FIRST CITIZENS BANCSHARES INC /DE/ - 10-Q Quarterly Report

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 March 31, 2005

¨	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 May 6, 2005)

INDEX


		Page(s)
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Consolidated Balance Sheets at March 31, 2005, December 31, 2004, and March 31, 2004	3

	Consolidated Statements of Income for the three-month periods ended March 31, 2005, and March 31, 2004	4

	Consolidated Statements of Changes in Shareholders’ Equity for the three-month periods ended March 31, 2005, and March 31, 2004	5

	Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2005, and March 31, 2004	6

	Notes to Consolidated Financial Statements	7-9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	10

Item 4.	Controls and Procedures	27

PART II.	OTHER INFORMATION

Item 6.	Exhibits.	27

PART I

Item 1. Financial Statements (Unaudited)

Consolidated Balance Sheets

First Citizens BancShares, Inc. and Subsidiaries


(thousands, except share data)	March 31* 2005			December 31# 2004		March 31* 2004
Assets
Cash and due from banks	$	599,358		$	679,683	$	639,658
Overnight investments		642,461			383,743		622,212
Investment securities held to maturity		850,792			877,479		1,064,751
Investment securities available for sale		1,336,582			1,248,045		1,085,987
Loans and leases		9,404,742			9,354,387		8,616,987
Less allowance for loan and lease losses		125,710			123,861		114,675

Net loans and leases		9,279,032			9,230,526		8,502,312
Premises and equipment		605,724			568,365		542,340
Income earned not collected		43,619			40,574		39,336
Other assets		235,107			237,296		217,641

Total assets	$	13,592,675		$	13,265,711	$	12,714,237

Liabilities
Deposits:
Noninterest-bearing	$	2,561,043		$	2,443,059	$	2,225,397
Interest-bearing		9,068,339			8,907,739		8,570,139

Total deposits		11,629,382			11,350,798		10,795,536
Short-term borrowings		465,000			447,686		467,895
Long-term obligations		285,312			285,943		289,118
Other liabilities		110,413			94,974		114,605

Total liabilities		12,490,107			12,179,401		11,667,154
Shareholders’ Equity
Common stock:
Class A - $1 par value (8,756,778; 8,756,778 and 8,758,670 shares issued, respectively)		8,757			8,757		8,759
Class B - $1 par value (1,677,675 shares issued, respectively, for all periods)		1,678			1,678		1,678
Surplus		143,766			143,766		143,766
Retained earnings		949,749			927,621		878,931
Accumulated other comprehensive income (loss)		(1,382	)		4,488		13,949

Total shareholders’ equity		1,102,568			1,086,310		1,047,083

Total liabilities and shareholders’ equity	$	13,592,675		$	13,265,711	$	12,714,237

Unaudited

#	Derived from the 2004 Annual Report on Form 10-K.

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Income

First Citizens BancShares, Inc. and Subsidiaries


	Three Months Ended March 31
(thousands, except share and per share data; unaudited)	2005			2004
Interest income
Loans and leases	$	132,343		$	109,594
Investment securities:
U. S. Government		12,467			12,920
State, county and municipal		66			73
Other		371			269

Total investment securities interest and dividend income		12,904			13,262
Overnight investments		2,998			838

Total interest income		148,245			123,694
Interest expense
Deposits		35,346			25,122
Short-term borrowings		1,813			692
Long-term obligations		5,419			5,413

Total interest expense		42,578			31,227

Net interest income		105,667			92,467
Provision for loan and lease losses		5,326			7,847

Net interest income after provision for loan and lease losses		100,341			84,620
Noninterest income
Service charges on deposit accounts		18,693			19,371
Cardholder and merchant services income		16,253			14,129
Trust income		4,488			4,310
Fees from processing services		6,220			5,856
Commission income		6,263			6,554
ATM income		2,480			2,394
Mortgage income		1,506			1,976
Other service charges and fees		4,215			3,461
Securities gains		—			1,852
Other		1,105			1,640

Total noninterest income		61,223			61,543
Noninterest expense
Salaries and wages		51,726			51,067
Employee benefits		12,515			12,570
Occupancy expense		11,438			11,330
Equipment expense		12,507			12,650
Other		33,159			31,279

Total noninterest expense		121,345			118,896

Income before income taxes		40,219			27,267
Income taxes		15,222			9,936

Net income		24,997			17,331

Other comprehensive income (loss) net of taxes
Unrealized securities gains (losses) arising during period		(5,870	)		4,438
Less: reclassified adjustment for gains included in net income		—			1,121

Other comprehensive income (loss)		(5,870	)		3,317

Comprehensive income	$	19,127		$	20,648

Average shares outstanding		10,434,453			10,436,345
Net income per share	$	2.40		$	1.66

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Changes in Shareholders’ Equity

First Citizens BancShares, Inc. and Subsidiaries


(thousands,except share data, unaudited)	Class A Common Stock		Class B Common Stock		Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance at December 31, 2003	$	8,759	$	1,678	$	143,766	$	864,470		$	10,632		$	1,029,305
Net income								17,331						17,331
Unrealized securities gains, net of deferred taxes											3,317			3,317
Cash dividends								(2,870	)					(2,870	)

Balance at March 31, 2004	$	8,759	$	1,678	$	143,766	$	878,931		$	13,949		$	1,047,083

Balance at December 31, 2004	$	8,757	$	1,678	$	143,766	$	927,621		$	4,488		$	1,086,310
Net income								24,997						24,997
Unrealized securities losses, net of deferred taxes											(5,870	)		(5,870	)
Cash dividends								(2,869	)					(2,869	)

Balance at March 31, 2005	$	8,757	$	1,678	$	143,766	$	949,749		$	(1,382	)	$	1,102,568

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Cash Flows

First Citizens BancShares, Inc. and Subsidiaries


	Three months ended March 31,
	2005			2004
	(thousands)
OPERATING ACTIVITIES
Net income	$	24,997		$	17,331
Adjustments to reconcile net income to cash provided by operating activities:
Amortization of intangibles		625			581
Provision for loan losses		5,326			7,847
Deferred tax (benefit) expense		(3,384	)		1,612
Change in current taxes payable		15,967			7,040
Depreciation		10,987			11,103
Change in accrued interest payable		435

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