First Citizens BancShares Inc. (BancShares) (Nasdaq: FCNCA)
reported strong earnings for the second quarter of 2019, according
to Frank B. Holding, Jr., Chairman of the Board. Key results for
the quarter ended June 30, 2019, are presented below:
|
SECOND QUARTER RESULTS |
| |
|
|
|
|
|
|
|
|
|
|
|
Q2 2019 |
Q2 2018 |
|
Q2 2019 |
Q2 2018 |
|
Q2 2019 |
Q2 2018 |
|
Q2 2019 |
Q2 2018 |
|
$119.4 |
$93.3 |
|
$10.56 |
$7.77 |
|
1.29% |
1.08% |
|
13.50% |
11.00% |
| Net income (in
millions) |
|
Net income per
share |
|
Return on average
assets |
|
Return on average
equity |
| |
|
|
|
|
|
|
|
|
|
|
|
YEAR-TO-DATE (YTD) RESULTS |
| |
|
|
|
|
|
|
|
|
|
|
|
YTD 2019 |
YTD 2018 |
|
YTD 2019 |
YTD 2018 |
|
YTD 2019 |
YTD 2018 |
|
YTD 2019 |
YTD 2018 |
|
$230.7 |
$193.5 |
|
$20.23 |
$16.11 |
|
1.28% |
1.13% |
|
13.19% |
11.59% |
| Net income (in
millions) |
|
Net income per
share |
|
Return on average
assets |
|
Return on average
equity |
|
SECOND QUARTER HIGHLIGHTS |
| |
|
|
Net income |
Net income for the
second quarter of 2019 totaled $119.4 million, an increase of $26.1
million, or 27.9% compared to the same quarter in 2018. Net income
increased $2.79 on a per share basis, or 35.9%, to $10.56 in the
second quarter of 2019, from $7.77 per share during the same period
in 2018. |
| |
|
|
Return on average assets and equity |
Return on average
assets for the second quarter of 2019 improved by 21 basis points
over the second quarter of 2018 to 1.29%. The increase was
primarily due to higher net interest margin. Return on average
equity for the second quarter of 2019 improved 250 basis points
over the second quarter of 2018 to 13.50%. |
| |
|
|
Net interest income and net interest margin |
BancShares reported
total net interest income of $327.3 million for the second quarter
of 2019, an increase of $31.1 million or 10.5%, compared to the
same quarter in 2018. The taxable-equivalent net interest margin
(NIM) was 3.79% for the second quarter of 2019, up 15 basis points
from 3.64% during the same quarter in 2018. |
| |
|
|
Operating performance |
Noninterest income
totaled $106.9 million for the second quarter of 2019, compared to
$100.9 million for the same quarter of 2018. Noninterest expense
was $273.4 million for the second quarter of 2019, compared to
$266.0 million during the same quarter of 2018. |
| |
|
|
Loans and credit quality |
Total loans grew to
$26.73 billion, an increase of $1.26 billion since March 31,
2019. Of this growth, $1.03 billion was due to recently acquired
banks and the remainder was due to organic growth. Provision
expense totaled $5.2 million for the second quarter of 2019, a
decrease of $3.2 million compared to the same quarter in 2018. The
net charge-off ratio was 0.11% for the second quarter of 2019,
unchanged for the same quarter in 2018. |
| |
|
|
Deposits |
Total deposits grew
to $32.72 billion, an increase of $1.52 billion since March 31,
2019. The growth from recent acquisitions totaled $1.04 billion,
while the remaining $484.5 million was due to organic growth. |
| |
|
|
Capital |
BancShares
repurchased 205,500 shares of its Class A common stock during the
second quarter of 2019 totaling approximately $89.8 million. At
June 30, 2019, BancShares remained well capitalized with a total
risk-based capital ratio of 13.3%, a Tier 1 risk-based capital
ratio and common equity Tier 1 ratio of 12.0% and a leverage ratio
of 9.4%. |
| |
|
|
|
|
RECENT MERGER ACTIVITY
On April 23, 2019, BancShares’ bank subsidiary
First-Citizens Bank & Trust Company (First Citizens Bank)
entered into a definitive merger agreement for the acquisition of
Franklin, North Carolina-based Entegra Financial Corp. (Entegra)
and its bank subsidiary, Entegra Bank. Under the terms of the
agreement, cash consideration of $30.18 per share will be paid to
the shareholders of Entegra for each share of common stock and for
each restricted stock unit after conversion to common stock, and
each outstanding option to purchase Entegra common stock will be
canceled and each option holder will receive a cash payment. The
total transaction value is anticipated to be approximately $219.8
million. The transaction is anticipated to close during the second
half of 2019, subject to the receipt of regulatory approvals, the
approval of Entegra’s shareholders and the satisfaction of other
customary closing conditions. As of March 31, 2019, Entegra
reported $1.67 billion in consolidated assets, $1.08 billion in
loans and $1.25 billion in deposits.
On May 1, 2019, First Citizens Bank completed
the merger of Spartanburg, South Carolina-based First South
Bancorp, Inc. (First South Bancorp) and its bank subsidiary, First
South Bank. Under the terms of the agreement, cash consideration of
$1.15 per share was paid to the shareholders of First South Bancorp
for each share of common stock, totaling approximately $37.5
million. The merger allowed First Citizens Bank to expand its
presence in South Carolina. The merger contributed $253.0 million
in consolidated assets, which included $179.2 million in loans and
$207.6 million in deposits as of the merger date.
On April 2, 2019, First Citizens Bank
completed the merger of Coconut Grove, Florida-based Biscayne
Bancshares, Inc. (Biscayne Bancshares) and its bank subsidiary,
Biscayne Bank. Under the terms of the agreement, cash consideration
of $25.05 per share was paid to the shareholders of Biscayne
Bancshares for each share of common stock, totaling approximately
$118.9 million. The merger allowed First Citizens Bank to expand
its presence in Florida and enhance banking efforts in South
Florida. The merger contributed $1.08 billion in consolidated
assets, which included $863.4 million in loans, and $786.5 million
in deposits as of the merger date.
NET INTEREST INCOME
Net interest income for second quarter of 2019
totaled $327.3 million, an increase of $31.1 million, or 10.5%,
compared to the second quarter of 2018. The taxable-equivalent NIM
was 3.79% in the second quarter of 2019, an increase of 15 basis
points from 3.64% for the same quarter in the prior year. The
primary driver of this growth was a $42.1 million, or 24 basis
points, increase in interest and fees on loans due to a rise in
average loans outstanding, as well as higher loan yields. This
growth was partially offset by a $14.6 million, or 30 basis points,
increase in interest expense on deposits due to higher rates on
time deposits and money market accounts.
Net interest income for the six months ended
June 30, 2019, totaled $647.8 million, an increase of $67.2
million, or 11.6%, compared to the same period of 2018. The
taxable-equivalent NIM was 3.84% for the six months ended June 30,
2019, an increase of 23 basis points for the same period in the
prior year. Similar to the discussion above, the primary driver of
the growth was an $81.1 million, or 27 basis points, increase to
interest and fees on loans due to a rise in average loans
outstanding, as well as a higher loan yields. This growth was
partially offset by a $23.8 million, or 25 basis points, increase
to interest expense on deposits due to higher rates on time
deposits and money market accounts.
Although net interest margin has expanded in
recent years, management does not believe this trend will continue
as new loan yields are declining due to changes in forward rate
expectations and increased competition. This trend, coupled with
higher interest expense on deposits will likely result in margin
compression for the remainder of 2019.
PROVISION FOR LOAN AND LEASE LOSSES
BancShares recorded net provision expense of
$5.2 million and $16.9 million for the three and six months ended
June 30, 2019, as compared to $8.4 million and $16.0 million,
respectively, for the same periods in 2018. The fluctuations in
provision expense are primarily due to variances in loan growth
balances for the periods, as well as changes in portfolio
composition and credit quality. The net charge-off ratio remained
stable at 0.11% for all periods presented.
NONINTEREST INCOME
Noninterest income for the second quarter of
2019 totaled $106.9 million, an increase of $5.9 million from the
second quarter of 2018. Noninterest income, excluding realized
gains on securities sales and a positive fair value adjustment on
marketable equity securities, totaled $98.0 million for the three
months ended June 30, 2019, compared to $96.5 million for the same
period in 2018. This $1.5 million increase was primarily driven by
a $3.6 million increase in cardholder services income due to
increased interchange rates and transaction volume, as well as
reduced processing fees. This increase was partially offset by a
$0.9 million decline in recoveries on acquired loans, as well as a
$0.9 million decrease in wealth services income.
Noninterest income for the first six months of
2019 totaled $210.5 million, a decrease of $13.1 million from the
same period of 2018. Noninterest income, excluding gains on
extinguishment of debt, realized gains on securities sales and a
positive fair value adjustment on marketable equity securities,
totaled $190.3 million for the six months ended June 30, 2019,
compared to $192.4 million for the same period in 2018. This $2.0
million reduction was primarily driven by a $2.9 million decrease
in service charges on deposit accounts and ATM income and a $2.6
million decrease in recoveries on acquired loans. Offsetting these
reductions was a $5.4 million increase in cardholder services
income due to increased transaction volume and interchange rates,
as well as reduced processing fees.
NONINTEREST EXPENSE
Noninterest expense totaled $273.4 million for
the second quarter of 2019, a $7.4 million increase compared to the
same period in 2018. The increase was largely driven by a $7.2
million increase in personnel-related expenses primarily due to
increased salaries and wages as a result of merit increases and
personnel additions from recent acquisitions, a $3.3 million
increase in equipment expense and a $1.7 million increase in
merger-related expense due to recent acquisition activity.
Offsetting these increases were a $2.7 million reduction in FDIC
insurance expense as the large bank surcharge was eliminated in the
fourth quarter of 2018 and a $1.2 million decline in processing
fees paid to third parties driven by the elimination of fees on
recently converted acquired banks.
Noninterest expense totaled $541.1 million for
the first six months of 2019, a $7.0 million increase compared to
the same period of 2018. The increase was largely driven by a $10.8
million increase in personnel-related expenses largely due to
increased salaries and wages as a result of merit increases, as
well as increased headcount from recent acquisitions, a $5.1
million increase in equipment expense and a $2.8 million increase
in merger-related expense due to recent acquisition activity.
Offsetting these increases were a $5.8 million reduction in FDIC
insurance expense and a $2.4 million decline in processing fees
paid to third parties.
INCOME TAXES
Income tax expense totaled $36.3 million and
$29.4 million for the second quarter of 2019 and 2018,
respectively, representing effective tax rates of 23.3% and 24.0%
for the respective periods.
Income tax expense totaled $69.6 million and
$60.6 million for the first six months of 2019 and 2018,
respectively, representing effective tax rates of 23.2% and 23.9%
for the respective six month periods.
LOANS AND DEPOSITS
At June 30, 2019, loans totaled $26.73
billion, an increase of $1.26 billion since March 31, 2019. Of
this current quarter increase, $1.03 billion was due to the recent
acquisitions of Biscayne Bancshares and First South Bancorp while
the remaining $230.9 million was primarily due to organic growth in
the commercial mortgage and residential mortgage portfolios. Total
loans have increased $1.20 billion since December 31, 2018;
excluding acquired loans, total loans increased $171.4 million, or
by 1.4% on an annualized basis.
At June 30, 2019, deposits totaled $32.72
billion, an increase of $1.52 billion since March 31, 2019. Of
this current quarter increase, $1.04 billion was due to the recent
acquisitions of Biscayne Bancshares and First South Bancorp while
the remaining $484.5 million was primarily due to organic growth in
checking, money market, and time deposit accounts. Total deposits
have increased $2.05 billion since December 31, 2018; excluding
acquired deposits, total deposits increased $1.01 billion, or by
6.6% on an annualized basis.
ALLOWANCE FOR LOAN AND LEASE LOSSES
The allowance for loan and lease losses was
$226.6 million at June 30, 2019, compared to $228.8 million at
March 31, 2019. The reduction in the allowance during the
second quarter was primarily due to changes in overall portfolio
composition and credit quality, as well as declines in the reserves
on specifically reviewed loans. The allowance as a percentage of
total loans was 0.85% at June 30, 2019, compared to 0.90% at
March 31, 2019 and 0.88% at December 31, 2018. The net
charge-off ratio remained stable at 0.11% for all periods
presented.
NONPERFORMING ASSETS
BancShares’ nonperforming assets, including
nonaccrual loans and other real estate owned, were $151.2 million
or 0.57% of total loans at June 30, 2019, compared to $133.9
million or 0.53% of total loans at March 31, 2019. The $17.3
million increase was primarily due to an increase in nonaccrual
loans primarily within the commercial and residential mortgage
portfolios, as well as nonperforming assets acquired from Biscayne
Bancshares and First South Bancorp of $7.9 million.
SHARES REPURCHASED
In October 2018, BancShares’ Board of Directors
authorized the repurchase of up to 800,000 of BancShares’ Class A
common stock for the period November 1, 2018, through October 31,
2019. During the second quarter of 2019, BancShares
repurchased 205,500 shares for approximately $89.8 million at an
average cost per share of $436.81. As of June 30, 2019, a total of
630,500 shares have been repurchased under the current Board
authority, including 425,000 shares repurchased in the first
quarter of 2019. There were no repurchases made during the first
six months of 2018.
In April 2019, the Board authorized additional repurchases not
to exceed 800,000 of BancShares’ Class A common stock for the
period July 1, 2019 through June 30, 2020. This authorization was
effective July 1, 2019 and supersedes the authorization approved in
October 2018.
ABOUT FIRST CITIZENS BANCSHARES
BancShares is the financial holding company for
Raleigh, North Carolina-headquartered First Citizens Bank. First
Citizens Bank provides a broad range of financial services to
individuals, businesses, professionals and the medical community
through branch offices in 19 states, including digital banking,
mobile banking, ATMs and telephone banking. As of June 30,
2019, BancShares had total assets of $37.66 billion.
For more information, visit First Citizens’ website at
firstcitizens.com. First Citizens Bank. Forever First®.
DISCLOSURES ABOUT FORWARD LOOKING
STATEMENTS
The discussions included in this Press Release
may contain forward-looking statements within the meaning of the
Private Securities Litigation Act of 1995, including Section 21E of
the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933. For the purposes of these discussions, any
statements that are not statements of historical fact may be deemed
to be forward-looking statements. Such statements are often
characterized by the use of qualifying words such as “expects,”
“anticipates,” “believes,” “estimates,” “plans,” “projects,” or
other statements concerning opinions or judgments of the Registrant
and its management about future events. Such statements involve
known and unknown risks, uncertainties and other factors that may
cause actual results to differ materially from those described in
the statements. The accuracy of such forward-looking statements
could be affected by factors beyond the Registrant’s control,
including, but not limited to, the financial success or changing
conditions or strategies of the Registrant’s customers or vendors,
fluctuations in interest rates, actions of government regulators,
the availability of capital and personnel, the delay in closing (or
failure to close) one or more of our previously announced
acquisition transaction(s), the failure to realize the anticipated
benefits of our previously announced acquisition transaction(s), or
general competitive, economic, political, and market conditions.
These forward-looking statements are made only as of the date of
this Press Release, and the Registrant undertakes no obligation to
revise or update these statements following the date of this Press
Release, except as may be required by law.
CONSOLIDATED FINANCIAL
HIGHLIGHTS
|
|
|
For the three months ended |
|
|
|
Six months ended June 30 |
|
|
(Dollars in thousands, except share data; unaudited) |
|
June 30, 2019 |
|
|
|
March 31, 2019 |
|
|
|
June 30, 2018 |
|
|
|
2019 |
|
|
|
2018 |
|
| SUMMARY OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$ |
350,721 |
|
|
$ |
336,924 |
|
|
$ |
303,877 |
|
|
$ |
687,645 |
|
|
$ |
596,478 |
|
|
Interest expense |
23,373 |
|
|
16,452 |
|
|
7,658 |
|
|
39,825 |
|
|
15,822 |
|
|
Net interest income |
327,348 |
|
|
320,472 |
|
|
296,219 |
|
|
647,820 |
|
|
580,656 |
|
|
Provision for loan and lease losses |
5,198 |
|
|
11,750 |
|
|
8,438 |
|
|
16,948 |
|
|
16,043 |
|
|
Net interest income after provision for loan and lease losses |
322,150 |
|
|
308,722 |
|
|
287,781 |
|
|
630,872 |
|
|
564,613 |
|
|
Noninterest income |
106,875 |
|
|
103,663 |
|
|
100,927 |
|
|
210,538 |
|
|
223,611 |
|
|
Noninterest expense |
273,397 |
|
|
267,657 |
|
|
265,993 |
|
|
541,054 |
|
|
534,056 |
|
|
Income before income taxes |
155,628 |
|
|
144,728 |
|
|
122,715 |
|
|
300,356 |
|
|
254,168 |
|
|
Income taxes |
36,269 |
|
|
33,369 |
|
|
29,424 |
|
|
69,638 |
|
|
60,646 |
|
|
Net income |
$ |
119,359 |
|
|
$ |
111,359 |
|
|
$ |
93,291 |
|
|
$ |
230,718 |
|
|
$ |
193,522 |
|
|
Taxable-equivalent net interest income |
$ |
328,201 |
|
|
$ |
321,372 |
|
|
$ |
297,021 |
|
|
$ |
649,573 |
|
|
$ |
582,269 |
|
| PER SHARE
DATA |
|
|
|
|
|
|
|
|
|
|
Net income per share |
$ |
10.56 |
|
|
$ |
9.67 |
|
|
$ |
7.77 |
|
|
$ |
20.23 |
|
|
$ |
16.11 |
|
|
Cash dividends per share |
0.40 |
|
|
0.40 |
|
|
0.35 |
|
|
0.80 |
|
|
0.70 |
|
|
Book value at period-end |
319.74 |
|
|
309.46 |
|
|
286.99 |
|
|
319.74 |
|
|
286.99 |
|
| CONDENSED
BALANCE SHEET |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
284,147 |
|
|
$ |
268,599 |
|
|
$ |
260,525 |
|
|
$ |
284,147 |
|
|
$ |
260,525 |
|
|
Overnight investments |
1,640,264 |
|
|
1,386,525 |
|
|
1,223,311 |
|
|
1,640,264 |
|
|
1,223,311 |
|
|
Investment securities |
6,695,578 |
|
|
6,914,513 |
|
|
7,190,545 |
|
|
6,695,578 |
|
|
7,190,545 |
|
|
Loans and leases |
26,728,237 |
|
|
25,463,785 |
|
|
24,538,437 |
|
|
26,728,237 |
|
|
24,538,437 |
|
|
Less allowance for loan and lease losses |
(226,583 |
) |
|
(228,775 |
) |
|
(224,865 |
) |
|
(226,583 |
) |
|
(224,865 |
) |
|
Other assets |
2,533,451 |
|
|
2,157,023 |
|
|
2,100,613 |
|
|
2,533,451 |
|
|
2,100,613 |
|
|
Total assets |
$ |
37,655,094 |
|
|
$ |
35,961,670 |
|
|
$ |
35,088,566 |
|
|
$ |
37,655,094 |
|
|
$ |
35,088,566 |
|
|
Deposits |
$ |
32,719,671 |
|
|
$ |
31,198,093 |
|
|
$ |
30,408,884 |
|
|
$ |
32,719,671 |
|
|
$ |
30,408,884 |
|
|
Other liabilities |
1,360,810 |
|
|
1,240,268 |
|
|
1,232,796 |
|
|
1,360,810 |
|
|
1,232,796 |
|
|
Shareholders’ equity |
3,574,613 |
|
|
3,523,309 |
|
|
3,446,886 |
|
|
3,574,613 |
|
|
3,446,886 |
|
|
Total liabilities and shareholders’ equity |
$ |
37,655,094 |
|
|
$ |
35,961,670 |
|
|
$ |
35,088,566 |
|
|
$ |
37,655,094 |
|
|
$ |
35,088,566 |
|
| SELECTED
PERIOD AVERAGE BALANCES |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
37,049,030 |
|
|
$ |
35,625,885 |
|
|
$ |
34,673,927 |
|
|
$ |
36,338,836 |
|
|
$ |
34,471,833 |
|
|
Investment securities |
6,803,570 |
|
|
6,790,671 |
|
|
7,091,442 |
|
|
6,797,656 |
|
|
7,072,328 |
|
|
Loans and leases |
26,597,242 |
|
|
25,515,988 |
|
|
24,205,363 |
|
|
26,059,602 |
|
|
23,937,221 |
|
|
Interest-earning assets |
34,674,842 |
|
|
33,432,162 |
|
|
32,669,810 |
|
|
34,056,935 |
|
|
32,496,086 |
|
|
Deposits |
32,100,210 |
|
|
30,802,567 |
|
|
30,100,615 |
|
|
31,454,973 |
|
|
29,788,106 |
|
|
Interest-bearing liabilities |
20,397,445 |
|
|
19,655,434 |
|
|
18,885,168 |
|
|
20,028,489 |
|
|
18,957,881 |
|
|
Shareholders’ equity |
3,546,041 |
|
|
3,509,746 |
|
|
3,400,867 |
|
|
3,528,549 |
|
|
3,366,990 |
|
|
Shares outstanding |
11,286,520 |
|
|
11,519,008 |
|
|
12,010,405 |
|
|
11,402,122 |
|
|
12,010,405 |
|
| SELECTED
RATIOS |
|
|
|
|
|
|
|
|
|
|
Annualized return on average assets |
1.29 |
% |
|
1.27 |
% |
|
1.08 |
% |
|
1.28 |
% |
|
1.13 |
% |
|
Annualized return on average equity |
13.50 |
|
|
12.86 |
|
|
11.00 |
|
|
13.19 |
|
|
11.59 |
|
|
Taxable-equivalent net interest margin |
3.79 |
|
|
3.89 |
|
|
3.64 |
|
|
3.84 |
|
|
3.61 |
|
|
Efficiency ratio (1) |
64.3 |
|
|
64.8 |
|
|
67.7 |
|
|
64.6 |
|
|
69.1 |
|
|
Tier 1 risk-based capital ratio |
12.0 |
|
|
12.7 |
|
|
13.1 |
|
|
12.0 |
|
|
13.1 |
|
|
Common equity Tier 1 ratio |
12.0 |
|
|
12.7 |
|
|
13.1 |
|
|
12.0 |
|
|
13.1 |
|
|
Total risk-based capital ratio |
13.3 |
|
|
14.0 |
|
|
14.4 |
|
|
13.3 |
|
|
14.4 |
|
|
Leverage capital ratio |
9.4 |
|
|
9.8 |
|
|
10.0 |
|
|
9.4 |
|
|
10.0 |
|
|
(1) The efficiency ratio is a non-GAAP financial measure which
measures productivity and is generally calculated as noninterest
expense divided by total revenue (net interest income and
noninterest income). The efficiency ratio removes the impact of
BancShares’ securities gains, acquisition gains, one-time gains on
extinguishment of debt, and fair market value adjustment on
marketable equity securities from the calculation. Management uses
this ratio to monitor performance and believes this measure
provides meaningful information to investors. |
ALLOWANCE FOR LOAN AND LEASE LOSSES AND
ASSET QUALITY DISCLOSURES
|
|
|
Three months ended |
|
|
|
Six months ended June 30 |
|
|
(Dollars in thousands, unaudited) |
|
June 30, 2019 |
|
|
|
March 31, 2019 |
|
|
|
June 30, 2018 |
|
|
|
2019 |
|
|
|
2018 |
|
| ALLOWANCE
FOR LOAN AND LEASE LOSSES (ALLL) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLL at beginning of period |
$ |
228,775 |
|
|
$ |
223,712 |
|
|
$ |
223,116 |
|
|
$ |
223,712 |
|
|
$ |
221,893 |
|
|
Provision (credit) expense for loan and lease losses: |
|
|
|
|
|
|
|
|
|
|
PCI loans (1) |
(637 |
) |
|
(164 |
) |
|
161 |
|
|
(801 |
) |
|
2,515 |
|
|
Non-PCI loans (1) |
5,835 |
|
|
11,914 |
|
|
8,277 |
|
|
17,749 |
|
|
13,528 |
|
|
Net charge-offs of loans and leases: |
|
|
|
|
|
|
|
|
|
|
Charge-offs |
(10,602 |
) |
|
(10,154 |
) |
|
(9,712 |
) |
|
(20,756 |
) |
|
(19,409 |
) |
|
Recoveries |
3,212 |
|
|
3,467 |
|
|
3,023 |
|
|
6,679 |
|
|
6,338 |
|
|
Net charge-offs of loans and leases |
(7,390 |
) |
|
(6,687 |
) |
|
(6,689 |
) |
|
(14,077 |
) |
|
(13,071 |
) |
|
ALLL at end of period |
$ |
226,583 |
|
|
$ |
228,775 |
|
|
$ |
224,865 |
|
|
$ |
226,583 |
|
|
$ |
224,865 |
|
|
ALLL at end of period allocated to loans and leases: |
|
|
|
|
|
|
|
|
|
|
PCI |
$ |
8,343 |
|
|
$ |
8,980 |
|
|
$ |
12,423 |
|
|
$ |
8,343 |
|
|
$ |
12,423 |
|
|
Non-PCI |
218,240 |
|
|
219,795 |
|
|
212,442 |
|
|
218,240 |
|
|
212,442 |
|
|
ALLL at end of period |
$ |
226,583 |
|
|
$ |
228,775 |
|
|
$ |
224,865 |
|
|
$ |
226,583 |
|
|
$ |
224,865 |
|
|
Reserve for unfunded commitments |
$ |
1,053 |
|
|
$ |
1,052 |
|
|
$ |
1,554 |
|
|
$ |
1,053 |
|
|
$ |
1,554 |
|
| SELECTED
LOAN DATA |
|
|
|
|
|
|
|
|
|
|
Average loans and leases: |
|
|
|
|
|
|
|
|
|
|
PCI |
$ |
544,250 |
|
|
$ |
579,080 |
|
|
$ |
682,521 |
|
|
$ |
561,574 |
|
|
$ |
708,034 |
|
|
Non-PCI |
25,995,212 |
|
|
24,936,898 |
|
|
23,522,842 |
|
|
25,448,455 |
|
|
23,229,187 |
|
|
Loans and leases at period-end: |
|
|
|
|
|
|
|
|
|
|
PCI |
551,447 |
|
|
557,356 |
|
|
674,269 |
|
|
551,447 |
|
|
674,269 |
|
|
Non-PCI |
26,176,790 |
|
|
24,906,429 |
|
|
23,864,168 |
|
|
26,176,790 |
|
|
23,864,168 |
|
| RISK
ELEMENTS |
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans and leases |
$ |
104,975 |
|
|
$ |
90,625 |
|
|
$ |
86,625 |
|
|
$ |
104,975 |
|
|
$ |
86,625 |
|
|
Other real estate |
46,236 |
|
|
43,306 |
|
|
46,633 |
|
|
46,236 |
|
|
46,633 |
|
|
Total nonperforming assets |
$ |
151,211 |
|
|
$ |
133,931 |
|
|
$ |
133,258 |
|
|
$ |
151,211 |
|
|
$ |
133,258 |
|
|
Accruing loans and leases 90 days or more past due |
$ |
32,787 |
|
|
$ |
37,474 |
|
|
$ |
44,445 |
|
|
$ |
32,787 |
|
|
$ |
44,445 |
|
|
RATIOS |
|
|
|
|
|
|
|
|
|
|
Net charge-offs (annualized) to average loans and leases |
0.11 |
|
|
0.11 |
|
|
0.11 |
|
|
0.11 |
|
|
0.11 |
|
|
ALLL to total loans and leases: |
|
|
|
|
|
|
|
|
|
|
PCI |
1.51 |
|
|
1.61 |
|
|
1.84 |
|
|
1.51 |
|
|
1.84 |
|
|
Non-PCI |
0.83 |
|
|
0.88 |
|
|
0.89 |
|
|
0.83 |
|
|
0.89 |
|
|
Total |
0.85 |
|
|
0.90 |
|
|
0.92 |
|
|
0.85 |
|
|
0.92 |
|
|
Ratio of total nonperforming assets to total loans, leases and
other real estate owned |
0.57 |
|
|
0.53 |
|
|
0.54 |
|
|
0.57 |
|
|
0.54 |
|
(1) Loans and leases are evaluated at
acquisition and where a discount is noted at least in part due to
credit quality, the loans are accounted for under the guidance in
ASC Topic 310-30, Loans and Debt Securities Acquired with
Deteriorated Credit Quality. Loans for which it is probable at
acquisition that all required payments will not be collected in
accordance with the contractual terms are considered purchased
credit-impaired (PCI) loans. PCI loans and leases are recorded at
fair value at the date of acquisition. No allowance for loan and
lease losses is recorded on the acquisition date as the fair value
of the acquired assets incorporates assumptions regarding credit
risk. An allowance is recorded if there is additional credit
deterioration after the acquisition date. Non-PCI loans include
originated and purchased non-impaired loans.
AVERAGE BALANCE AND NET INTEREST MARGIN
SUMMARY
| |
Three months ended |
|
| |
June 30, 2019 |
|
March 31, 2019 |
|
June 30, 2018 |
|
| |
Average |
|
|
|
Yield/ |
|
Average |
|
|
|
Yield/ |
|
Average |
|
|
|
Yield/ |
|
| (Dollars in thousands,
unaudited) |
Balance |
|
Interest |
|
Rate (2) |
|
Balance |
|
Interest |
|
Rate (2) |
|
Balance |
|
Interest |
|
Rate (2) |
|
| INTEREST-EARNING
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans and leases (1) |
$ |
26,597,242 |
|
|
$ |
303,803 |
|
|
4.58 |
|
% |
$ |
25,515,988 |
|
|
$ |
291,569 |
|
|
4.62 |
|
% |
$ |
24,205,363 |
|
|
$ |
261,703 |
|
|
4.34 |
|
% |
| Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U. S. Treasury |
1,150,001 |
|
|
6,770 |
|
|
2.36 |
|
|
1,208,231 |
|
|
6,496 |
|
|
2.18 |
|
|
1,532,868 |
|
|
7,139 |
|
|
1.87 |
|
|
|
Government agency |
383,700 |
|
|
3,034 |
|
|
3.16 |
|
|
286,514 |
|
|
2,309 |
|
|
3.22 |
|
|
84,640 |
|
|
468 |
|
|
2.21 |
|
|
|
Mortgage-backed securities |
4,979,160 |
|
|
28,130 |
|
|
2.26 |
|
|
5,051,416 |
|
|
28,834 |
|
|
2.28 |
|
|
5,270,891 |
|
|
28,184 |
|
|
2.14 |
|
|
|
Corporate bonds |
147,669 |
|
|
1,931 |
|
|
5.23 |
|
|
145,127 |
|
|
1,937 |
|
|
5.34 |
|
|
94,401 |
|
|
1,298 |
|
|
5.50 |
|
|
|
State, county and municipal |
334 |
|
|
1 |
|
|
1.81 |
|
|
— |
|
|
— |
|
|
— |
|
|
764 |
|
|
8 |
|
|
4.07 |
|
|
|
Other investments |
142,706 |
|
|
625 |
|
|
1.76 |
|
|
99,383 |
|
|
282 |
|
|
1.15 |
|
|
107,878 |
|
|
267 |
|
|
0.99 |
|
|
| Total investment
securities |
6,803,570 |
|
|
40,491 |
|
|
2.38 |
|
|
6,790,671 |
|
|
39,858 |
|
|
2.35 |
|
|
7,091,442 |
|
|
37,364 |
|
|
2.11 |
|
|
| Overnight investments |
1,274,030 |
|
|
7,280 |
|
|
2.29 |
|
|
1,125,503 |
|
|
6,397 |
|
|
2.31 |
|
|
1,373,005 |
|
|
5,612 |
|
|
1.64 |
|
|
| Total interest-earning
assets |
$ |
34,674,842 |
|
|
$ |
351,574 |
|
|
4.06 |
|
% |
$ |
33,432,162 |
|
|
$ |
337,824 |
|
|
4.09 |
|
% |
$ |
32,669,810 |
|
|
$ |
304,679 |
|
|
3.75 |
|
% |
| INTEREST-BEARING
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing
deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Checking with interest |
$ |
5,366,731 |
|
|
$ |
445 |
|
|
0.03 |
|
% |
$ |
5,237,019 |
|
|
$ |
345 |
|
|
0.03 |
|
% |
$ |
5,228,803 |
|
|
$ |
314 |
|
|
0.02 |
|
% |
|
Savings |
2,658,974 |
|
|
527 |
|
|
0.08 |
|
|
2,523,543 |
|
|
206 |
|
|
0.03 |
|
|
2,468,677 |
|
|
194 |
|
|
0.03 |
|
|
|
Money market accounts |
8,031,608 |
|
|
6,624 |
|
|
0.33 |
|
|
8,168,712 |
|
|
5,172 |
|
|
0.26 |
|
|
7,989,268 |
|
|
2,125 |
|
|
0.11 |
|
|
|
Time deposits |
3,371,402 |
|
|
11,561 |
|
|
1.38 |
|
|
2,843,773 |
|
|
7,203 |
|
|
1.03 |
|
|
2,401,434 |
|
|
1,888 |
|
|
0.32 |
|
|
| Total interest-bearing
deposits |
19,428,715 |
|
|
19,157 |
|
|
0.40 |
|
|
18,773,047 |
|
|
12,926 |
|
|
0.28 |
|
|
18,088,182 |
|
|
4,521 |
|
|
0.10 |
|
|
| Securities sold under customer
repurchase agreements |
556,374 |
|
|
515 |
|
|
0.37 |
|
|
538,162 |
|
|
459 |
|
|
0.35 |
|
|
516,999 |
|
|
373 |
|
|
0.29 |
|
|
| Other short-term
borrowings |
40,513 |
|
|
278 |
|
|
2.72 |
|
|
— |
|
|
— |
|
|
— |
|
|
46,614 |
|
|
448 |
|
|
3.82 |
|
|
| Long-term borrowings |
371,843 |
|
|
3,423 |
|
|
3.64 |
|
|
344,225 |
|
|
3,067 |
|
|
3.56 |
|
|
233,373 |
|
|
2,316 |
|
|
3.96 |
|
|
| Total interest-bearing
liabilities |
$ |
20,397,445 |
|
|
$ |
23,373 |
|
|
0.46 |
|
|
$ |
19,655,434 |
|
|
$ |
16,452 |
|
|
0.34 |
|
|
$ |
18,885,168 |
|
|
$ |
7,658 |
|
|
0.16 |
|
|
| Interest rate spread |
|
|
|
|
3.60 |
|
% |
|
|
|
|
3.75 |
|
% |
|
|
|
|
3.59 |
|
% |
| Net interest income and net
yield on interest-earning assets |
|
|
$ |
328,201 |
|
|
3.79 |
|
% |
|
|
$ |
321,372 |
|
|
3.89 |
|
% |
|
|
$ |
297,021 |
|
|
3.64 |
|
% |
(1) Loans and leases include PCI and non-PCI
loans, nonaccrual loans and loans held for sale.
(2) Yields related to loans, leases and
securities exempt from both federal and state income taxes, federal
income taxes only, or state income taxes only are stated on a
taxable-equivalent basis assuming statutory federal income tax
rates of 21.0%, as well as state income tax rates of 3.4% for all
periods presented. The taxable-equivalent adjustment was $853, $900
and $802 for the three months ended June 30, 2019,
March 31, 2019 and June 30, 2018, respectively.
|
Contact: |
Barbara Thompson |
|
|
First Citizens BancShares |
|
|
919.716.2716 |
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