RALEIGH, N.C., April 28, 2022 (GLOBE NEWSWIRE) -- First Citizens BancShares, Inc. (“BancShares”) (Nasdaq: FCNCA) reported earnings for the first quarter ended March 31, 2022.
Chairman and CEO, Frank B. Holding, Jr. on first quarter results, “We are pleased to announce solid first quarter results. We continue to remain focused on ensuring a timely and successful integration with CIT Group Inc. (“CIT”) and made good progress during the quarter. We benefited from another quarter of deposit and loan growth. Net interest income grew and net interest margin expanded compared to the linked quarter, overcoming a reduction in SBA-PPP loans.
“We were additionally pleased with the positive momentum in our card, merchant, wealth and rail lines of business. Expenses were well controlled during the quarter, and we’re committed to achieving our target cost savings from the CIT merger. Credit quality remained strong and net charge-offs remained low. We closed the quarter with strong capital and liquidity levels and believe our current levels support resuming share repurchases in the second half of this year.”
MERGER WITH CIT GROUP, INC.
As previously disclosed, BancShares closed its merger with CIT on January 3, 2022. Total assets acquired were $53.8 billion, which consisted of approximately $32.8 billion of loans, $7.8 billion of operating lease equipment and $6.6 billion of investment securities. Deposits acquired were $39.4 billion. The transaction also included approximately 80 bank branches, about 60 of which were in Southern California and the remaining primarily in the Southwest, Midwest and Southeast. BancShares additionally recorded a preliminary gain on acquisition of $431 million in the first quarter of 2022, representing the excess of the net assets acquired over the purchase price.
| FIRST QUARTER HIGHLIGHTS | |
| Merger with CIT Group Inc. | BancShares completed its previously announced merger with CIT in the first quarter, creating immediate accretion to tangible book value per share of over 40%. The ongoing financial benefits from the combination are already being realized, and BancShares remains confident in its ability to execute on its previously communicated $250 million in total cost savings by the end of 2023. The merger with CIT resulted in a preliminary gain of $431 million which partially offset the $387 million expense (net of $126 million in tax) to establish the initial allowance for credit losses (“ACL”) on non-purchase credit deteriorated (“non-PCD”) loans and establish the reserve for off balance sheet credit exposures, as well as the $102 million merger-related expenses (net of $33 million in tax) primarily for severance and retention payments, auditing and consulting fees. |
| Net income to common shareholders | Net income to common shareholders was $264 million or $16.70 per common share for the first quarter of 2022, compared to $142 million or $14.53 per common share for the same quarter in 2021. Results for the first quarter of 2022 were impacted materially by the CIT merger given the magnitude of the acquired balance sheet, the impacts of purchase accounting and the increases in net income from CIT’s operations. First quarter results included a net $181 million in pre-tax notable items. Excluding notable items, adjusted first quarter net income available to common shareholders was $299 million or $18.95 per share. |
| Return on average assets and equity | Return on average assets for the first quarter of 2022 was 1.00%, down from 1.16% for the comparable quarter in 2021. When adjusted for notable items, return on average assets totaled 1.12% for the first quarter of 2022, compared to 1.07% for the comparable quarter in 2021. Return on average equity for the first quarter of 2022 was 11.18%, down from 14.70% for the comparable quarter in 2021. When adjusted for notable items, return on average equity totaled 12.67% for the first quarter of 2022, compared to 13.51% for the same quarter in 2021. |
| Net interest income and net interest margin | Net interest income was $649 million for the first quarter of 2022. The net interest margin (“NIM”) was 2.73% for the first quarter of 2022, down 6 basis points from 2.79% for the comparable quarter in 2021 and up 16 basis points from 2.57% in the fourth quarter of 2021. Net interest margin benefited from growth in average loans and investments, as well as the redemption of approximately $3 billion in legacy CIT debt which occurred in late February. |
| Allowance for credit losses and credit quality | The ACL was $848 million or 1.29% of total loans at March 31, 2022, compared to $178 million or 0.55% of total loans at December 31, 2021. With the acquisition of CIT, BancShares established an ACL related to the CIT loan portfolio of $738 which was $26 million over CIT’s ACL at December 31, 2021. The improvement of certain macroeconomic factors supporting the ACL estimate process during the quarter resulted in a release of $68 million. Credit quality remains strong and net charge-offs remain at historical lows. The net charge-off ratio was 0.09% for the first quarter of 2022 and nonaccrual loans to total loans was 0.82%. |
| Balance sheet growth | Total loans were $65.5 billion, an increase of $33.2 billion since December 31, 2021. Excluding the fair value of loans acquired from CIT and a decline from SBA-PPP loans, total loans grew $455 million or 2.8% on an annualized basis. Total deposits grew to $91.6 billion, an increase of $40.2 billion since December 31, 2021. Excluding net deposits acquired from CIT, deposits increased $833 million or by 3.7% on an annualized basis. |
| Capital | BancShares remained well-capitalized with a total risk-based capital ratio of 14.46%, a Tier 1 risk-based capital ratio of 12.39%, a Common Equity Tier 1 ratio of 11.34% and a Tier 1 leverage ratio of 9.43%. |
NET INTEREST INCOME AND NET INTEREST MARGIN (NIM)
Net interest income was $649 million for the first quarter of 2022, an increase of $310 million compared to the first quarter of 2021 and $292 million compared to the linked quarter. The increases in both periods were primarily due to impacts from the merger with CIT.
Interest income on loans was $621 million, and the portfolio yield was 3.88%. This compares to $323 million or 3.92% for the first quarter of 2021 and $328 million or 3.97% in the linked quarter. Interest income on investment securities totaled $83 million and the portfolio yield was 1.77%. This compares to $31 million or 1.27% for the first quarter of 2021 and $40 million or 1.39% in the linked quarter.
Interest expense for the first quarter of 2022 was $61 million, an increase of $45 million compared to the first quarter of 2021 and $46 million compared to the linked quarter. The rate paid on interest bearing deposits was 0.24% compared to 0.14% in the prior year period and 0.11% in the linked quarter. The rate paid on borrowings was 1.95% compared to 2.12% in both prior periods.
NIM was 2.73% for the first quarter of 2022, down 6 basis points from 2.79% for the comparable quarter in 2021 and up 16 basis points from 2.57% in the fourth quarter of 2021. Net interest margin benefited from a better macroeconomic rate environment, growth in average loans and investments, and the redemption of approximately $3 billion in legacy CIT debt, which occurred in late February.
NONINTEREST INCOME
Noninterest income was $850 million for the first quarter of 2022, compared to $137 million for the same period in 2021, an increase of $713 million driven primarily from the acquisition of CIT. The current period included a preliminary gain on acquisition of $431 million, which has been identified as notable. The CIT acquisition additionally contributed $208 million in gross rental income on operating leases, $27 million in factoring commissions, $23 million in fee income and other revenue, and $6 million in gain on the sale of leasing equipment. Lines of business such as wealth, card, and merchant services were positive for the quarter while mortgage income declined with the rising interest rates and decline in volumes.
NONINTEREST EXPENSE
Noninterest expense was $810 million for the first quarter of 2022, compared to $296 million for the same period in 2021, an increase of $514 million driven primarily from the acquisition of CIT. During the quarter, we recorded $135 million in merger-related expenses, which have been identified as notable. Salaries and benefits were $352 million, an increase primarily related to the CIT merger. Depreciation and maintenance on operating leases were $81 million and $43 million, respectively. Occupancy expense, net and equipment expense were up $19 million and $22 million respectively, related to the merger with CIT. A benefit of $27 million was recognized with the termination of legacy retiree benefit plans.
INCOME TAXES
Income tax for the quarter was a benefit of $46 million compared to a provision expense of $44 million for the first quarter of 2021, representing effective tax rates of (20.4%) and 23.6% for the respective periods. The first quarter of 2022 included a non-taxable bargain purchase gain of $431 million and other discrete items.
LOANS AND DEPOSITS
At March 31, 2022, loans totaled $65.5 billion, an increase of $33.2 billion since December 31, 2021. Loans and leases acquired from the CIT merger totaled $32.8 billion, which are net of initial purchase accounting marks. Excluding total net loans acquired from CIT and a decline of $299 million in SBA-PPP loans, total loans grew $455 million or 2.8% on an annualized basis.
At March 31, 2022, deposits totaled $91.6 billion, an increase of $40.2 billion since December 31, 2021. Deposits acquired from the CIT merger totaled $39.4 billion, net of initial purchase accounting marks. Excluding net deposits acquired from CIT, deposits increased $833 million or by 3.7% on an annualized basis.
CREDIT QUALITY
Total nonaccrual loans were $538 million or 0.82% of total loans at March 31, 2022, compared to $121 million or 0.37% of total loans at December 31, 2021. The increase in total nonaccrual loans was primarily the result of the CIT merger.
ALLOWANCE FOR CREDIT LOSSES (ACL) AND PROVISION FOR CREDIT LOSSES
The ACL was $848 million or 1.29% of total loans at March 31, 2022, compared to $178 million or 0.55% of total loans at December 31, 2021. The increase in the ACL as compared to December 31, 2021, was primarily driven by the loans added in the CIT Merger. Note that no ACL was carried over from CIT; therefore, the quarter included an ACL build for the loans added. We recorded an estimated reserve for purchase credit deteriorated (“PCD”) loans of $284 million and an estimated reserve for non-PCD loans of $454 million.
Provision expense totaled $464 million for the quarter compared to a net benefit of $11 million in the first quarter of 2021. While net charge-offs were up compared to the prior year quarter, the 9 bps on an annualized basis remains below historical averages. Excluding the day 2 provision for non-PCD loans and the reserve for unfunded commitments of $513 million, we reported a net provision benefit of $49 million due to a net $68 million reserve release as we continue to see improvement in certain macroeconomic factors, specifically real estate values that positively impact the ACL estimate. Additionally, we saw improvement in the specific reserves on certain large, impaired loans which also contributed to the release.
EARNINGS CALL DETAILS
BancShares will host a conference call to discuss the company's financial results on Thursday, April 28, 2022, at 9 a.m. Eastern time.
To access this call, dial:
Domestic: 833-654-8257
International: 602-585-9869
Conference ID: 7780142
The first quarter 2022 earnings presentation and this news release are available on the company’s website at www.firstcitizens.com/investor-relations.
After the conference call, you may access a replay of the call through May 13, 2022, by dialing 855-859-2056 (domestic) or 404-537-3406 (international) with conference ID 7780142.
ABOUT FIRST CITIZENS BANCSHARES
First Citizens BancShares, Inc. is the financial holding company for First Citizens Bank. In January 2022, First Citizens BancShares and CIT Group Inc. merged, creating one of the top 20 U.S. financial institutions, with approximately $110 billion in assets.
First Citizens Bank helps personal, business, commercial and wealth clients build financial strength that lasts. As the largest family-controlled bank in the United States, First Citizens is continuing a unique legacy of strength, stability and long-term thinking that has spanned generations. Its commercial banking segment brings a wide array of best-in-class lending, leasing and banking services to middle-market companies and small businesses from coast to coast. Founded in 1898 and headquartered in Raleigh, N.C., First Citizens also operates a nationwide direct bank and a network of more than 600 branches in 22 states, many in high-growth markets. Visit firstcitizens.com. First Citizens Bank. Forever First®.
FORWARD-LOOKING STATEMENTS
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and future performance of BancShares. Words such as “anticipates,” “believes,” “estimates,” “expects,” “predicts,” “forecasts,” “intends,” “plans,” “projects,” “targets,” “designed,” “could,” “may,” “should,” “will,” “potential,” “continue” or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on BancShares’ current expectations and assumptions regarding BancShares’ business, the economy, and other future conditions.
Because forward-looking statements relate to future results and occurrences, they are subject to inherent risks, uncertainties, changes in circumstances and other risk factors that are difficult to predict. Many possible events or factors could affect BancShares’ future financial results and performance and could cause the actual results, performance or achievements of BancShares to differ materially from any anticipated results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, general competitive, economic, political, geopolitical events (including the military conflict between Russia and Ukraine) and market conditions, the impacts of the global COVID-19 pandemic on BancShares’ business and customers, the financial success or changing conditions or strategies of BancShares’ customers or vendors, fluctuations in interest rates, actions of government regulators, the availability of capital and personnel, and the failure to realize the anticipated benefits of BancShares’ previous acquisition transaction(s), including the recently completed transaction with CIT, which acquisition risks include (1) disruption from the transaction, or recently completed mergers, with customer, supplier or employee relationships, (2) the possibility that the amount of the costs, fees, expenses and charges related to the transaction may be greater than anticipated, including as a result of unexpected or unknown factors, events or liabilities, (3) reputational risk and the reaction of the parties’ customers to the transaction, (4) the risk that the cost savings and any revenue synergies from the transaction may not be realized or take longer than anticipated to be realized, and (5) difficulties experienced in the integration of the businesses. In addition, statements in this presentation related to future plans involving possible commencement of a share repurchase program remain subject to board and relevant regulatory approvals.
Except to the extent required by applicable laws or regulations, BancShares disclaims any obligation to update forward-looking statements or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Additional factors which could affect the forward-looking statements can be found in BancShares’ Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and its other filings with the Securities and Exchange Commission (the “SEC”).
NON-GAAP MEASURES
Certain measures in this presentation are "Non-GAAP,” meaning they are not presented in accordance with generally accepted accounting principles in the U.S. and also are not codified in U.S. banking regulations currently applicable to BancShares. BancShares believes that Non-GAAP financial measures, when reviewed in conjunction with GAAP financial information, can provide transparency about or an alternative means of assessing its operating results and financial position to its investors, analysts and management. The Non-GAAP measures are reconciled to the most comparable GAAP measure in the following financial highlights.
| Contact: | Barbara Thompson | Deanna Hart |
| Corporate Communications | Investor Relations | |
| 919-716-2716 | 919-716-2137 |
Note: References to “Adjusted” results exclude notable items and are Non-GAAP Financial Measures.
| First Citizens BancShares, Inc. | ||||||||
| Performance Summary Table | ||||||||
| (dollars in millions, except per share data) | ||||||||
| Key Performance & Metrics | 1Q22 | 4Q21 | 1Q21 | |||||
| Per Common Share Data | ||||||||
| Average diluted shares oustanding (in thousands) | $ | 15,779 | 9,816 | 9,816 | ||||
| Net income available to common stockholders 1 | 16.70 | 12.09 | 14.53 | |||||
| Net income available to common stockholders 1 - Adjusted | 18.95 | 12.82 | 13.36 | |||||
| Book value per common share | 605.48 | 447.95 | 405.59 | |||||
| Tangible book value per common share (TBV) | 574.09 | 410.74 | 367.07 | |||||
| Key Performance Metrics | ||||||||
| Return on average assets (ROA) | 1.00 | % | 0.84 | % | 1.16 | % | ||
| Return on average assets (ROA) - adjusted | 1.12 | % | 0.89 | % | 1.07 | % | ||
| Return on average common equity (ROE) | 11.18 | % | 10.96 | % | 14.70 | % | ||
| Return on average common equity (ROE) - adjusted | 12.67 | % | 11.63 | % | 13.51 | % | ||
| Return on average tangible common equity (ROTCE) | 11.83 | % | 12.00 | % | 16.28 | % | ||
| Return on average tangible common equity (ROTCE) - adjusted | 13.41 | % | 12.72 | % | 14.96 | % | ||
| Efficiency ratio | 61.57 | % | 66.31 | % | 63.35 | % | ||
| Net interest margin (NIM) | 2.73 | % | 2.57 | % | 2.79 | % | ||
| Select Balance Sheet Items | ||||||||
| Total investments | 19,469 | 13,110 | 10,222 | |||||
| Total loans and leases | 65,524 | 32,372 | 33,181 | |||||
| Total operating lease equipment (net) | 7,972 | - | - | |||||
| Total deposits | 91,597 | 51,406 | 47,331 | |||||
| Total borrowings | 3,292 | 1,794 | 1,911 | |||||
| Loan to deposit ratio | 71.54 | % | 62.97 | % | 70.10 | % | ||
| Noninterest-bearing deposits to total deposits | 28.27 | % | 41.64 | % | 43.34 | % | ||
| Capital Ratios 2 | ||||||||
| Total risk-based capital ratio | 14.46 | % | 14.35 | % | 14.14 | % | ||
| Tier 1 risk-based capital ratio | 12.39 | % | 12.47 | % | 12.02 | % | ||
| Common equity Tier 1 ratio | 11.34 | % | 11.50 | % | 11.00 | % | ||
| Tier 1 leverage capital ratio | 9.43 | % | 7.59 | % | 7.84 | % | ||
| Asset Quality | ||||||||
| Ratio of nonaccrual loans to total loans | 0.82 | % | 0.37 | % | 0.59 | % | ||
| Allowance for credit losses to loans ratio | 1.29 | % | 0.55 | % | 0.63 | % | ||
| Net charge off ratio | 0.09 | % | -0.01 | % | 0.03 | % | ||
| 1 Per diluted common shares, when applicable. | ||||||||
| 2 Capital ratios for the current quarter are preliminary pending completion of quarterly regulatory filings. | ||||||||
| First Citizens BancShares, Inc. | ||||||||
| Income Statement - Consolidated | ||||||||
| (dollars in millions, except shares and per share data) | ||||||||
| Income Statement - Consolidated | 1Q22 | 4Q21 | 1Q21 | |||||
| Interest income | ||||||||
| Interest and fees on loans & leases | $ | 621 | 328 | 323 | ||||
| Interest on investment securities | 83 | 40 | 31 | |||||
| Other interest and dividends | 6 | 4 | 1 | |||||
| Total interest income | 710 | 372 | 355 | |||||
| Interest expense | ||||||||
| Deposits | 39 | 8 | 8 | |||||
| Borrowings | 22 | 7 | 8 | |||||
| Total interest expense | 61 | 15 | 16 | |||||
| Net interest income | 649 | 357 | 339 | |||||
| Provision (benefit) for credit losses | 464 | (5 | ) | (11 | ) | |||
| Net interest income after provision for credit losses | 185 | 362 | 350 | |||||
| Noninterest income | ||||||||
| Rental income on operating leases | 208 | - | - | |||||
| Other noninterest income | ||||||||
| Fee income and other revenue | 33 | 9 | 8 | |||||
| Wealth management services | 35 | 33 | 32 | |||||
| Gains on leasing equipment, net | 6 | - | - | |||||
| Service charges on deposit accounts | 28 | 27 | 22 | |||||
| Factoring commissions | 27 | - | - | |||||
| Cardholder services, net | 25 | 21 | 20 | |||||
| Merchant services, net | 10 | 7 | 9 | |||||
| Realized gains on investment securities available for sale, net | - | - | 9 | |||||
| Marketable equity securities gains (losses), net | 3 | 3 | 16 | |||||
| Gain on acquisition | 431 | - | - | |||||
| Gain (loss) on extinguishment of debt | 6 | - | - | |||||
| Other noninterest income | 38 | 14 | 21 | |||||
| Total other noninterest income | 642 | 114 | 137 | |||||
| Total noninterest income | 850 | 114 | 137 | |||||
| Noninterest expense | ||||||||
| Depreciation on operating lease equipment | 81 | - | - | |||||
| Maintenance and other operating lease expenses | 43 | - | - | |||||
| Operating expenses | ||||||||
| Salaries and benefits | 352 | 193 | 184 | |||||
| Net occupancy expense | 49 | 30 | 30 | |||||
| Equipment expense | 52 | 30 | 30 | |||||
| Third-party processing expense | 24 | 16 | 14 | |||||
| FDIC insurance expense | 12 | 4 | 3 | |||||
| Merger-related expenses | 135 | 10 | 7 | |||||
| Intangible asset amortization | 6 | 2 | 3 | |||||
| Other noninterest expense | 56 | 38 | 25 | |||||
| Total operating expenses | 686 | 323 | 296 | |||||
| Total noninterest expense | 810 | 323 | 296 | |||||
| Income before income taxes | 225 | 153 | 191 | |||||
| Income taxes | (46 | ) | 30 | 44 | ||||
| Net income | 271 | 123 | 147 | |||||
| Preferred stock dividends | 7 | 5 | 5 | |||||
| Net income available to common stockholders | $ | 264 | 118 | 142 | ||||
| Earnings per common share | ||||||||
| Basic | $ | 16.70 | 12.09 | 14.53 | ||||
| Diluted | 16.70 | N/A | N/A | |||||
| Weighted average number of common shares | ||||||||
| Basic | 15,779,153 | 9,816,405 | 9,816,405 | |||||
| Diluted | 15,779,153 | 9,816,405 | 9,816,405 | |||||
| First Citizens BancShares, Inc. | ||||||||
| Income Statement - Adjusted for Notable Items - Consolidated | ||||||||
| (dollars in millions, except shares and per share data ) | ||||||||
| Income Statement - Adjusted for Notable Items - Consolidated | 1Q22 | 4Q21 | 1Q21 | |||||
| Interest income | ||||||||
| Interest and fees on loans & leases | $ | 621 | 328 | 323 | ||||
| Interest on investment securities | 83 | 40 | 31 | |||||
| Other interest and dividends | 6 | 4 | 1 | |||||
| Total interest income | 710 | 372 | 355 | |||||
| Interest expense | ||||||||
| Deposits | 39 | 8 | 8 | |||||
| Borrowings | 22 | 7 | 8 | |||||
| Total interest expense | 61 | 15 | 16 | |||||
| Net interest income | 649 | 357 | 339 | |||||
| Provision (benefit) for credit losses | (49 | ) | (5 | ) | (11 | ) | ||
| Net interest income after provision for credit losses | 698 | 362 | 350 | |||||
| Noninterest income | ||||||||
| Rental income on operating leases, net | 84 | - | - | |||||
| Other noninterest income | - | - | - | |||||
| Fee income and other revenue | 33 | 9 | 8 | |||||
| Wealth management services | 35 | 33 | 32 | |||||
| Gains on leasing equipment, net | - | - | - | |||||
| Service charges on deposit accounts | 28 | 27 | 22 | |||||
| Factoring commissions | 27 | - | - | |||||
| Cardholder services, net | 25 | 21 | 20 | |||||
| Merchant services, net | 10 | 7 | 9 | |||||
| Realized gains on investment securities available for sale, net | - | - | (0 | ) | ||||
| Marketable equity securities gains (losses), net | - | (0 | ) | (0 | ) | |||
| Gain on acquisition | - | - | - | |||||
| Gain (loss) on extinguishment of debt | - | - | - | |||||
| Other noninterest income | 38 | 14 | 21 | |||||
| Total other noninterest income | 196 | 111 | 112 | |||||
| Total noninterest income | 280 | 111 | 112 | |||||
| Noninterest expense | ||||||||
| Depreciation on operating lease equipment | - | - | - | |||||
| Maintenance and other operating lease expenses | - | - | - | |||||
| Operating expenses | - | - | - | |||||
| Salaries and benefits | 379 | 193 | 184 | |||||
| Net occupancy expense | 49 | 30 | 30 | |||||
| Equipment expense | 52 | 30 | 30 | |||||
| Third-party processing expense | 24 | 16 | 14 | |||||
| FDIC insurance expense | 12 | 4 | 3 | |||||
| Merger-related expenses | 0 | 0 | 0 | |||||
| Intangible asset amortization | - | - | (0 | ) | ||||
| Other noninterest expense | 56 | 38 | 25 | |||||
| Total operating expenses | 572 | 311 | 286 | |||||
| Total noninterest expense | 572 | 311 | 286 | |||||
| Income before income taxes | 406 | 162 | 176 | |||||
| Income taxes | 100 | 31 | 40 | |||||
| Net income | 306 | 131 | 136 | |||||
| Preferred stock dividends | 7 | 5 | 5 | |||||
| Net income available to common stockholders | $ | 299 | 126 | 131 | ||||
| Earnings per common share | ||||||||
| Basic | $ | 18.95 | 12.82 | 13.36 | ||||
| Diluted | $ | 18.95 | N/A | N/A | ||||
| Weighted average number of common shares | ||||||||
| Basic | 15,779,153 | 9,816,405 | 9,816,405 | |||||
| Diluted | 15,779,153 | N/A | N/A | |||||
| First Citizens BancShares, Inc. | |||||||||||||||||||||||||||
| Notable Items | |||||||||||||||||||||||||||
| (dollars in millions, except per share data) | |||||||||||||||||||||||||||
| Notable Items | 1Q22 | 4Q21 | 1Q21 | ||||||||||||||||||||||||
| Pre-Tax | After-Tax | EPS Impact | Pre-Tax | After-Tax | EPS Impact | Pre-Tax | After-Tax | EPS Impact | |||||||||||||||||||
| Depreciation on operating lease equipment | $ | (81 | ) | (61 | ) | (3.87 | ) | - | - | - | - | - | - | ||||||||||||||
| Maintenance and other operating lease expenses | (43 | ) | (32 | ) | (2.05 | ) | - | - | - | - | - | - | |||||||||||||||
| Gains on leasing equipment, net of impairments | (6 | ) | (5 | ) | (0.31 | ) | - | - | - | - | - | - | |||||||||||||||
| Realized gains on investment securities available for sale, net | - | - | - | - | - | - | (9 | ) | (7 | ) | (0.73 | ) | |||||||||||||||
| Marketable equity securities gains, net | (3 | ) | (2 | ) | (0.12 | ) | (3 | ) | (2 | ) | (0.24 | ) | (16 | ) | (12 | ) | (1.27 | ) | |||||||||
| Gain on acquisitions | (431 | ) | (431 | ) | (27.34 | ) | - | - | - | - | - | - | |||||||||||||||
| Gain on extinguishment of debt | (6 | ) | (5 | ) | (0.29 | ) | - | - | - | - | - | - | |||||||||||||||
| CTA release | - | - | - | - | - | - | - | - | |||||||||||||||||||
| Legacy consumer mortgage loan sales | - | - | - | - | - | - | - | - | - | ||||||||||||||||||
| Noninterest income - total adjustments | $ | (570 | ) | (536 | ) | (33.98 | ) | (3 | ) | (2 | ) | (0.24 | ) | (25 | ) | (20 | ) | (2.00 | ) | ||||||||
| Depreciation on operating lease equipment | (81 | ) | (61 | ) | 3.87 | - | - | - | - | - | - | ||||||||||||||||
| Maintenance and other operating lease expenses | (43 | ) | (32 | ) | 2.05 | - | - | - | - | - | - | ||||||||||||||||
| Restructuring costs | - | - | - | - | - | - | - | - | - | ||||||||||||||||||
| Merger-related expenses | (135 | ) | (102 | ) | 6.45 | (10 | ) | (8 | ) | 0.78 | (7 | ) | (5 | ) | 0.54 | ||||||||||||
| Intangible asset amortization | (6 | ) | (5 | ) | 0.29 | (2 | ) | (2 | ) | 0.16 | (3 | ) | (3 | ) | 0.26 | ||||||||||||
| Termination of US Medical Plan and US Life Insurance | 27 | 20 | (1.28 | ) | - | - | - | 0 | - | - | - | ||||||||||||||||
| Noninterest expense - total adjustments | $ | (238 | ) | (180 | ) | 11.38 | (12 | ) | (9 | ) | 0.94 | (10 | ) | (8 | ) | 0.81 | |||||||||||
| CECL Day 2 provision and reserve for unfunded commitments | (513 | ) | (387 | ) | 24.50 | - | - | - | - | - | - | ||||||||||||||||
| Provision for credit losses - total adjustments | $ | (513 | ) | (387 | ) | 24.50 | - | - | - | - | - | - | |||||||||||||||
| Total impact of notable items | $ | $ | 181 | $ | 31 | $ | 1.90 | 9 | 7 | $ | 0.70 | (15 | ) | (12 | ) | $ | (1.20 | ) | |||||||||
| First Citizens BancShares, Inc. | ||||||||
| Balance Sheet | ||||||||
| (dollars in millions) | ||||||||
| Balance Sheet | 1Q22 | 4Q21 | 1Q21 | |||||
| Assets | ||||||||
| Cash and due from banks | $ | 523 | 338 | 410 | ||||
| Interest-earning deposits at banks | 9,285 | 9,115 | 7,589 | |||||
| Securities purchased under agreement to resell | ||||||||
| Investment in marketable equity securities | 100 | 98 | 107 | |||||
| Investment in securities available for sale | 9,295 | 9,203 | 7,307 | |||||
| Investment securities held to maturity | 10,074 | 3,809 | 2,808 | |||||
| Assets held for sale | 83 | 98 | 130 | |||||
| Loans and leases | 65,524 | 32,372 | 33,181 | |||||
| Allowance for credit losses | (848 | ) | (178 | ) | (211 | ) | ||
| Loans and leases, net of allowance for credit losses | 64,676 | 32,194 | 32,970 | |||||
| Operating lease equipment, net | 7,972 | - | ||||||
| Premises and equipment | 1,431 | 1,233 | 1,239 | |||||
| Bank owned life insurance | 1,326 | 116 | 115 | |||||
| Goodwill | 346 | 346 | 350 | |||||
| Other intangible assets | 156 | 19 | 28 | |||||
| Other assets | 3,330 | 1,739 | 856 | |||||
| Total assets | $ | 108,597 | 58,308 | 53,909 | ||||
| Liabilities | ||||||||
| Deposits | ||||||||
| Noninterest-bearing | $ | 25,898 | 21,405 | 20,515 | ||||
| Interest-bearing | 65,699 | 30,001 | 26,816 | |||||
| Total deposits | 91,597 | 51,406 | 47,331 | |||||
| Credit balances of factoring clients | 1,150 | |||||||
| Securities sold under customer repurchase agreements | 616 | 589 | 681 | |||||
| Federal Home Loan Bank borrowings | 639 | 645 | 648 | |||||
| Senior unsecured borrowings | 895 | - | - | |||||
| Subordinated debt | 1,058 | 478 | 497 | |||||
| Other borrowings | 84 | 72 | 85 | |||||
| Other liabilities | 1,988 | 381 | 345 | |||||
| Total liabilities | $ | 98,027 | 53,571 | 49,587 | ||||
| Stockholders’ equity | ||||||||
| Preferred stock - $0.01 par value | 881 | 340 | 340 | |||||
| Common Stock: | ||||||||
| Class A - $1 par value | 15 | 9 | 9 | |||||
| Class B - $1 par value | 1 | 1 | 1 | |||||
| Surplus | 5,344 | - | ||||||
| Retained earnings | 4,634 | 4,377 | 4,006 | |||||
| Accumulated other comprehensive (loss) income | (305 | ) | 10 | (34 | ) | |||
| Total stockholders’ equity | 10,570 | 4,737 | 4,322 | |||||
| Total liabilities and stockholders’ equity | $ | 108,597 | 58,308 | 53,909 | ||||
| Common Shares Outstanding | 15,978,414 | 9,816,405 | 9,816,405 | |||||
| Book value per common share | $ | 605.48 | 447.92 | 405.65 | ||||
| Tangible book value per common share | 574.09 | 410.74 | 367.07 | |||||
| Other assets | ||||||||
| Investments in low income housing and other tax credits | $ | 702 | 157 | 162 | ||||
| Right of use assets | 384 | 63 | 65 | |||||
| Pension assets | 296 | 289 | 166 | |||||
| Accrued interest receivable | 247 | 134 | 148 | |||||
| Income taxes receivable | 834 | 799 | 40 | |||||
| Fair value of derivative financial instruments | 110 | - | - | |||||
| Countertparty receivables | 106 | - | - | |||||
| Federal Home Loan Bank stock | 39 | 40 | 41 | |||||
| Other real estate owned | 43 | 39 | 49 | |||||
| Mortgage servicing rights | 29 | 24 | 24 | |||||
| Other | 540 | 194 | 161 | |||||
| Total other assets | $ | 3,330 | 1,739 | 856 | ||||
| Other liabilities | ||||||||
| Accrued expenses and accounts payable | $ | 534 | 5 | 3 | ||||
| Current and deferred taxes | 161 | 34 | - | |||||
| Lease liabilities | 385 | 64 | 66 | |||||
| Commitments to find investments in tax credits | 242 | 43 | 50 | |||||
| Fair value of derivative financial instruments | 204 | - | - | |||||
| Accrued interest payable | 24 | 8 | 5 | |||||
| Reserve for off-balances sheet credit exposure | 75 | 12 | 12 | |||||
| Other | 363 | 215 | 209 | |||||
| Total other liabilities | $ | 1,988 | 381 | 345 | ||||
| First Citizens BancShares, Inc. | ||||||||
| Loans & Deposits | ||||||||
| (dollars in milions) | ||||||||
| Loans & Leases (End of Period) | 1Q22 | 4Q21 | 1Q21 | |||||
| Loans & Leases by Class | ||||||||
| Commercial | ||||||||
| Commercial construction | $ | 2,633 | 1,238 | 1,131 | ||||
| Owner occupied commercial mortgages | 13,553 | 12,099 | 11,480 | |||||
| Non-owner occupied commercial mortgages | 9,293 | 3,041 | 3,094 | |||||
| Commercial and industrial | 22,402 | 5,937 | 7,403 | |||||
| Leases | 2,220 | 271 | 317 | |||||
| Total commercial | $ | 50,101 | 22,586 | 23,425 | ||||
| Consumer | ||||||||
| Residental mortgage | $ | 11,711 | 6,088 | 5,974 | ||||
| Revolving mortgage | 1,840 | 1,818 | 1,971 | |||||
| Consumer auto | 1,320 | 1,332 | 1,272 | |||||
| Consumer other | 552 | 548 | 539 | |||||
| Total consumer | 15,423 | 9,786 | 9,756 | |||||
| Total loans & leases | $ | 65,524 | 32,372 | 33,181 | ||||
| Less allowance for credit losses | (848 | ) | (178 | ) | (211 | ) | ||
| Net loans & leases | $ | 64,676 | 32,194 | 32,970 | ||||
| Deposits (End of Period) | 1Q22 | 4Q21 | 1Q21 | |||||
| Non-interest-bearing demand | $ | 25,898 | 21,405 | 20,515 | ||||
| Checking with interest | 16,702 | 12,694 | 10,820 | |||||
| Money market | 26,249 | 10,590 | 9,590 | |||||
| Savings | 13,506 | 4,236 | 3,676 | |||||
| Time | 9,242 | 2,481 | 2,729 | |||||
| Total deposits | $ | 91,597 | 51,406 | 47,331 | ||||
| First Citizens BancShares, Inc. | ||||||||
| Asset Quality & Allowance for Credit Losses | ||||||||
| (dollars in milions) | ||||||||
| Asset Quality & Allowance | 1Q22 | 4Q21 | 1Q21 | |||||
| Nonaccrual loans | $ | 538 | 121 | 194 | ||||
| Ratio of nonaccrual loans to total loans | 0.82 | % | 0.37 | % | 0.59 | % | ||
| Charge-offs | $ | 33 | 8 | 9 | ||||
| Recoveries | (18 | ) | (9 | ) | (6 | ) | ||
| Net charge-offs | $ | 15 | (1 | ) | 3 | |||
| Net charge-off ratio | 0.09 | % | -0.01 | % | 0.03 | % | ||
| Allowance for credit losses | $ | 848 | 178 | 211 | ||||
| Allowance for credit losses to loans ratio | 1.29 | % | 0.55 | % | 0.63 | % | ||
| Allowance for credit losses - beginning | $ | 178 | 183 | 225 | ||||
| CIT merger - intial PCD allowance | 284 | - | - | |||||
| CIT merger - initial NPCD allowance | 454 | - | - | |||||
| Provision (credit) | (53 | ) | (5 | ) | (11 | ) | ||
| Net charge-offs | (15 | ) | 1 | (3 | ) | |||
| Allowance for credit losses - ending | $ | 848 | 179 | 211 | ||||
| Reserve for off balance sheet credit exposures | $ | 75 | 12 | 12 | ||||
| Total provision expense | $ | 464 | (5 | ) | (11 | ) | ||
| First Citizens BancShares, Inc. | ||||||||||||||||||||||||
| Average Balance Sheet - Yields/Rates | ||||||||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||||||
| Average Balance Sheet | 1Q22 | 4Q21 | 1Q21 | |||||||||||||||||||||
| Average Balance | Income / Expense | Yield / Rate | Average Balance | Income / Expense | Yield / Rate | Average Balance | Income / Expense | Yield / Rate | ||||||||||||||||
| Loans and leases | $ | 64,144 | $ | 621 | 3.88 | % | $ | 32,488 | $ | 328 | 3.97 | % | $ | 33,087 | $ | 323 | 3.92 | % | ||||||
| Total investment securities | 19,492 | 83 | 1.71 | % | 11,424 | 40 | 1.39 | % | 9,758 | 31 | 1.27 | % | ||||||||||||
| Interest-earning deposits at banks | 11,476 | 6 | 0.19 | % | 10,690 | 4 | 0.15 | % | 5,871 | 1 | 0.10 | % | ||||||||||||
| Total interest-earning assets | 95,112 | 710 | 2.99 | % | 54,602 | 372 | 2.68 | % | 48,716 | 355 | 2.92 | % | ||||||||||||
| Operating lease equipment, net (including held for sale) | 7,924 | - | - | |||||||||||||||||||||
| Cash and due from banks | 536 | 337 | 333 | |||||||||||||||||||||
| Allowance for credit losses | (907 | ) | (184 | ) | (224 | ) | ||||||||||||||||||
| All other non-interest bearing assets | 6,569 | 3,361 | 2,585 | |||||||||||||||||||||
| Total Assets | 109,234 | 58,116 | 51,410 | |||||||||||||||||||||
| Interest bearing deposits | ||||||||||||||||||||||||
| Checking with interest | 16,606 | 5 | 0.10 | % | 11,994 | 2 | 0.05 | % | 10,746 | 1 | 0.05 | % | ||||||||||||
| Money market | 26,199 | 15 | 0.24 | % | 10,358 | 2 | 0.09 | % | 9,009 | 3 | 0.11 | % | ||||||||||||
| Savings | 13,659 | 9 | 0.26 | % | 4,140 | - | 0.03 | % | 3,462 | - | 0.04 | % | ||||||||||||
| Time deposits | 9,794 | 10 | 0.43 | % | 2,517 | 4 | 0.62 | % | 2,805 | 5 | 0.66 | % | ||||||||||||
| Total interest bearing deposits | 66,258 | 39 | 0.24 | % | 29,009 | 8 | 0.11 | % | 26,022 | 9 | 0.14 | % | ||||||||||||
| Securities sold under customer repuchase agreements | 600 | - | 0.16 | % | 650 | - | 0.16 | % | 641 | - | 0.21 | % | ||||||||||||
| Borrowings | ||||||||||||||||||||||||
| FHLB borrowings | 641 | 2 | 1.27 | % | 645 | 2 | 1.28 | % | 651 | 2 | 1.28 | % | ||||||||||||
| Senior unsecured borrowings | 2,719 | 12 | 1.71 | % | - | - | 0.00 | % | - | - | 0.00 | % | ||||||||||||
| Subordinated debt | 1,061 | 8 | 2.96 | % | 497 | 4 | 3.34 | % | 497 | 4 | 3.37 | % | ||||||||||||
| Other borrowings | 85 | - | 1.95 | % | 75 | 1 | 1.25 | % | 87 | 1 | 1.22 | % | ||||||||||||
| Total borrowings | 4,506 | 22 | 1.95 | % | 1,217 | 7 | 2.12 | % | 1,235 | 7 | 2.12 | % | ||||||||||||
| Total interest-bearing liabilities | 71,364 | 61 | 0.35 | % | 30,876 | 15 | 0.19 | % | 27,898 | 16 | 0.23 | % | ||||||||||||
| Non-interest bearing deposits | 25,315 | 22,229 | ||||||||||||||||||||||
| Other non-interest bearing liabilities | 2,132 | 378 | 23,512 | |||||||||||||||||||||
| Stockholders' equity | 10,423 | 4,633 | ||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 109,234 | $ | 58,116 | $ | 51,410 | ||||||||||||||||||
| Interest rate spread | 2.64 | % | 2.49 | % | 2.69 | % | ||||||||||||||||||
| Net interest income and net yield on interest-earning assets | $ | 649 | 2.73 | % | $ | 357 | 2.57 | % | $ | 339 | 2.79 | % | ||||||||||||
| First Citizens BancShares, Inc. | |||||||||
| Non-GAAP Reconciliation #1 | |||||||||
| (dollars in millions, except per share data) | |||||||||
| 1Q22 | 4Q21 | 1Q21 | |||||||
| Net income (GAAP measure) | $ | 271 | 123 | 147 | |||||
| Less: Preferred dividends | 7 | 5 | 5 | ||||||
| Net income available to common stockholders (GAAP measure) | a | 264 | 118 | 142 | |||||
| Plus: Total tax-effected notable items | 35 | 8 | (11 | ) | |||||
| Adjusted net income available to common stockholders (non-GAAP measure) | b | $ | 299 | 126 | 131 | ||||
| Weighted average common shares outstanding | c | 15,779,153 | 9,816,405 | 9,816,405 | |||||
| Basic earnings per share (GAAP measure) | a/c | $ | 16.70 | 12.09 | 14.53 | ||||
| Adjusted basic earnings per share (non-GAAP measure) | b/c | 18.95 | 12.82 | 13.36 | |||||
| Total average stockholders' equity (GAAP measure) | $ | 10,423 | 4,633 | 4,275 | |||||
| Less: Preferred stock | 863 | 340 | 340 | ||||||
| Total average common stockholders' equity (GAAP measure) | e | $ | 9,560 | 4,293 | 3,935 | ||||
| Return on equity (GAAP measure) | a/e | 11.18 | % | 10.96 | % | 14.70 | % | ||
| Adjusted return on equity (non-GAAP measure) | b/e | 12.67 | % | 11.63 | % | 13.51 | % | ||
| Total average common stockholders' equity (GAAP measure) | $ | 9,560 | 4,293 | 3,935 | |||||
| Less: Average goodwill | 346 | 350 | 350 | ||||||
| Less: Average intangible assets | 182 | 21 | 30 | ||||||
| Total tangible common stockholders' equity (non-GAAP measure) | f | $ | 9,032 | 3,922 | 3,555 | ||||
| Return on tangible common equity (non-GAAP measure) | a/f | 11.83 | % | 12.00 | % | 16.28 | % | ||
| Adjusted return on tangible common equity (non-GAAP measure) | b/f | 13.43 | % | 12.72 | % | 14.96 | % | ||
| Total average assets (GAAP measure) | g | $ | 110,395 | 58,116 | 51,410 | ||||
| Net income (GAAP measure) | h | $ | 271 | 123 | 147 | ||||
| Plus: Total tax-effected notable items | 35 | 8 | (11 | ) | |||||
| Adjusted net income (non-GAAP measure) | i | $ | 306 | 132 | 137 | ||||
| Return on assets (GAAP measure) | h/g | 1.00 | % | 0.84 | % | 1.16 | % | ||
| Adjusted return on assets (non-GAAP meausre) | h/i | 1.12 | % | 0.89 | % | 1.07 | % | ||
| First Citizens BancShares, Inc. | |||||||||
| Non-GAAP Reconciliation #2 | |||||||||
| (dollars in millions) | |||||||||
| 1Q22 | 4Q21 | 1Q21 | |||||||
| Total noninterest income (GAAP measure) | $ | 850 | 114 | 137 | |||||
| Less: Depreciation and maintenance on operating leases | 124 | - | - | ||||||
| Subtotal | 726 | 114 | 137 | ||||||
| Less: Other notable items | 446 | 3 | 25 | ||||||
| Total core noninterest income (non-GAAP measure) | $ | 280 | 111 | 112 | |||||
| Total noninterest expense (GAAP measure) | $ | 810 | 323 | 296 | |||||
| Less: Depreciation and maintenance on operating leases | 124 | - | - | ||||||
| Subtotal | 686 | 323 | 296 | ||||||
| Less: Other notable items | 114 | 12 | 10 | ||||||
| Total core noninterest expense (non-GAAP measure) | a | $ | 572 | 311 | 286 | ||||
| Net interest income (GAAP measure) | $ | 649 | 357 | 339 | |||||
| Total core noninterest income (non-GAAP measure) | 280 | 111 | 112 | ||||||
| Total efficiency revenue | b | $ | 929 | 468 | 451 | ||||
| Efficiency ratio (non-GAAP measure) | b/a | 61.57 | % | 66.31 | % | 63.35 | % | ||
| First Citizens BancShares, Inc. | ||||||
| Non-GAAP Reconciliation #3 | ||||||
| (dollars in millions, except per share data) | ||||||
| 1Q22 | 4Q21 | 1Q21 | ||||
| Total stockholders' equity (GAAP measure) | a | $ | 11,041 | 4,737 | 4,322 | |
| Less: Preferred stock | 865 | 340 | 340 | |||
| Common stockholders' equity (non-GAAP measure) | b | $ | 10,176 | 4,397 | 3,982 | |
| Common stockholders' equity (non-GAAP measure) | $ | 10,176 | 4,397 | 3,982 | ||
| Less: Goodwill | 346 | 346 | 350 | |||
| Less: Intangible assets | 121 | 19 | 28 | |||
| Tangible common stockholders' equity or tangible capital (non-GAAP measure) | c | $ | 9,708 | 4,032 | 3,604 | |
| Total shares outstanding | d | 16,001,510 | 9,816,405 | 9,816,405 | ||
| Book value per common share (non-GAAP measure) | b/d | $ | 635.92 | 447.95 | 405.59 | |
| Tangible book value per common share (non-GAAP measure) | c/d | 606.72 | 410.74 | 367.07 | ||
