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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended September 30, 2004

 

or

 

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Commission File Number: 0-16471

 

 

First Citizens BancShares, Inc

(Exact name of Registrant as specified in its charter)

 

 

Delaware   56-1528994

(State or other jurisdiction of

incorporation or organization)

  

(I.R.S. Employer

Identification Number)

 

3128 Smoketree Court, Raleigh, North Carolina   27604
(Address of principle executive offices)   (Zip code)

 

(919) 716-7000

(Registrant’s telephone number, including area code)

 

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days.    Yes  x    No  ¨

 

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act)    Yes  x    No  ¨

 

Class A Common Stock—$1 Par Value—8,756,778 shares

Class B Common Stock—$1 Par Value—1,677,675 shares

(Number of shares outstanding, by class, as of November 5, 2004)

 

Table of Contents

INDEX

 

          Page(s)
PART I.    FINANCIAL INFORMATION     
Item 1.    Financial Statements (Unaudited)     
     Consolidated Balance Sheets at September 30, 2004, December 31, 2003, and September 30, 2003    4
    

Consolidated Statements of Income for the three- and nine-month periods ended September 30, 2004, and September 30, 2003

    5
    

Consolidated Statements of Changes in Shareholders’ Equity for the nine-month periods ended September 30, 2004, and September 30, 2003

    6
    

Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2004, and September 30, 2003

    7
     Notes to Consolidated Financial Statements    8-10
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations    11-26
Item 3.    Quantitative and Qualitative Disclosures about Market Risk    21
Item 4.    Controls and Procedures     

 

  (a) BancShares’ management evaluated the effectiveness of the design and operation of BancShares’ disclosure controls and procedures in accordance with Rule 13a-15 of the Securities Exchange Act of 1934 (Exchange Act). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, BancShares’ disclosure controls and procedures were effective in enabling it to record, process, summarize and report in a timely manner the information required to be disclosed in reports it files under the Exchange Act.

 

  (b) No change in BancShares’ internal control over financial reporting occurred during the third quarter of 2004 that materially affected, or is reasonably likely to materially affect, BancShares’ internal control over financial reporting.

 

2

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PART II. OTHER INFORMATION

 

Item 6. Exhibits.

 

  31.1 Certification of Chief Executive Officer
  31.2 Certification of Chief Financial Officer
  32 Certifications of Chief Executive Officer and Chief Financial Officer

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Dated: November 5, 2004   FIRST CITIZENS BANCSHARES, INC.
                (Registrant)
    By:  

/s/ Kenneth A. Black

        Kenneth A. Black
        Vice President, Treasurer and Chief Financial Officer

 

3

Table of Contents

Consolidated Balance Sheets

 

First Citizens BancShares, Inc. and Subsidiaries

 

(thousands, except share data)

    September 30*
2004
    December 31#
2003
    September 30*
2003

Assets

                     

Cash and due from banks

    $ 666,482    $ 790,168    $ 790,166

Overnight investments

      468,543      294,405      268,636

Investment securities held to maturity

      843,428      1,226,717      1,474,801

Investment securities available for sale

      1,184,409      1,242,730      1,172,028

Loans

      9,150,859      8,326,598      8,026,502

Less reserve for loan losses

      127,857      119,357      117,747
    
  
  

Net loans

      9,023,002      8,207,241      7,908,755

Premises and equipment

      562,488      539,616      534,339

Income earned not collected

      40,411      41,929      42,055

Other assets

      230,336      217,102      196,856
    
  
  

Total assets

    $ 13,019,099    $ 12,559,908    $ 12,387,636
    
  
  

Liabilities

                     

Deposits:

                     

Noninterest-bearing

    $ 2,442,815    $ 2,178,897    $ 2,126,874

Interest-bearing

      8,682,181      8,532,435      8,436,261
    
  
  

Total deposits

      11,124,996      10,711,332      10,563,135

Short-term borrowings

      457,617      430,191      472,631

Long-term obligations

      286,437      289,277      256,752

Other liabilities

      82,035      99,803      79,440
    
  
  

Total liabilities

      11,951,085      11,530,603      11,371,958

Shareholders’ Equity

                     

Common stock:

                     

Class A - $1 par value (8,756,778; 8,758,670 and 8,758,670 shares issued, respectively)

      8,757      8,759      8,759

Class B - $1 par value (1,677,675 shares issued during all periods)

      1,678      1,678      1,678

Surplus

      143,766      143,766      143,766

Retained earnings

      905,718      864,470      850,766

Accumulated other comprehensive income

      8,095      10,632      10,709
    
  
  

Total shareholders’ equity

      1,068,014      1,029,305      1,015,678
    
  
  

Total liabilities and shareholders’ equity

    $ 13,019,099    $ 12,559,908    $ 12,387,636
    
  
  
* Unaudited
# Derived from the 2003 Annual Report on Form 10-K.

 

See accompanying Notes to Consolidated Financial Statements.

 

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Consolidated Statements of Income

 

First Citizens BancShares, Inc. and Subsidiaries

 

     Three Months Ended September 30
     Nine Months Ended September 30

(thousands, except per share data; unaudited)

    2004
    2003
     2004
     2003

Interest income

                              

Loans

    $ 118,306    $ 109,395     $ 339,660     $ 334,982

Investment securities:

                              

U. S. Government

      11,077      14,226       35,578       44,878

State, county and municipal

      67      38       210       113

Dividends

      292      316       856       1,041
    
  
 
 

Total investment securities interest and dividend income

      11,436      14,580       36,644       46,032

Overnight investments

      1,669      912       3,461       4,120
    
  
 
 

Total interest income

      131,411      124,887       379,765       385,134

Interest expense

                              

Deposits

      26,987      28,587       77,072       98,470

Short-term borrowings

      874      748       2,262       2,044

Long-term obligations

      5,459      5,238       16,333       15,722
    
  
 
 

Total interest expense

      33,320      34,573       95,667       116,236
    
  
 
 

Net interest income

      98,091      90,314       284,098       268,898

Provision for loan losses

      7,972      6,353       25,736       19,108
    
  
 
 

Net interest income after provision for loan losses

      90,119      83,961       258,362       249,790

Noninterest income

                              

Service charges on deposit accounts

      21,254      20,124       61,206       58,034

Cardholder and merchant services income

      16,918      14,795       47,319       41,275

Trust income

      4,178      3,687       12,794       11,153

Fees from processing services

      5,991      5,177       17,786       15,402

Commission income

      6,250      6,097       19,026       18,167

ATM income

      2,605      2,351       7,663       6,654

Mortgage income

      1,935      4,829       6,423       13,186

Gain on sale of branches to a related party

      —        —         —         5,710

Other service charges and fees

      3,209      3,537       9,947       11,196

Securities gains

      —        179       1,852       309

Other

      1,294      1,960       4,062       4,249
    
  
 
 

Total noninterest income

      63,634      62,736       188,078       185,335

Noninterest expense

                              

Salaries and wages

      52,668      50,885       155,161       148,209

Employee benefits

      11,977      11,543       37,338       35,121

Occupancy expense

      11,014      10,657       33,291       31,563

Equipment expense

      12,156      13,515       37,309       37,692

Other

      32,566      31,878       97,526       92,414
    
  
 
 

Total noninterest expense

      120,381      118,478       360,625       344,999
    
  
 
 

Income before income taxes

      33,372      28,219       85,815       90,126

Income taxes

      16,504      8,672       35,744       31,513
    
  
 
 

Net income

    $ 16,868    $ 19,547     $ 50,071     $ 58,613
    
  
 
 

Other comprehensive income (loss) net of taxes

                              

Unrealized securities gains (losses) arising during period

    $ 7,533    $ (681 )   $ (1,416 )   $ 2,240

Less: reclassified adjustment for gains included in net income

      —        108       1,121       187
    
  
 
 

Other comprehensive income (loss)

      7,533      (789 )     (2,537 )     2,053
    
  
 
 

Comprehensive income

    $ 24,401    $ 18,758     $ 47,534     $ 60,666
    
  
 
 

Average shares outstanding

      10,434,453      10,436,345       10,435,514       10,457,976

Net income per share

    $ 1.62    $ 1.87     $ 4.80     $ 5.60
    
  
 
 

 

See accompanying Notes to Consolidated Financial Statements.

 

5

Table of Contents

Consolidated Statements of Changes in Shareholders’ Equity

 

First Citizens BancShares, Inc. and Subsidiaries