First Citizens Bancshares, Inc. · NASDAQ:FCNCA
First Citizens Bancshares — Q3 2020 Earnings Presentation
25 slides from First Citizens Bancshares's earnings presentation, Oct 16, 2020
Slide 1: First Citizens BancShares Third Quarter 2020 Earnings
First Citizens BancShares Third Quarter 2020 Earnings October 16, 2020 # First Citizens BancShares
Slide 2: Forward-Looking Statements
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 First Citizens BancShares, Inc. (‘BancSh
Slide 3: Third Quarter Earnings Highlights
Third Quarter Earnings Highlights Increase (Decrease) - - Highlights ee) I) Net interest income $353,659 $336,425 $ 17,234 5.1% + Net interest income includes $28.9 million in Noninterest income 120,572 100,930 19,642 195 SBA-PPP related interest and fee income. Noninterest expense 291,662 270,425 2
Slide 4: Quarterly Net Interest Income and Margin Trends
Quarterly Net Interest Income and Margin Trends ($ in 000s) Net Interest Income & Margin Highli Current Quarter vs. Linked Quarter $600,000 ~ 3.59% 3.55% P 400% 3.06% + Net interest income increased $16.3 million, or | i i 4.8%. $500,000 3.51% aaa wna v4.8 3.04% 2.96% + Increase primarily due to hig
Slide 5: Net Interest Margin Rollforward- Drivers of Margin Compression
Net Interest Margin Rollforward- Drivers of Margin Compression NIM Rollforwards Highlights 2Q20 to 3Q20 esis! 4 by 3.06% cK +5 bps +3 bps +1 bps 06% (10) bps ee (7) bps 2Q20 Loans Investments Deposit SBA-PPP Debt 3Q20 (Yield/Mix) —_ (Yield/Mix) Cost Volume 3Q19 to 3Q20 3.77% (40) bps +12bps +4 bps 3
Slide 6: Noninterest Income
Noninterest Income Ss Current Quarter vs. Linked Quarter Noninterest income decreased by $44.8 million primarily due to: + $67.3 million decrease in the fair market value adjustment on Core: $121 marketable equity securities; partially offset by: $87 $7.7 million increase in gain on sale of AFS secu
Slide 7: Noninterest Expense
Noninterest Expense a Current Quarter vs. Linked Quarter $292 Noninterest expense was relatively unchanged. Notable variances " include: 49 $ + $2.1 million increase in personnel expense, primarily driven by an increase in health insurance claims; partially offset by: $57 + $1.1 million decrease in
Slide 8: Third Quarter Balance Sheet
Third Quarter Balance Sheet $ in millions 2Q20 3Q19 Assets 3Q20 vs 2020 Cash and due from banks $ 352 $ 389 $ 289 |$ (37) $ 63 + Investment portfolio and overnight investments increased by Ovemight investments 3,138 3,108 950 30 2,188 $353 million and $30 million, respectively, funded primarily by I
Slide 9: Loans by Type
Loans by Type Period-end Loan Balances an Composition ($ in millions) Highlights Quarter to Date Annualized and Year over Year Growth $33,000 $32,418 9.5% Total Loans 320 vs. 2Q20: 5.2% $30,000 $28,882 sae i 1.5% Total Loans 3Q20 vs. 3019: 20.8% $27,197 : ‘ ; $27,000 a oie Adjusted Loans" 3Q20 vs. 3
Slide 10: SBA-PPP
SBA-PPP SBA-PPP loans extended to over 23 thousand clients, with total loan proceeds of $ 3.2 billion™ Average loan size of approximately $138 thousand. 92.2% of overall SBA-PPP loans and 48.1% of outstanding dollars extended to clients with a loan size of less than $350 thousand. Loans greater than
Slide 11: Payment Extension Program
Payment Extension Program As of September 30th, 2020, payment extensions were active on 1,147 accounts with $467 million in outstanding balances (1.6% of total loans). _— Extensions were initially made to performing clients, on a 60 or 90 day basis. As of September 30", payment extensions were activ
Slide 12: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) Portfolio metrics remain stable and net charge-offs remain stable. Allowance Rollforward Highlights $ in thousands 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 GDP (Real GDP) 17,997 18,348 18,626 18,838 19,032 Day 1 CECL ion") (56,925) 19,001 (37,924) eee eGiit caass ae RUS. RoR [
Slide 13: Credit Quality Metrics
Credit Quality Metrics Net Charge-Offs (NCO) & Ratio ” nnn ton SE ae ee $10,000 $9,411 F $7,500 "| se,se4 3 | 8 $5,000 ~ = $2,500 | go 3Q19 4Q19 0.25% $7,506 $7,361 ~ 0.20% 0.15% eo - 0.05% r — r 0.00% 1Q20 2020 3Q20 HM NCO$ © NCORatio Nonperforming Assets & Ratio Highlights $300,000 ~ r 1.50% $5076
Slide 14: Deposits by Type
Deposits by Type Period-end Deposit Balances Deposit Composition ($ in millions) $45,000 $42,251 $40,000 $3,140 $35,000 27.3% $30,000 $25,000 21.8% ITT 22.1% $20,000 24.1% MLA 23.2% $15,000 $10,000 $18,149 [KEW $18,235 Bera 2,927 Figen] $13,689 Kaa $5,000 $0 3Q19 4Q19 1Q20 2Q20 3Q20 i Demand deposit
Slide 15: Funding Mix
Funding Mix Gnengais: 3Q20 vs. 2020 Soe az. cana Sane 2020 _3019_| . Deposits represented 95.6% of our funding mix, Total deposits $42,251 95.6% $41,479 95.4% $32,743 97.1%|$ 772 $ 9,508 relatively unchanged from 95.4%. eae oo tie a0: ey ae (4s) 172] * Cost of interest bearing liabilities decreased
Slide 16: Capital Ratios
Capital Ratios Net income impact offset by return of capital to shareholders through repurchases and balance sheet growth. Total Tier 1 Highlights Risk- Risk- Common Careal Cooma ey leven + Year-to-date net income of $353.6 million il to a 114 bps i in the total risk- December 31, 2019 12.12% 10.86%
Slide 17: Looking Ahead- Outlook for the Remainder of 2020
Looking Ahead- Outlook for the Remainder of 2020 piggies . Decline in net interest margin mostly behind us. . Deposit costs expected to continue to decline offsetting some of the low interest rate Net interest income and margin headwind . Net Interest income- flat to slight increase as recognition o
Slide 18: Appendix
Appendix # First Citizens _& | BancShares
Slide 19: Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend Income statement data In thousands Pre-Provision Net Revenue Income before income taxes Provision for credit losses Pre-provision net revenue (Non-GAAP) Adjusted Net Interest Income (TE) Total net interest income (TE) Less: In
Slide 20: Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
20 Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend Balance sheet data September 30 June 30, March 31, December 31, September 30, In millions 2020 2020 2020 2019 2019 Loan to Deposit Ratio Total deposits $ 42,251 41,479 35,347 34,431 32,743 Estimated SBA-PPP driven deposits
Slide 21: Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend Balance sheet data (Continued) September 30 June 30, March 31, December 31, September 30, In millions 2020 2020 2020 2019 2019 Adjusted Average Interest Earning Assets Average interest eaming assets $ 45,617 42,796 38,004 36,0
Slide 22: Consolidated Financial Highlights- Earnings
Consolidated Financial Highlights- Earnings 22 Three months ended Nine months ended September 30 (Dollars in thousands, except share data; September 30, June 30, 2020 September 30, 2020 2019 unaudited) 2020 019 SUMMARY OF OPERATIONS Interest income $ 374,334 $ 363,257 $ 362,318 $ 1,107,150 $ 1,049,9
Slide 23: Consolidated Financial Highlights- Balance Sheet and Selected Ratios
Consolidated Financial Highlights- Balance Sheet and Selected Ratios FirstCitizens BancShares Three months ended Nine months ended 30 (Dollars in thousands, except share data; September 30, June 30,2020 = September 30, 2020 2019 unaudited) 2020 2019 CONDENSED BALANCE SHEET Cash and due from banks $
Slide 24: Allowance for Credit Losses and Asset Quality Disclosures
24 Allowance for Credit Losses and Asset Quality Disclosures ended amber 30 (Dollars in thousands, unaudited) September 38,2020 __ Sumo 30, 2020 _ September 3, 2619 20: 2019, ‘ALLOWANCE FOR CREDIT LOSSES” ACL at beginning of period 8 222,450 209259 $s 226583 S 225,141 223,712 Adoption of ASC 326 = -
Slide 25: Average Balance and Net Interest Margin Summary
Average Balance and Net Interest Margin Summary FirstCitizens BancShares Three months ended 30, 2020 June 30, 2020 30, 2019 ‘Average Yield/ Average Yield! Average Yield (Dollars in thousands, unaudited) Balance Interest Rate” Balance Interest Rate“! Balance Interest Rate ® INTEREST-EARNING ASSETS ‘L
First Citizens Bancshares — Q3 2020 Earnings Presentation on 6ix