8-K/AAcquisitions & DispositionsExhibits & Filings

FIRST CITIZENS BANCSHARES INC /DE/ 8-K/A Report, Acquisition Completed (Dec 21, 2009)

Filed December 21, 2009For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

This Form 8-K/A filing from First Citizens BancShares Inc. (FCNCA) provides an amendment to a previous report concerning the acquisition of Venture Bank by its subsidiary, First-Citizens Bank & Trust Company (FCB). The amendment primarily serves to update disclosures and provide required financial information related to this acquisition, which occurred on September 11, 2009. The acquisition was structured as a purchase of assets and assumption of liabilities, with FCB receiving a discount on assets and paying no deposit premium. This filing highlights the significant role of the Federal Deposit Insurance Corporation (FDIC) in facilitating the transaction through loss-sharing agreements, designed to mitigate potential losses on acquired loans and real estate. The report details the fair values of assets acquired and liabilities assumed, including loans, other real estate owned (OREO), and deposits. The FDIC loss-sharing agreements are a critical component, with the FDIC agreeing to cover a substantial percentage of losses on specified assets for defined periods. This structure was implemented due to Venture Bank being a troubled financial institution and the unavailability of its historical financial statements. The acquisition is expected to enhance net interest income, though the full impact on earnings and cash flows is subject to the performance of the acquired loan portfolio and the terms of the FDIC loss-sharing agreements.

Key Highlights

  • 1First Citizens BancShares' subsidiary, FCB, acquired substantially all assets and assumed liabilities of Venture Bank on September 11, 2009.
  • 2The acquisition was facilitated by a discount on acquired assets ($110.0 million) and no deposit premium paid.
  • 3Key financial figures include $794.1 million in fair value of acquired assets and $784.9 million in assumed liabilities, with $457.0 million in loans and $43.0 million in OREO.
  • 4Significant FDIC loss-sharing agreements are in place, covering 80% of losses up to $235.0 million and 95% of losses above that threshold for acquired loans and OREO.
  • 5The transaction resulted in a $46.2 million gain, recognized in non-interest income.
  • 6The acquisition is expected to improve net interest income, with potential loan quality issues largely mitigated by FDIC loss-sharing.
  • 7Despite the acquisition, both First Citizens BancShares and FCB maintained 'well-capitalized' status at September 30, 2009.

Frequently Asked Questions

This filing is an amendment to a previous report. Its primary purpose is to update disclosures and provide the necessary financial information regarding the acquisition of Venture Bank by First Citizens BancShares' subsidiary, FCB, which occurred on September 11, 2009. This includes details on assets acquired, liabilities assumed, and the financial impact of the transaction.

The FDIC loss-sharing agreements are crucial as they provide First Citizens Bank & Trust Company (FCB) with significant protection against potential losses on the acquired loans and Other Real Estate Owned (OREO) from Venture Bank. The FDIC will cover 80% of covered losses up to $235.0 million and 95% of losses exceeding that amount, significantly de-risking the acquisition for FCNCA.

The acquisition resulted in a recognized gain of $46.2 million, included in non-interest income. The company expects the transaction to improve net interest income, as interest earned on acquired assets is anticipated to outweigh interest paid on assumed liabilities. While potential loan quality issues exist, the FDIC loss-sharing agreements are expected to offset adverse impacts on earnings and cash flows.

The fair value of acquired assets was $794.1 million, including $457.0 million in loans and $43.0 million in OREO. Assumed liabilities totaled $784.9 million, primarily consisting of $709.1 million in deposits. FCB received a discount of $110.0 million on the acquired assets.