8-KAcquisitions & DispositionsMaterial AgreementsExhibits & Filings

FIRST CITIZENS BANCSHARES INC /DE/ 8-K Report, Material Agreement (Jan 27, 2011)

Filed January 27, 2011For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

On January 21, 2011, First Citizens BancShares, Inc. (FCNCA), through its wholly-owned subsidiary First-Citizens Bank & Trust Company (FCB), entered into a significant agreement with the Federal Deposit Insurance Corporation (FDIC) to acquire substantially all the assets and assume the majority of the liabilities of United Western Bank. This transaction, which occurred at a discount of $213 million with no premium paid for deposits, represents a strategic move to expand FCB's footprint and asset base. United Western Bank reported total assets of $2.1 billion, net loans and leases of $1.3 billion, and total deposits of $1.7 billion as of September 30, 2010, providing a substantial addition to FCB's existing operations. Notably, the acquired loans and other real estate are covered by loss-share agreements with the FDIC, which will mitigate certain risks for FCB. While detailed financial impacts and pro forma information are pending and will be filed in an amendment, this acquisition signals a proactive approach by First Citizens BancShares to capitalize on market opportunities in the banking sector. Investors should monitor upcoming filings for a more comprehensive understanding of the transaction's effect on the company's financial health and future performance.

Key Highlights

  • 1First-Citizens Bank & Trust Company (FCB), a subsidiary of FCNCA, acquired substantially all assets and liabilities of United Western Bank.
  • 2The acquisition was structured with a discount of $213 million and no premium paid for deposits.
  • 3United Western Bank had $2.1 billion in total assets, $1.3 billion in net loans/leases, and $1.7 billion in deposits as of September 30, 2010.
  • 4FCB will benefit from FDIC loss-share agreements covering certain risks on acquired loans and real estate.
  • 5The transaction was executed with the FDIC acting as Receiver for United Western Bank.
  • 6Detailed financial statements and pro forma information related to the acquisition will be provided in a future amendment to this filing.

Frequently Asked Questions

This 8-K filing announces that First Citizens BancShares, Inc.'s subsidiary, First-Citizens Bank & Trust Company, has entered into a material definitive agreement to acquire substantially all assets and assume most liabilities of United Western Bank from the FDIC. It also reports the completion of this acquisition.

The acquisition was completed at a discount of $213 million, meaning the value of assets acquired exceeded liabilities assumed by that amount. Importantly, no premium was paid for the deposits of United Western Bank.

The FDIC loss-share agreements are crucial for First-Citizens Bank as they provide coverage for certain losses that may be incurred on the acquired loans and other real estate. This significantly reduces the risk exposure for the acquiring bank.

The filing states that estimates of the anticipated effects on the financial condition, liquidity, capital resources, and operating results will be provided in an amendment to this report once the FDIC provides final information on the acquired assets and assumed liabilities. This includes financial statements of the acquired business and pro forma financial information.