RALEIGH, N.C., Jan. 26, 2022 (GLOBE NEWSWIRE) -- First Citizens BancShares, Inc. ("BancShares") (NASDAQ:FCNCA) reported earnings for the fourth quarter and year ended December 31, 2021. Key results are presented below:

FOURTH QUARTER RESULTS

Q4 2021

Q4 2020

Q4 2021

Q4 2020

Q4 2021

Q4 2020

Q4 2021

Q4 2020

Q4 2021

Q4 2020

Net income (in millions)

Net income per share

Net interest margin

Return on average assets

Return on average equity

$123.3

$138.1

$12.09

$13.59

2.58%

3.02%

0.84%

1.11%

10.96%

14.02%

YEAR-TO-DATE ("YTD") RESULTS

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Net income (in millions)

Net income per share

Net interest margin

Return on average assets

Return on average equity

$547.5

$491.7

$53.88

$47.50

2.66%

3.17%

1.00%

1.07%

12.84%

12.96%

FOURTH QUARTER HIGHLIGHTS

Net income		Net income was $123.3 million for the fourth quarter of 2021, a decrease of $14.8 million or 10.7%, compared to the same quarter in 2020. Net income per common share was $12.09 for the fourth quarter of 2021, compared to $13.59 per share for the same quarter in 2020.

Return on average assets and equity		Return on average assets for the fourth quarter of 2021 was 0.84%, down from 1.11% for the comparable quarter in 2020. Return on average equity for the fourth quarter of 2021 was 10.96%, down from 14.02% for the comparable quarter in 2020.

Net interest income and net interest margin		Net interest income was $357.4 million for the fourth quarter of 2021, a decrease of $1.3 million or 0.4%, compared to the same quarter in 2020 but was up $10.5 million or 3.0% compared to the third quarter of 2021. The taxable-equivalent net interest margin ("NIM") was 2.58% for the fourth quarter of 2021, down 44 basis points from 3.02% for the comparable quarter in 2020 and down 3 basis points from 2.61% in the third quarter of 2021.

Provision for credit losses		The provision for credit losses was a net benefit of $5.1 million during the fourth quarter of 2021, compared to a $5.4 million expense during the same quarter in 2020. The allowance for credit losses ("ACL") was $178.5 million at December 31, 2021, compared to $224.3 million at December 31, 2020, representing 0.55% and 0.68% of loans, respectively.

Operating performance		Noninterest income was $114.3 million for the fourth quarter of 2021, a decrease of $12.5 million or 9.9%, compared to the same quarter in 2020. Noninterest expense was $323.2 million for the fourth quarter of 2021, an increase of $17.8 million or 5.8%, compared to the same quarter in 2020.

Loans and credit quality		Total loans were $32.4 billion, a decrease of $420.5 million or 1.3%, since December 31, 2020. Excluding loans originated under the Small Business Administration Paycheck Protection Program ("SBA-PPP"), total loans increased $1.5 billion, or by 4.9%, since December 31, 2020. Total loans decreased $144.7 million, or by 1.8% on an annualized basis, compared to September 30, 2021. Excluding SBA-PPP loans, total loans increased $448.4 million, or by 5.7% annualized in the fourth quarter of 2021. The net charge-off ratio was -0.01% for the fourth quarter of 2021 compared to 0.06% for the same quarter in 2020.

Deposits		Total deposits grew to $51.4 billion, an increase of $8.0 billion or 18.4%, since December 31, 2020, driven by organic growth. Deposits increased $1.3 billion, or by 10.6% on an annualized basis, compared to September 30, 2021.

Capital		BancShares remained well-capitalized with a total risk-based capital ratio of 14.35%, a Tier 1 risk-based capital ratio of 12.47%, a Common Equity Tier 1 ratio of 11.50% and a Tier 1 leverage ratio of 7.59%.

MERGER WITH CIT GROUP, INC.

On January 3, 2022, BancShares completed its previously announced merger with CIT Group, Inc. ("CIT") creating a top 20 U.S. financial institution (based on assets) and the largest family-controlled bank in the nation.

"The close of the First Citizens and CIT merger marked a transformational milestone in our company's history and the true start of our integration efforts," said Frank B. Holding Jr., First Citizens chairman and chief executive officer. "We're officially one stronger and better team, with complementary strengths positioned to give our customers greater access to a broader range of products and services. We're creating a bank with more ways to fulfill our Forever First promise to customers and prospects — one that helps more people and supports our communities across the nation."

CIT, CIT Bank and OneWest Bank are currently operating as divisions of First Citizens Bank, and these customers are able to continue to bank as they normally do. For now, these customers are being served through their current branches, websites, mobile apps, bankers and advisors. Over the coming months, a series of conversions to First Citizens' systems and operations will take place.

The fourth quarter and full year results included in this earnings release do not include financial results of CIT. Limited financial information on CIT's results for the quarter and year ended December 31, 2021 will be included in our fourth quarter 2021 earnings presentation.

NET INTEREST INCOME & NET INTEREST MARGIN

Net interest income was $357.4 million for the fourth quarter of 2021, a decrease of $1.3 million or 0.4% compared to the same quarter in 2020. This was primarily due to a decline in the yield on loans and a decrease in interest and fee income on SBA-PPP loans, largely offset by organic loan growth, higher investment and overnight balances and yields, as well as lower rates on interest-bearing deposits. SBA-PPP loans contributed $26.5 million in interest and fee income for the fourth quarter of 2021 compared to $42.2 million for the same quarter in 2020. Net interest income increased $10.5 million compared to the linked quarter due primarily to higher SBA-PPP interest and fee income and increased loan (excluding SBA-PPP loans) and investment balances. This increase was partially offset by declines in loan and investment yields. SBA-PPP loans contributed $20.0 million in interest and fee income during the third quarter of 2021.

The taxable-equivalent NIM was 2.58% during the fourth quarter of 2021, a decrease of 44 basis points from 3.02% for the comparable quarter in 2020. The margin decline was primarily due to changes in earning asset mix driven by excess liquidity and higher balances in overnight investments, a decline in the yield on loans and lower income on SBA-PPP loans. These declines were partially offset by lower rates paid on interest-bearing deposits and higher investment yields. The taxable-equivalent NIM declined 3 basis points from 2.61% for the linked quarter primarily due to changes in earning asset mix and lower investment yields, partially offset by an increase in SBA-PPP income.

Net interest income was $1.39 billion for the twelve months ended December 31, 2021, an increase of $2.2 million or 0.2% compared to the same period in 2020. While total net interest income in both periods was materially unchanged, there were components that varied period over period. The items positively impacting net interest income included increased loan, investment and overnight balances, as well as lower deposit rates and an increase in SBA-PPP income. These increases were largely offset by a decline in the yield on interest-earning assets. SBA-PPP loans contributed $104.6 million in interest and fee income for the twelve months ended December 31, 2021, compared to $90.1 million for the same period in 2020.

The taxable-equivalent NIM was 2.66% for the twelve months ended December 31, 2021, a decrease of 51 basis points from 3.17% for the comparable period in 2020. The margin decline was primarily due to changes in earning asset mix and a decline in the yield on interest-earning assets, partially offset by lower rates paid on interest-bearing deposits and increased income from SBA-PPP loans.

PROVISION FOR CREDIT LOSSES

Provision for credit losses was a net benefit of $5.1 million for the fourth quarter of 2021 compared to $5.4 million in expense for the same quarter in 2020. The fourth quarter of 2021 was favorably impacted by a $4.7 million reserve release driven primarily by continued strong credit performance, low net charge-offs and improvement in macroeconomic factors. Total net recoveries for the fourth quarter of 2021 were $0.4 million compared to net charge-offs of $5.0 million for the comparable quarter in 2020. The net charge-off ratio was (0.01%) for the fourth quarter of 2021 compared to 0.06% for the same quarter in 2020.

Provision for credit losses was a benefit of $36.8 million for the twelve months ended December 31, 2021, compared to $58.4 million in expense for the same period in 2020. Provision for credit losses for the twelve months ended December 31, 2021, was favorably impacted by a $45.8 million reserve release driven primarily by improvement in macroeconomic factors, continued strong credit performance and low net charge-offs. The comparable period in 2020 included a $35.9 million reserve build related to uncertainties surrounding COVID-19. Net charge-offs for the twelve months ended December 31, 2021, were $9.0 million, a decrease from $22.4 million for the comparable period in 2020 due to a lower volume of charge-offs and higher recoveries. The net charge-off ratio was 0.03% for the twelve months ended December 31, 2021, compared to 0.07% for the same period in 2020.

NONINTEREST INCOME

Noninterest income was $114.3 million for the fourth quarter of 2021, a decrease of $12.5 million or 9.9%, compared to $126.8 million for the same quarter in 2020. Contributing to the decline was a $15.9 million reduction in fair market value adjustments on marketable equity securities, a $6.0 million decrease in mortgage income due to reductions in gain on sale and production volume driven by higher mortgage rates and increased competition and a $5.3 million decline in realized gains on available for sale securities. These declines were partially offset by a $5.3 million increase in wealth management services due to growth in assets under management resulting in higher advisory and transaction fees, a $3.6 million increase in service charges on deposit accounts, a $2.6 million increase in cardholder services, net, and a $1.2 million increase in both merchant services, net and other service charges and fees. Excluding fair market value adjustments on marketable equity securities and realized gains on available for sale securities, noninterest income was $111.2 million for the fourth quarter of 2021, an increase of $8.6 million or 8.4% compared to $102.6 million for the same quarter in 2020.

Noninterest income was $508.0 million for the twelve months ended December 31, 2021, an increase of $31.3 million or 6.6% compared to $476.8 million for the same period in 2020. The primary drivers of the increase were a $26.0 million increase in wealth management services due to growth in assets under management resulting in higher advisory and transaction fees, a $12.4 million increase in cardholder services, net, a $9.0 million increase in merchant services, net, a $7.1 million increase in service charges on deposit accounts, a $5.0 million increase in other service charges and fees and a $4.7 million favorable change in fair market value adjustments on marketable equity securities. These increases were partially offset by a $27.1 million decrease in realized gains on available for sale securities due to lower sales volume and a $9.1 million decline in mortgage income due to reductions in gain on sale and production volume driven by higher mortgage rates and increased competition. Excluding fair market value adjustments on marketable equity securities and realized gains on available for sale securities, noninterest income was $440.8 million for the twelve months ended December 31, 2021, an increase of $53.7 million or 13.9%, compared to $387.1 million for the same period in 2020.

NONINTEREST EXPENSE

Noninterest expense was $323.2 million for the fourth quarter of 2021, an increase of $17.8 million or 5.8%, compared to the same quarter in 2020. The primary driver of the increase was a $9.9 million increase in salaries and wages driven by annual merit increases, increases in revenue-driven incentives, and an increase in temporary personnel cost. Additionally contributing to the increase was a $4.5 million increase in merger-related expenses related to the merger with CIT and a $3.7 million increase in processing fees paid to third parties driven by our continued investments in digital and technology to support revenue-generating businesses and improve internal processes.

Noninterest expense was $1.2 billion for the twelve months ended December 31, 2021, an increase of $44.8 million or 3.8% compared to the same period in 2020. The most significant driver of the increase was a $33.2 million increase in salaries and wages due primarily to annual merit increases, increases in revenue-driven incentives, and an increase in temporary personnel costs. Also contributing to the higher expense was an $15.0 million increase in processing fees paid to third parties driven by our continued investments in digital and technology to support revenue-generating businesses and improve internal processes, and a $12.0 million increase in merger-related expense associated with the CIT merger. These increases were partially offset by a $15.6 million decrease in other expense due largely attributable to a decline in pension expense and amortization of core deposit intangibles, as well as an $8.2 million decrease in collection and foreclosure-related expenses.

INCOME TAXES

Income tax expense totaled $30.3 million and $36.6 million for the fourth quarter of 2021 and 2020, respectively, representing effective tax rates of 19.7% and 21.0% for the respective periods. Income tax expense totaled $154.2 million and $126.2 million for the year ended 2021 and 2020, respectively, representing effective tax rates of 22.0% and 20.4% for the respective periods.

In 2021 and 2020 BancShares' utilized an allowable alternative for computing its federal income tax liability. The allowable alternative provides BancShares the ability to use the federal income tax rate for certain current year deductible amounts related to prior year FDIC-assisted acquisitions that was applicable when these amounts were originally subjected to tax. Without this alternative, the effective tax rates for 2021 would be materially unchanged and the annual effective tax rate for the fourth quarter and year ended 2020 would have been approximately 23.0% and 22.7% respectively.

LOANS AND DEPOSITS

At December 31, 2021, loans totaled $32.4 billion, a decrease of $420.5 million or 1.3% since December 31, 2020. SBA-PPP loans totaled $493.8 million as of December 31, 2021, compared to $2.4 billion as of December 31, 2020. Excluding SBA-PPP loans, total loans increased $1.5 billion, or by 4.9% since December 31, 2020. Total loans decreased $144.7 million, or by 1.8% on an annualized basis compared to September 30, 2021. Excluding SBA-PPP loans, total loans increased $448.4 million, or by 5.7% on an annualized basis during the fourth quarter of 2021.

At December 31, 2021, deposits totaled $51.4 billion, an increase of $8.0 billion or 18.4%, since December 31, 2020, driven by organic growth. Deposits increased $1.3 billion, or by 10.6% on an annualized basis since September 30, 2021.

ALLOWANCE FOR CREDIT LOSSES (ACL)

The ACL was $178.5 million at December 31, 2021, compared to $224.3 million at December 31, 2020, a decrease of $45.8 million. The ACL as a percentage of total loans and leases was 0.55% at December 31, 2021, compared to 0.68% at December 31, 2020. The reduction was primarily due to a $45.8 million reserve release for the twelve months ended December 31, 2021, driven primarily by continued strong credit performance, low net charge-offs and improvement in macroeconomic factors.

NONPERFORMING ASSETS

Nonperforming assets, including nonaccrual loans and other real estate owned, were $159.6 million or 0.49% of total loans and other real estate owned at December 31, 2021, compared to $242.4 million or 0.74% at December 31, 2020.

CAPITAL TRANSACTIONS

During the fourth quarter of 2021 and in the fourth quarter of 2020, BancShares did not repurchase any shares of Class A common stock. For the twelve months ended December 31, 2021, BancShares did not repurchase any shares of Class A common stock compared to repurchases of 813,090 shares of Class A common stock for $333.8 million at an average cost per share of $410.48 for the comparable period in 2020. All Class A common stock repurchases completed in 2020 were consummated under previously approved authorizations. Following the expiration of our latest share repurchase authorization on July 31, 2020, share repurchase activity was suspended.

EARNINGS CALL DETAILS

BancShares will host a conference call to discuss the company's financial results on Wednesday. January 26, 2022, at 9 a.m. Eastern time.

To access this call, dial:

Domestic: 833-654-8257

International: 602-585-9869

Conference ID: 1049136

The fourth quarter 2021 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 February 10, 2022, by dialing 855-859-2056 (domestic) or 404-537-3406 (international) with conference ID 1049136.

ABOUT FIRST CITIZENS BANCSHARES

BancShares is the financial holding company for First-Citizens Bank & Trust Company ("First Citizens Bank") which 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. 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. Industry specialists bring a depth of expertise that helps businesses and individuals meet their specific goals at every stage of their financial journey. First Citizens Bank brings together personal service and powerful tools to help customers do more with their money – and make more of their future. Visit First Citizens' website at 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, 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.

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, 2020, its Quarterly Reports on Form 10-Q for the periods ended March 31, 2021, June 30, 2021 and September 30, 2021, and its other filings with the Securities and Exchange Commission (the "SEC"), and in CIT's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as amended on Form 10-K/A, its Quarterly Reports on Form 10-Q for the periods ended March 31, 2021, June 30, 2021 and September 30, 2021, and its other filings with the SEC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands, unaudited)	December 31, 2021			December 31, 2020
Assets
Cash and due from banks	$	337,814		$	362,048
Overnight investments		9,114,660			4,347,336
Investment in marketable equity securities (cost of $72,894 at December 31, 2021 and $84,837 at December 31, 2020)		97,528			91,680
Investment securities available for sale (cost of $9,215,219 at December 31, 2021 and $6,911,965 at December 31, 2020)		9,203,427			7,014,243
Investment securities held to maturity (fair value of $3,759,650 at December 31, 2021 and $2,838,499 at December 31, 2020)		3,809,453			2,816,982
Loans held for sale		98,741			124,837
Loans and leases		32,371,522			32,791,975
Allowance for credit losses		(178,493	)		(224,314	)
Net loans and leases		32,193,029			32,567,661
Premises and equipment		1,233,418			1,251,283
Other real estate owned		39,328			50,890
Income earned not collected		134,237			145,694
Goodwill		346,064			350,298
Other intangible assets		43,085			50,775
Other assets		1,657,356			783,953
Total assets	$	58,308,140		$	49,957,680
Liabilities
Deposits:
Noninterest-bearing	$	21,404,808		$	18,014,029
Interest-bearing		30,001,286			25,417,580
Total deposits		51,406,094			43,431,609
Securities sold under customer repurchase agreements		589,101			641,487
Federal Home Loan Bank borrowings		644,659			655,175
Subordinated debt		477,564			504,518
Other borrowings		72,155			88,470
FDIC shared-loss payable		—			15,601
Other liabilities		381,326			391,552
Total liabilities		53,570,899			45,728,412
Shareholders' equity
Common stock:
Class A - $1 par value (16,000,000 shares authorized; 8,811,220 shares issued and outstanding at December 31, 2021 and December 31, 2020)		8,811			8,811
Class B - $1 par value (2,000,000 shares authorized; 1,005,185 shares issued and outstanding at December 31, 2021 and December 31, 2020)		1,005			1,005
Preferred stock - $0.01 par value (10,000,000 shares authorized; 345,000 shares issued and outstanding at December 31, 2021 and December 31, 2020; $1,000 per share liquidity preference)		339,937			339,937
Retained earnings		4,377,712			3,867,252
Accumulated other comprehensive income		9,776			12,263
Total shareholders' equity		4,737,241			4,229,268
Total liabilities and shareholders' equity	$	58,308,140		$	49,957,680

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three months ended								Twelve months ended
(Dollars in thousands, except per share data, unaudited)	December 31, 2021			September 30, 2021			December 31, 2020		December 31, 2021			December 31, 2020
Interest income
Loans and leases	$	328,288		$	319,214		$	344,691	$	1,294,813		$	1,332,720
Investment securities interest and dividend income		39,670			39,246			31,166		145,200			144,459
Overnight investments		4,049			3,395			1,019		10,997			6,847
Total interest income		372,007			361,855			376,876		1,451,010			1,484,026
Interest expense
Deposits		7,832			8,073			11,057		33,240			66,635
Securities sold under customer repurchase agreements		260			358			374		1,312			1,610
Federal Home Loan Bank borrowings		2,110			2,114			2,151		8,410			9,763
Subordinated debt		4,166			4,174			4,291		16,709			16,074
Other borrowings		237			249			287		1,005			1,775
Total interest expense		14,605			14,968			18,160		60,676			95,857
Net interest income		357,402			346,887			358,716		1,390,334			1,388,169
Provision (credit) for credit losses		(5,138	)		(1,120	)		5,403		(36,835	)		58,352
Net interest income after provision for credit losses		362,540			348,007			353,313		1,427,169			1,329,817
Noninterest income
Wealth management services		32,902			31,935			27,624		128,788			102,776
Service charges on deposit accounts		26,479			24,858			22,886		94,756			87,662
Cardholder services, net		21,374			22,879			18,788		86,684			74,291
Other service charges and fees		9,270			9,205			8,082		35,923			30,911
Merchant services, net		7,282			8,409			6,108		33,140			24,122
Mortgage income		5,482			6,106			11,451		30,508			39,592
Insurance commissions		3,854			4,000			4,091		15,556			14,544
ATM income		1,468			1,481			1,404		6,002			5,758
Marketable equity securities gains, net		3,066			8,082			18,934		34,081			29,395
Realized gains on investment securities available for sale, net		—			3,350			5,281		33,119			60,253
Other		3,082			2,639			2,116		9,445			7,446
Total noninterest income		114,259			122,944			126,765		508,002			476,750
Noninterest expense
Salaries and wages		160,774			160,947			150,835		623,194			590,020
Employee benefits		32,490			32,146			31,581		135,659			132,244
Occupancy expense		29,897			29,101			32,143		117,180			117,169
Equipment expense		30,237			30,229			29,481		119,171			115,535
Processing fees paid to third parties		16,041			15,602			12,306		59,743			44,791
FDIC insurance expense		3,871			3,661			3,337		14,132			12,701
Collection and foreclosure-related expenses		2,235			836			3,487		5,442			13,658
Merger-related expenses		9,862			7,013			5,342		29,463			17,450
Other		37,781			33,283			36,861		129,526			145,117
Total noninterest expense		323,188			312,818			305,373		1,233,510			1,188,685
Income before income taxes		153,611			158,133			174,705		701,661			617,882
Income taxes		30,329			34,060			36,621		154,202			126,159
Net income	$	123,282		$	124,073		$	138,084	$	547,459		$	491,723
Preferred stock dividends		4,636			4,636			4,636		18,544			14,062
Net income available to common shareholders	$	118,646		$	119,437		$	133,448	$	528,915		$	477,661
Weighted average common shares outstanding		9,816,405			9,816,405			9,816,405		9,816,405			10,056,654
Earnings per common share	$	12.09		$	12.17		$	13.59	$	53.88		$	47.50
Dividends declared per common share		0.47			0.47			0.47		1.88			1.67

SELECTED QUARTERLY RATIOS

	Three months ended
	December 31, 2021			September 30, 2021			December 31, 2020
SELECTED RATIOS ⁽¹⁾
Book value per share at period-end	$	447.95		$	432.07		$	396.21
Annualized return on average assets		0.84	%		0.88	%		1.11	%
Annualized return on average equity		10.96			11.29			14.02
Total risk-based capital ratio		14.35			14.30			13.81
Tier 1 risk-based capital ratio		12.47			12.32			11.63
Common equity Tier 1 ratio		11.50			11.34			10.61
Tier 1 leverage capital ratio		7.59			7.68			7.86
⁽¹⁾Capital ratios are preliminary

ALLOWANCE FOR CREDIT LOSSES AND ASSET QUALITY DISCLOSURES

	Three months ended
(Dollars in thousands, unaudited)	December 31, 2021			September 30, 2021			December 31, 2020
ALLOWANCE FOR CREDIT LOSSES ⁽¹⁾
ACL at beginning of period	$	183,194		$	189,094		$	223,936
Provision for credit losses		(5,138	)		(1,120	)		5,403
Net charge-offs of loans and leases:
Charge-offs		(8,258	)		(11,074	)		(9,848	)
Recoveries		8,695			6,293			4,823
Net charge-offs of loans and leases		437			(4,781	)		(5,025	)
ACL at end of period	$	178,493		$	183,193		$	224,314
ACL at end of period allocated to:
PCD	$	14,802		$	18,438		$	23,987
Non-PCD		163,691			164,756			200,327
ACL at end of period	$	178,493		$	183,194		$	224,314
Reserve for unfunded commitments	$	11,815		$	11,472		$	12,814
SELECTED LOAN DATA
Average loans and leases:
PCD	$	356,997		$	384,673		$	479,302
Non-PCD		32,030,717			32,222,960			32,374,204
Loans and leases at period-end:
PCD		337,624			373,255			462,882
Non-PCD		32,033,898			32,142,934			32,329,093
RISK ELEMENTS
Nonaccrual loans and leases	$	120,306		$	163,775		$	191,483
Other real estate owned		39,328			40,649			50,890
Total nonperforming assets	$	159,634		$	204,424		$	242,373
Accruing loans and leases 90 days or more past due	$	6,925		$	5,614		$	5,862
RATIOS
Net charge-offs (annualized) to average loans and leases	(0.01) %				0.06	%		0.06	%
ACL to total loans and leases⁽²⁾:
PCD		4.38			4.94			5.18
Non-PCD		0.51			0.51			0.62
Total		0.55			0.56			0.68
Ratio of total nonperforming assets to total loans, leases and other real estate owned		0.49			0.63			0.74

⁽¹⁾BancShares recorded no ACL on investment securities as of December 31, 2021, September 30, 2021, or December 31, 2020.

⁽²⁾ Loans originated in relation to the SBA-PPP do not have a recorded ACL. As of December 31, 2021, the ratio of ACL to total Non-PCD loans excluding SBA-PPP loans was 0.52% while the ratio of ACL to total loans excluding SBA-PPP loans was 0.56%. As of December 31, 2020, the ratio of ACL to total Non-PCD loans excluding SBA-PPP loans was 0.67% while the ratio of ACL to total loans excluding SBA-PPP loans was 0.74%.

AVERAGE BALANCE SHEETS AND NET INTEREST MARGIN

	Three months ended
	December 31, 2021							September 30, 2021							December 31, 2020
	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⁾	$	32,488,033		$	328,781	3.98	%	$	32,707,591		$	319,738	3.85	%	$	32,964,390		$	345,300	4.12	%
Investment securities:
U.S. Treasury		560,737			1,401	0.99			—			—	—			526,072			250	0.19
Government agency		832,821			1,381	0.66			824,499			2,076	1.01			695,757			1,574	0.90
Mortgage-backed securities		9,300,971			28,597	1.23			9,164,180			29,056	1.27			7,981,834			21,130	1.06
Corporate bonds		620,341			7,782	5.02			597,386			7,610	5.10			591,780			7,657	5.18
Other investments		109,233			563	2.04			121,454			544	1.78			93,681			600	2.55
Total investment securities		11,424,103			39,724	1.39			10,707,519			39,286	1.47			9,889,124			31,211	1.26
Overnight investments		10,689,674			4,050	0.15			8,956,055			3,395	0.15			4,069,309			1,019	0.10
Total interest-earning assets	$	54,601,810		$	372,555	2.69		$	52,371,165		$	362,419	2.73		$	46,922,823		$	377,530	3.17
Cash and due from banks		336,715							364,593							325,890
Premises and equipment		1,239,037							1,239,111							1,262,831
Allowance for credit losses		(183,810	)						(189,885	)						(225,339	)
Other real estate owned		41,673							40,786							50,949
Other assets		2,080,518							2,096,588							1,220,649
Total assets	$	58,115,943						$	55,922,358						$	49,557,803
INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Checking with interest	$	11,993,935		$	1,382	0.05	%	$	11,323,503		$	1,350	0.05	%	$	9,688,744		$	1,533	0.06	%
Savings		4,140,161			324	0.03			3,979,389			342	0.03			3,230,625			306	0.04
Money market accounts		10,357,923			2,223	0.09			9,866,327			2,357	0.09			8,529,816			3,242	0.15
Time deposits		2,517,265			3,903	0.62			2,599,006			4,024	0.61			3,017,044			5,976	0.79
Total interest-bearing deposits		29,009,284			7,832	0.11			27,768,225			8,073	0.12			24,466,229			11,057	0.18
Securities sold under customer repurchase agreements		650,123			260	0.16			672,114			358	0.21			684,311			374	0.22
Other short-term borrowings		—			—	—			—			—	—			—			—	—
Long-term borrowings		1,217,099			6,513	2.12			1,222,452			6,537	2.12			1,250,682			6,729	2.13
Total interest-bearing liabilities		30,876,506		$	14,605	0.19			29,662,791		$	14,968	0.20			26,401,222		$	18,160	0.27
Demand deposits		22,229,233							21,338,862							18,657,083
Other liabilities		377,286							384,113							373,403
Shareholders' equity		4,632,918							4,536,592							4,126,095
Total liabilities and shareholders' equity	$	58,115,943						$	55,922,358						$	49,557,803
Interest rate spread						2.50	%						2.53	%						2.90	%
Net interest income and net yield on interest-earning assets				$	357,950	2.58	%				$	347,451	2.61	%				$	359,370	3.02	%

⁽¹⁾ Loans and leases include PCD and non-PCD 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% for all periods presented, as well as state income tax rates of 3.3% for the three months ended December 31, 2021 and September 30, 2021, and 3.4% for the three months ended December 31, 2020. The taxable-equivalent adjustment was $548 thousand, $564 thousand, and $654 thousand for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively.

Contact:	Barbara Thompson	Deanna Hart
	Corporate Communications	Investor Relations
	919-716-2716	919-716-2137

First Citizens BancShares Reports Earnings for Fourth Quarter and Full Year 2021