10-QPeriod: Q1 FY2021

FIRST CITIZENS BANCSHARES INC /DE/ Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 4, 2021For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

First Citizens BancShares, Inc. (FCNCA) reported strong first-quarter 2021 results, with net income significantly increasing by 157.7% year-over-year to $147.3 million, translating to earnings per common share of $14.53, up from $5.46 in the prior year period. This robust performance was driven by a substantial increase in noninterest income, largely due to favorable fair market value adjustments on marketable equity securities and strong mortgage income. The company also benefited from continued deposit growth, with total deposits reaching $47.3 billion, a 36.4% annualized increase from the end of 2020. Despite a decline in net interest margin (NIM) to 2.80% from 3.55% year-over-year, primarily due to a shift towards lower-yielding overnight investments and a decrease in overall asset yields, net interest income saw a slight increase. This was supported by interest and fee income from Small Business Administration Paycheck Protection Program (SBA-PPP) loans and organic loan growth. The company's balance sheet remains strong, with total assets growing to $53.9 billion and capital ratios well exceeding regulatory requirements. The pending merger with CIT Group Inc. is progressing, with an anticipated closing in mid-2021, which is expected to further enhance the company's market position.

Financial Highlights

36 data points
Beta

Net Income

$147.00M

EPS (Diluted)

$14.53

Total Assets

$53.91B

Cash & Equivalents

$410.00M

Free Cash Flow

$101.00M

Financial Statements
Beta
Operating Expenses$297.00M
Interest Expense$15.00M
Net Income$147.00M
EPS (Basic)$14.53
EPS (Diluted)$14.53
Shares Outstanding (Basic)9.82M
Shares Outstanding (Diluted)9.82M

Key Highlights

  • 1Net income surged by 157.7% year-over-year to $147.3 million, with EPS rising to $14.53 from $5.46.
  • 2Noninterest income increased significantly by 113.5% to $136.6 million, driven by strong performance in marketable equity securities and mortgage income.
  • 3Total deposits grew robustly by 36.4% on an annualized basis to $47.3 billion, indicating strong customer confidence and liquidity.
  • 4Net interest margin (NIM) compressed by 75 basis points to 2.80%, primarily due to an increased allocation to lower-yielding overnight investments.
  • 5Total loans and leases increased by 4.8% on an annualized basis to $33.2 billion, with SBA-PPP loans contributing significantly.
  • 6The company maintained strong capital adequacy ratios, exceeding regulatory requirements.
  • 7The merger with CIT Group Inc. is on track for a mid-2021 closing, subject to regulatory approvals.

Frequently Asked Questions

The primary driver of the significant increase in net income was a substantial rise in noninterest income, which grew by 113.5% year-over-year. This was largely attributed to favorable fair market value adjustments on the company's marketable equity securities portfolio and robust performance in mortgage income.

The company experienced strong deposit growth, with total deposits increasing by 36.4% on an annualized basis to $47.3 billion. This growth was fueled by organic deposit increases, funding from SBA-PPP loans, and government stimulus checks.

The merger with CIT Group Inc. is progressing as planned. Regulatory and shareholder approvals have been obtained, and the company anticipates closing the transaction in mid-2021, subject to final regulatory approvals and customary closing conditions.

The net interest margin (NIM) decreased by 75 basis points to 2.80% compared to the prior year's first quarter. This compression was mainly due to an increase in the proportion of lower-yielding overnight investments within the asset mix and a general decline in yields on interest-earning assets, partially offset by lower rates paid on interest-bearing deposits.