First Citizens Bancshares, Inc. · NASDAQ:FCNCA
First Citizens Bancshares — Q4 2020 Earnings Presentation
24 slides from First Citizens Bancshares's earnings presentation, Jan 27, 2021
Slide 1: First Citizens BancShares Fourth Quarter 2020 Earnings
First Citizens BancShares Fourth Quarter 2020 Earnings January 27, 2021
Slide 2: Forward Looking Statements
2 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
Slide 3: Update on CIT Group Merger
3 Update on CIT Group Merger Looking Back: Embarking on a Transformational Partnership ▪ Established Core Merger and Integration Planning teams to promote a coordinated approach to enterprise issues, drive execution, resolve issues, and aid key decisions ▪ Formed Integration Management Office to pro
Slide 4: Fourth Quarter Earnings Highlights
4 Fourth Quarter Earnings Highlights Increase (Decrease) Highlights $ in thousands 4Q20 4Q19 $ % Net interest income $ 358,716 $ 327,124 $ 31,592 9.7 % ▪ Net interest income includes $42.2 million in Noninterest income 126,765 104,393 22,372 21.4 SBA-PPP related interest and fee income. Noninterest
Slide 5: 2020 Earnings Highlights
5 2020 Earnings Highlights Increase (Decrease) Highlights $ in thousands 2020 2019 $ % Net interest income $ 1,388,169 $ 1,311,369 $ 76,800 5.9 % ▪ Net interest income includes $90.1 million in Noninterest income 476,750 415,861 60,889 14.6 SBA-PPP related interest and fee income. Noninterest expens
Slide 6: Quarterly Net Interest Income and Margin Trends
Quarterly Net Interest Income and Margin Trends 6 Net Interest Income & Margin (1) Highlights Current Quarter vs. Linked Quarter $500,000 3.59% 3.55% 4.00% 3.14% • Net interest income increased $5.1 million, or by 3.06% 3.02% 1.4%. 3.00% $400,000 • Increase primarily due to higher loan interest $354
Slide 7: Net Interest Margin Rollforward - Drivers of Margin Compression
Net Interest Margin Rollforward - Drivers of Margin Compression 7 NIM Rollforwards Highlights 3Q20 to 4Q20 Current Quarter vs. Linked Quarter ▪ 4 bps decline comprised of: +14 bps ▪ ~ (11) bps related to loan yield/mix; 3.06% +3 bps 3.02% ▪ ~ (7) bps related to investment yield/mix; (11) bps partial
Slide 8: Noninterest Income
8 Noninterest Income Noninterest Income Trends Excluding Non-Core Highlights Summary ($ in millions) (1) Activity ($ in 000) $165 Current Quarter vs. Linked Quarter $22 Noninterest income increased by $6.2 million primarily due to: ▪ $21.6 million increase in the fair value adjustment on marketable
Slide 9: Noninterest Expense
9 Noninterest Expense Noninterest Income Trends Excluding Non-Core Highlights Summary ($ in millions) (1) Activity ($ in 000) $305 Current Quarter vs. Linked Quarter $299 $292 $292 $292 $9 Noninterest expense increased by $13.7 million primarily due to: $8 $11 $8 $7 ▪ $4.6 million increase in core o
Slide 10: Balance Sheet Highlights & Key Financial Ratios
10 Balance Sheet Highlights & Key Financial Ratios Change vs. Highlights $ in millions 4Q20 3Q20 4Q19 3Q20 4Q19 4Q20 vs 3Q20 Assets ▪ Overnight investments increased $1.2 billion, funded primarily by Cash and due from banks $ 362 $ 352 $ 377 $ 10 $ (15) growth in demand deposits. Overnight investmen
Slide 11: Loans and Leases
11 Loans and Leases Loan Composition ($ in millions) Highlights $32,418 $32,845 $32,792 Quarter to Date Annualized and Year over Year Growth $33,000 $2,406 7.3% $3,084 9.5% $3,113 9.5% Total Loans 4Q20 vs. 3Q20: (0.6)% $30,000 $28,882 $29,241 $463 1.4% $531 1.7% $496 1.5% $559 1.9% $560 1.9% Adjuste
Slide 12: Paycheck Protection Program (PPP)
12 Paycheck Protection Program (PPP) Background ▪ The Paycheck Protection Program is an SBA loan program designed to provide a direct incentive for small businesses to keep their workers on the payroll. The SBA will forgive loans if the proceeds are used for specific expenditures and certain employm
Slide 13: Quarterly Credit Quality Trends
13 Quarterly Credit Quality Trends Net Charge-Offs (NCO) & Ratio (1) Allowance & Allowance Ratio (1) Quarterly Provision Expense $7,727 $28,355 $20,552 $4,042 $5,403 $250,000 3.00% $10,000 $9,411 0.25% $225,141 $222,450 $223,936 $224,314 $225,000 $7,506 $7,361 0.20% $7,536 $209,259 $7,500 $ in thous
Slide 14: Annual Credit Quality Trends
14 Annual Credit Quality Trends Net Charge-Offs (NCO) & Ratio (1) Allowance & Allowance Ratio (1) Annual Provision Expense $32,941 $25,692 $28,468 $31,441 $58,352 $250,000 3.00% $35,000 0.25% $30,012 $223,712 $225,141 $224,314 $225,000 $218,795 $221,893 $28,000 $26,648 0.20% $9,144 $7,536 $10,026 $
Slide 15: Allowance for Credit Losses (ACL)
15 Allowance for Credit Losses (ACL) Portfolio metrics remain stable with net charge-offs low during the fourth quarter. Allowance Rollforward Highlights $ in thousands Non PCD PCD Total 4Q20 1Q21 2Q21 3Q21 4Q21 ACL as of December 31, 2019 $ 217,605 $ 7,536 $ 225,141 GDP (Real GDP) 18,721 18,886 19,
Slide 16: Deposits
16 Deposits Deposit Composition ($ in millions) Highlights $50,000 Quarter to Date Annualized and Year over Year Growth $45,000 $43,432 $42,251 Total Deposits 4Q20 vs. 3Q20: 11.1% $41,479 $2,889 6.6% $3,140 7.4% Total Deposits 4Q20 vs. 4Q19: 26.1% $40,000 $3,277 7.9% Adjusted Deposits(1) 4Q20 vs. 4Q
Slide 17: Funding Mix
17 Funding Mix Summary ($ in millions) Highlights Change vs. 4Q20 vs. 3Q20 4Q20 3Q20 4Q19 3Q20 4Q19 ▪ Deposits represented 95.8% of our funding mix, Total deposits $ 43,432 95.8 % $ 42,251 95.6 % $ 34,431 96.3 % $ 1,181 $ 9,001 up from 95.6%. Securities sold under customer repurchase agreements 641
Slide 18: Capital Ratios
18 Capital Ratios Net income impact and capital raises offset by share repurchases and balance sheet growth Highlights Total Risk- Tier 1 Risk- Common Based Based Equity Tier Tier 1 • Year-to-date net income before preferred Capital Capital 1 Leverage dividends of $491.7 million contributed to a 159
Slide 19: Looking Ahead - Outlook for 1Q21
19 Looking Ahead - Outlook for 1Q21 Highlights Commentary ▪ Net interest margin will remain a headwind, but the worst of the decline is behind us. Net interest income and margin ▪ Deposit costs expected to continue to decline offsetting some of the low interest rate headwind. ▪ Net interest income -
Slide 20: Reconciliation of GAAP to Non-GAAP Measures
20 Reconciliation of GAAP to Non-GAAP Measures INCOME STATEMENT DATA Quarter-to-Date Year-to-Date In thousands December 31, September 30, June 30, March 31, December 31, December 31, December 31, 2020 2020 2020 2020 2019 2020 2019 Pre-Provision Net Revenue Income before income taxes $ 174,705 178,52
Slide 21: Reconciliation of GAAP to Non-GAAP Measures
21 Reconciliation of GAAP to Non-GAAP Measures INCOME STATEMENT DATA Quarter-to-Date Year-to-Date In thousands December 31, September 30, June 30, March 31, December 31, December 31, December 31, 2020 2020 2020 2020 2019 2020 2019 Adjusted Noninterest Income Total noninterest income $ 126,765 120,57
Slide 22: Reconciliation of GAAP to Non-GAAP Measures
22 Reconciliation of GAAP to Non-GAAP Measures BALANCE SHEET DATA December 31, September 30, June 30, March 31, December 31, In millions 2020 2020 2020 2020 2019 SBA-PPP Impact on Loans and Deposits Total loans $ 32,792 32,845 32,418 29,241 28,881 SBA-PPP loans 2,406 3,113 3,084 — — Loans excluding
Slide 23: Reconciliation of GAAP to Non-GAAP Measures
23 Reconciliation of GAAP to Non-GAAP Measures BALANCE SHEET DATA Quarter-to-Date Year-to-Date In millions December 31, September 30, June 30, March 31, December 31, December 31, December 31, 2020 2020 2020 2020 2019 2020 2019 Net Charge-Off Ratio Net charge-offs $ 5 3 7 8 9 22 30 Average loan balan
Slide 24: Reconciliation of GAAP to Non-GAAP Measures
24 Reconciliation of GAAP to Non-GAAP Measures PER SHARE DATA December 31, September 30, June 30, March 31, December 31, In Thousands 2020 2020 2020 2020 2019 Book Value Per Share Total shareholders' equity $ 4,229,268 4,074,415 3,991,444 3,957,520 3,586,184 Preferred stock (339,937) (339,937) (339,
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