155.4 million. This reduction was driven by decreases in both other real estate owned (OREO) and nonaccrual loans, indicating effective credit management.

First Citizens BancShares, Inc. maintained a strong capital position, exceeding regulatory requirements under Basel III. Key ratios such as the Tier 1 risk-based capital ratio (12.66%), common equity Tier 1 ratio (12.52%), and leverage capital ratio (8.92%) at June 30, 2015, were all well above minimum thresholds.

The net interest margin showed improvement, standing at 3.31% for the second quarter of 2015, up from 3.18% in the first quarter of 2015 and slightly up from 3.29% in the second quarter of 2014. This improvement was attributed to higher investment yields, loan growth, and increased accretion income from purchased credit-impaired (PCI) loans.