FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1994 Commission File Number 0-11172
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.
(Exact name of registrant as specified in its charter)
STATE OF SOUTH CAROLINA 57-0738665
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1230 MAIN STREET
COLUMBIA, SOUTH CAROLINA 29201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (803) 733-3456
NO CHANGE
(Former name or former address,
if changed since last report.)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES [ X ] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 31, 1994
COMMON STOCK, $5.00 PAR VALUE 892,813 SHARES
NON-VOTING COMMON STOCK, $5.00 PAR VALUE 52,720 SHARES
PAGE 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET (dollars in thousands)
June 30, 1994 December 31, June 30, 1993
(Unaudited) 1993 (Unaudited)
ASSETS
Cash and due from banks:
Noninterest-bearing $90,279 $96,442 $82,931
Interest-bearing 14,450 14,950 15,450
Total cash and due from banks 104,729 111,392 98,381
Investment securities:
Held-to-maturity 502,431 467,977 472,400
Available-for-sale 10,804
Total securities 513,235 467,977 472,400
Federal funds sold 0 0 4,500
Gross loans and discounts
Real estate - construction 16,923 18,952 15,119
Real estate - mortgage 536,905 509,314 478,415
Installment 255,063 253,874 238,147
Commercial, financial and
agricultural 96,105 98,863 92,789
Less: Unearned interest 0 0 (3)
Less: Reserve for loans losses (18,570) (18,061) (16,923)
Net loans and discounts 886,426 862,942 807,544
Premises and equipment 36,023 36,853 38,591
Other real estate owned 180 410 955
Interest income accrued, not
collected 9,773 10,651 11,042
Intangible assets 17,515 14,584 16,194
Other assets 14,997 14,169 6,064
TOTAL ASSETS $1,582,878 $1,518,978 $1,455,671
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand $213,915 $208,606 $189,981
Time 404,906 478,246 389,179
Savings 777,067 649,514 715,446
Total deposits 1,395,888 1,336,366 1,294,606
Federal funds purchased 13,600 8,000 0
Securities sold under repurchase
agreements 49,606 63,206 61,191
Subordinated notes and term loan 13,900 14,400 14,900
Other liabilities 16,178 12,769 6,778
TOTAL LIABILITIES 1,489,172 1,434,741 1,377,475
Stockholders' Equity:
Preferred stock 3,282 3,282 3,282
Non-voting common stock - $5.00
par value, authorized
1,000,000; issued and outstanding
June 30, 1994, December 31, 1993
and June 30, 1993 - 52,720 264 264 264
Common stock - $5.00 par value,
authorized 2,000,000; issued and
outstanding June 30, 1994,
December 31, 1993 and June 30,
1993 - 892,813 4,464 4,464 4,464
Surplus 55,000 55,000 55,000
Undivided profits 26,214 21,227 15,186
Unrealized gains 4,482 0 0
TOTAL STOCKHOLDERS' EQUITY 93,706 84,237 78,196
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,582,878 $1,518,978 $1,455,671
PAGE 3
CONSOLIDATED STATEMENT OF INCOME - UNAUDITED (dollars in thousands)
Quarter Ended June 30,
1994 1993 % Change
Interest income and fees:
Loans $18,558 $18,561 -0.02%
United States Government obligations 4,992 5,835 -14.45%
Tax exempt securities 597 496 20.36%
Other securities and federal funds sold 337 360 -6.39%
24,484 25,252 -3.04%
Interest expense:
Deposits 8,933 9,039 -1.17%
Short-term borrowings 573 388 47.68%
Long-term borrowings 224 274 -18.25%
9,730 9,701 0.30%
Net interest income 14,754 15,551 -5.13%
Provision for loan losses 860 482 78.42%
Net interest income after
provision for loan losses 13,894 15,069 -7.80%
Noninterest income:
Service charges on deposit accounts 2,572 2,579 -0.27%
Fees for other customer services 1,155 1,207 -4.31%
Investment securities transactions 0 44 -100.00%
Other 902 890 1.35%
4,629 4,720 -1.93%
Noninterest expense:
Salaries and employee benefits 6,816 6,605 3.19%
Net occupancy expense of premises 548 594 -7.74%
Furniture and equipment expense 386 448 -13.84%
Depreciation expense 1,048 967 8.38%
Amortization of intangibles 970 919 5.55%
Other 5,140 4,557 12.79%
14,908 14,090 5.81%
Income before income taxes and
cumulative effect of a change
in accounting principle 3,615 5,699 -36.57%
Applicable income taxes 1,243 1,979 -37.19%
Income before cumulative effect
of a change in accounting principle 2,372 3,720 -36.24%
Cumulative effect on prior years
(to December 31, 1992) of changing
to a different method of accounting
for income taxes 0 0 0.00%
Net Income $2,372 $3,720 -36.24%
Per share amounts:
Earnings per common share:
Income before cumulative effect of a
change in accounting principle $2.46 $3.89 -36.76%
Cumulative effect on prior years (to
December 31, 1992) of changing to a
different method of accounting for
income taxes 0.00 0.00 0.00%
Net income $2.46 $3.89 -36.76%
Weighted average common
shares outstanding 945,533 945,533 0.00%
Six Months Ended June 30,
1994 1993 % Change
Interest income and fees:
Loans $36,659 $36,875 -0.59%
United States Government obligations 9,785 11,893 -17.72%
Tax exempt securities 1,226 884 38.69%
Other securities and federal funds sold 735 760 -3.29%
48,405 50,412 -3.98%
Interest expense:
Deposits 17,279 18,525 -6.73%
Short-term borrowings 1,068 767 39.24%
Long-term borrowings 480 543 -11.60%
18,827 19,835 -5.08%
Net interest income 29,578 30,577 -3.27%
Provision for loan losses 1,158 1,456 -20.47%
Net interest income after
provision for loan losses 28,420 29,121 -2.41%
Noninterest income:
Service charges on deposit accounts 5,091 5,112 -0.41%
Fees for other customer services 2,257 2,414 -6.50%
Investment securities transactions 0 44 -100.00%
Other 1,763 1,681 4.88%
9,111 9,251 -1.51%
Noninterest expense:
Salaries and employee benefits 13,763 13,201 4.26%
Net occupancy expense of premises 1,109 1,226 -9.54%
Furniture and equipment expense 776 884 -12.22%
Depreciation expense 2,114 1,965 7.58%
Amortization of intangibles 1,888 1,769 6.73%
Other 10,276 8,872 15.83%
29,926 27,917 7.20%
Income before income taxes and
cumulative effect of a change
in accounting principle 7,605 10,455 -27.26%
Applicable income taxes 2,532 3,799 -33.35%
Income before cumulative effect
of a change in accounting principle 5,073 6,656 -23.78%
Cumulative effect on prior years
(to December 31, 1992) of changing
to a different method of accounting
for income taxes 0 221 -100.00%
Net Income $5,073 $6,877 -26.23%
Per share amounts:
Earnings per common share:
Income before cumulative effect of a
change in accounting principle $5.27 $6.95 -24.17%
Cumulative effect on prior years (to
December 31, 1992) of changing to a
different method of accounting for
income taxes 0.00 0.23 -100.00%
Net income $5.27 $7.18 -26.60%
Weighted average common
shares outstanding 945,533 945,533 0.00%
PAGE 4
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in thousands)
Non- Unreal- Total
Pre- Voting Voting Un- ized Stock-
ferred Common Common divided Gains holders'
Stock Stock Stock Surplus Profits (Losses) Equity
Balance at
December 31,
1992 $3,300 $264 $4,464 $40,000 $23,388 $71,416
Net income 6,877 6,877
Preferred stock
dividends (86) (86)
Transfer to
surplus 15,000 (15,000) 0
Reacquired
preferred
stock (18) 7 (11)
Balance at
June 30, 1993 3,282 264 4,464 55,000 15,186 78,196
Net income 6,127 6,127
Preferred stock
dividends (86) (86)
Balance at
December 31,
1993 3,282 264 4,464 55,000 21,227 84,237
Net income 5,073 5,073
Preferred stock
dividends (86) (86)
Unrealized gains,
net of taxes 4,482 4,482
Balance at
June 30, 1994 $3,282 $264 $4,464 $55,000 $26,214 $4,482 $93,706
PAGE 5
CONSOLIDATED STATEMENT OF CASH FLOWS - UNAUDITED (dollars in thousands)
Six Months Ended June 30,
1994 1993
Cash Flows From Operating Activities:
Net income $5,073 $6,877
Adjustments to reconcile net income
to net cash provided
by operating activities:
Provision for loan losses 1,158 1,456
Depreciation and amortization 4,002 3,734
Amortization/accretion of
investment securities 131 861
Deferred income tax benefit 979 17
(Gains) losses on investment
securities 0 (44)
Gains on sales of premises and
equipment (81) (6)
Decrease (increase) in interest
income accrued, not collected 878 424
Increase (decrease) in accrued
interest payable 111 (1,329)
Obligations of loans held for
resale (22,392) (30,432)
Proceeds from sales of loans
held for resale 25,779 30,022
Gains on sales of loans held
for resale (162) (269)
Increase in other assets (4,220) (449)
Increase (decrease) in other
liabilities 3,408 (41)
Other operating activities (224) (142)
Net Cash Provided By Operating
Activities 14,440 10,679
Cash Flows From Investing Activities:
Net increase in loans (27,867) (17,724)
Proceeds from maturities of
investment securities 190,156 81,494
Purchases of investment securities (228,519) (94,962)
Increase in federal funds sold 0 (4,500)
Proceeds from sales of premises
and equipment 356 10
Purchases of premises and equipment (1,576) (4,611)
Net (increase) decrease in other
real estate owned 230 (639)
Increase in intangible assets (4,819) (488)
Net Cash Used In Investing
Activities (72,039) (41,420)
Cash Flows From Financing Activities:
Net increase in deposits 59,522 11,481
(Decrease) increase in federal
funds purchased and securities
sold under agreements to
repurchase (8,000) 15,789
Maturities of subordinated
notes and term loan (500) (500)
Cash dividends paid (86) (86)
Reacquired preferred stock 0 (11)
Net Cash Provided By
Financing Activities 50,936 26,673
Decrease in cash and due from banks (6,663) (4,068)
Cash and due from banks at
beginning of year 111,392 102,449
Cash and due from banks at June 30 $104,729 $98,381
Supplemental disclosures of cash
flow information:
Interest paid $18,717 $21,164
Income taxes paid $2,168 $3,550
Unrealized appreciation in
securities available-for-sale:
Securities available-for-sale $6,895 -
Shareholders' equity $4,482 -
Deferred taxes $2,413 -
PAGE 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The foregoing financial statements are unaudited; however, in the opinion of
Management, all adjustments (comprising all normal recurring accruals)
necessary for a fair presentation of financial statements have been included.
A summary of Bancorporation's significant accounting policies is set forth
in Note 1 to the Consolidated Financial Statements in Bancorporation's
Annual Report on Form 10-K for 1993. The significant accounting policies
used during the current quarter are unchanged from those disclosed in the
1993 Annual Report.
Income Taxes:
Effective January 1, 1993, Bancorporation adopted Statement of Financial
Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes." The
adoption of SFAS 109 changes Bancorporation's method of accounting for income
taxes from the deferred method (APB 11) to an asset and liability approach.
Previously Bancorporation deferred the past tax effects of timing,
differences between financial reporting and taxable income. The asset and
liability approach requires the recognition of deferred tax liabilities and
assets for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of other assets and
liabilities. Further, SFAS 109 requires a valuation allowance be provided
against deferred tax assets unless management considers it more likely than
not that such assets will be realized. Based on current facts and
circumstances, management believes that deferred tax assets are reasonably
assured of realization and, accordingly, does not believe that a valuation
allowance is necessary. The cumulative effect to Bancorporation's results of
operations from the implementation of the new accounting standard was
$221,000.
Deferred tax assets and liabilities recorded pursuant to SFAS 109
are composed of the following at:
June 30, 1994 June 30, 1993
Provision for loan losses in excess
of amount deductible for taxes $6,421 $5,754
Other, net 760 601
Gross deferred tax asset 7,181 6,355
Book depreciation over tax 519 638
Interest income, accretion of bond
discount and expenses recognized
for books not taxed until realized 269 148
Deferred income and expense items
recognized in differing accounting periods 427 335
Pension plan 739 491
Unrealized gains on available-for-sale
securities 2,413 0
Other 152 385
Gross deferred tax liability 4,519 1,997
Net deferred tax asset $ 2,662 $ 4,358
Investment Securities:
Bancorporation adopted Statement of Financial Accounting Standards No. 115
(SFAS 115), "Accounting for Certain Investments in Debt and Equity
Securities. "Management has reviewed the investment securities portfolio and
classified all securities, except equity securities, as held-to-maturity and
carried at amortized cost since Bancorporation has both the positive intent
and ability to hold these securities to maturity. Equity securities, as
required by SFAS 115, are classified as available-for-sale and carried at
estimated fair value with unrealized gains and losses included in
stockholders' equity on an after-tax basis.
PAGE 7
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SUMMARY:
First Citizens Bancorporation reported net income of $2,372,000 for the second
quarter of 1994, a 36.24% decrease from the $3,720,000 for the second quarter
a year ago. Net income for the six months ended June 30, 1994 was
$5,073,000, a 26.23% decrease from the $6,877,000 reported for the same
period in 1993. The downturn in earnings is attributable to the decline in
net interest margin and interest spreads, along with increased cost of
operations.
Average loans net of unearned interest for the quarter ended June 30, 1994
increased $64,819,000 or 7.87% when compared to the same period in 1993, with
a yield of 8.42% for the second quarter of 1994. Average taxable and
non-taxable investment securities for the second quarter of 1994 increased by
$27,039,000 or 5.78% from the second quarter of 1993, with a taxable
equivalent yield of 4.83% for the second quarter of 1994. Average loans net
of unearned interest for the six months ended June 30, 1994 increased
$66,099,000 or 8.07% from the same period in 1993, with a yield of 8.39% for
the six months ended June 30, 1994. Average taxable and non-taxable
investment securities for the six months ended June 30, 1994 increased by
$16,197,000 or 3.50% from the same period in 1993, with a taxable equivalent
yield of 4.92% for the first six months of 1994.
For the quarter and six months ended June 30, 1994, noninterest income
declined slightly by $91,000 or 1.93% and $140,000 or 1.51%, respectively, as
compared to the same periods in 1993. For the quarter and six months ended
June 30, 1994, noninterest expense increased $818,000 or 5.81% and $2,009,000
or 7.20%, respectively, as compared to the same periods in 1993. The
increase in noninterest expense was primarily due to increased salary, wage
and employee benefit costs and overall operating operating expenses.
Net income per common share for the quarter ended June 30, 1994 decreased
36.76% to $2.46, as compared to $3.89 for the second quarter of 1993. Net
income per common share for the six months ended June 30, 1994 decreased
26.60% to $5.27, as compared to $7.18 for the same period in 1993.
Book value per common share as of June 30, 1994 increased 20.70% to $95.63,
as compared to $79.23 for the same period in 1993.
As illustrated in the following table, Tier 1 capital was 8.50% at June 30,
1994 as compared to 8.03% at June 30, 1993. Total risk based capital was
10.75% at June 30, 1994 as compared to 10.56% at June 30, 1993. The risk
based capital ratios were calculated using the 1992 Final Rules as defined
by Federal regulators.
PAGE 8
SUMMARY (CONTINUED):
Components of Capital (Dollars in thousands):
June 30,
1994 1993
Stockholders' Equity:
Preferred stock $ 3,282 $ 3,282
Common stock 4,728 4,728
Surplus 55,000 55,000
Undivided profits 30,696 15,186
Total stockholders' equity 93,706 78,196
Reserve for possible loan losses 18,570 16,923
Total primary capital 112,276 95,119
Long-term debt qualifying as
secondary capital 13,900 14,900
Total capital $126,176 $110,019
Tier I leverage ratio 4.77 4.55
Risk based capital ratio total 10.67 10.56
Tier I 8.46 8.03
Tier II 2.21 2.53
NET INTEREST INCOME:
Net interest income on a taxable equivalent basis was $15,160,000 for the
second quarter of 1994, a decrease of 4.50% from the $15,875,000 for the
comparable period in 1993. Net interest income on a taxable equivalent basis
was $30,421,000 for the six months ended June 30, 1994, a decrease of 2.48%
from the $31,194,000 for the comparable period in 1993.
The following table presents the components, of net interest income for the
quarter and six months ended June 30, 1994 and 1993:
Net Interest Income (Dollars in thousands):
Quarter Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
Total interest income $24,484 $25,252 $48,405 $50,412
Total interest expense 9,730 9,701 18,827 19,835
Net interest income 14,754 15,551 29,578 30,577
Tax equivalent adjustment 406 324 843 617
Net interest income (taxable
equivalent basis) $15,160 $15,875 $30,421 $31,194
PAGE 9
NET INTEREST INCOME - CONTINUED
Taxable Equivalent Rate/Volume Variance Analysis (Amounts in thousands)
Quarter Ended June 30
Interest
Average Balance Rev./Exp. Yield
1994 1993 1994 1993 1994 1993
Interest-earning
assets:
Loans, net of
unearned interest $888,422 $823,603 $18,640 $18,629 8.42% 9.07%
Taxable investment
securities 448,380 433,102 5,055 5,875 4.51% 5.43%
Non-taxable
investment
securities 46,543 34,782 918 753 7.89% 8.66%
Federal funds sold 7,080 13,991 67 105 3.80% 3.01%
Other earning assets 14,546 14,987 210 214 5.79% 5.73%
Total interest
-earning assets 1,404,971 1,320,465 24,890 25,576 7.10% 7.76%
Noninterest-earning
assets:
Cash and due from
banks 77,068 79,115
Premises and
equipment 36,202 38,920
Other, less reserve
for loan losses 21,046 23,620
Total noninterest
-earning assets 134,316 141,655
TOTAL ASSETS $1,539,287 $1,462,120
Interest-bearing
liabilities:
Deposits $1,151,342 $1,111,071 8,933 9,039 3.11% 3.26%
Federal funds
purchased and
securities
sold under
agreements to
repurchase 59,040 54,002 572 388 3.89% 2.88%
Long-term debt 13,939 15,108 225 274 6.46% 7.25%
Total interest
-bearing
liabilities 1,224,321 1,180,181 9,730 9,701 3.19% 3.30%
Noninterest-bearing
liabilities:
Demand deposits 204,855 190,057
Other liabilities 20,245 15,165
Total noninterest
-bearing
liabilities 225,100 205,222
Stockholders'
equity 89,866 76,717
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY $1,539,287 $1,462,120 9,730 9,701
Net interest income $15,160 $15,875
Interest income to
interest-earning
assets 7.10% 7.76%
Interest expense to
interest-earning
assets 3.19% 3.30%
Net interest income
to interest-earning
assets 3.95% 4.35%
Net
Change Due To Increase
Rate Volume (Decrease)
Interest-earning assets:
Loans, net of unearned
interest ($1,459) $1,470 $11
Taxable investment
securities (1,027) 207 (820)
Non-taxable investment
securities (90) 255 165
Federal funds sold 14 (52) (38)
Other earning assets 2 (6) (4)
Total interest-
earning assets (2,560) 1,874 (686)
Interest-bearing
liabilities:
Deposits (435) 329 (106)
Federal funds purchased
and securities sold
under agreements to
repurchase 148 36 184
Long-term debt (28) (21) (49)
Total interest-bearing
liabilities (315) 344 29
Net interest income ($2,245) $1,530 ($715)
PAGE 10
NET INTEREST INCOME - CONTINUED:
Taxable Equivalent Rate/Volume Variance Analysis (Amounts in thousands)
- - - Continued
Six Months Ended June 30
Interest
Average Balance Rev./Exp. Yield
1994 1993 1994 1993 1994 1993
Interest-earning
assets:
Loans, net of
unearned
interest $885,581 $819,482 $36,841 $37,036 8.39% 9.11%
Taxable
investment
securities 430,970 433,985 9,904 11,983 4.60% 5.52%
Non-taxable
investment
securities 48,424 29,212 1,885 1,340 7.79% 9.17%
Federal funds
sold 12,609 16,107 207 241 3.31% 3.02%
Other earning
assets 14,628 15,464 411 429 5.67% 5.59%
Total interest
-earning
assets 1,392,212 1,314,250 49,248 51,029 7.12% 7.81%
Noninterest-earning
assets:
Cash and due
from banks 76,511 77,335
Premises and
equipment 36,454 37,835
Other, less
reserve for
loan losses 21,917 23,924
Total noninterest
-earning assets 134,882 139,094
TOTAL ASSETS $1,527,094 $1,453,344
Interest-bearing
liabilities:
Deposits $1,146,900 $1,112,086 17,279 18,525 3.04% 3.36%
Federal funds
purchased and
securities sold
under agreements
to repurchase 62,426 53,689 1,067 767 3.45% 2.88%
Long-term debt 14,060 15,070 481 543 6.84% 7.21%
Total interest
-bearing
liabilities 1,223,386 1,180,845 18,827 19,835 3.10% 3.39%
Noninterest-bearing
liabilities:
Demand deposits 198,518 182,154
Other liabilities 17,446 15,271
Total noninterest
-bearing
liabilities 215,964 197,425
Stockholders'
equity 87,744 75,074
TOTAL LIABILITIES
AND STOCKHOLDERS'
EQUITY $1,527,094 $1,453,344 18,827 19,835
Net interest income $30,421 $31,194
Interest income to
interest-earning
assets 7.12% 7.81%
Interest expense to
interest-earning
assets 2.73% 3.04%
Net interest income
to interest-earning
assets 4.39% 4.77%
Net
Change Due To Increase
Rate Volume (Decrease)
Interest-earning assets:
Loans, net of unearned
interest ($3,207) $3,012 ($195)
Taxable investment
securities (1,996) (83) (2,079)
Non-taxable investment
securities (336) 881 545
Federal funds sold 19 (53) (34)
Other earning assets 5 (23) (18)
Total interest-earning
assets (5,515) 3,734 (1,781)
Interest-bearing
liabilities:
Deposits (1,831) 585 (1,246)
Federal funds purchased
and securities sold
under agreements to
repurchase 174 126 300
Long-term debt (26) (36) (62)
Total interest-bearing
liabilities (1,683) 675 (1,008)
Net interest income ($3,832) $3,059 ($773)
PAGE 11
RESERVE FOR POSSIBLE LOAN LOSSES:
The reserve at June 30, 1994 was $18,570,000 or 2.05% of total loans as
compared to $16,923,000 or 2.05% of total loans at June 30, 1993.
For the quarter ended June 30, 1994, the provision for possible loan losses
was $860,000, an increase of 78.42% over the $482,000 for the same period in
1993. For the six months ended June 30, 1994, the provision for possible
loan losses was $1,158,000, a decrease of 20.47% over the $1,456,000 for 1993.
Net charge-offs were $404,000 in the second quarter of 1994 which represented
an increase of 10.38% when compared to the $366,000 reported for the
comparable period of 1993. For the six months ended June 30, 1994, net
charge-offs were $649,000, a 42.21% decrease from the $1,123,000 for 1993.
Provision and Reserve For Loans Losses (Dollars in thousands):
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1994 1993 1994 1993
RESERVE FOR POSSIBLE
LOAN LOSSES:
Balance at beginning
of period $18,114 $16,807 $18,061 $16,589
Provision charged to
expense 860 481 1,158 1,456
Charge-offs (558) (517) (997) (1,521)
Recoveries 154 152 348 399
Net charge-offs (404) (365) (649) (1,122)
Balance at end of period $18,570 $16,923 $18,570 $16,923
RATIOS (ANNUALIZED):
Net Charge-offs to:
Average loans .18 .18 .15 .27
Loans at end of period .18 .18 .14 .27
Reserve for possible
loan losses 8.70 8.63 6.99 13.26
PAGE 12
NONINTEREST INCOME AND EXPENSE:
Total noninterest income for the quarter was $4,629,000, a decrease of 1.93%
from the $4,720,000 earned for the second quarter of 1993. For the six
months ended June 30, 1994, total noninterest income was $9,111,000, a
decrease of 1.51% from the $9,251,000 earned for the same period in 1993.
Total noninterest expense for the second quarter of 1994 was $14,908,000, an
increase of 5.81% when compared with $14,090,000 for the same period a year
ago. For the six months ended June 30, 1994, total noninterest expense was
$29,926,000, an increase of 7.20% when compared with $27,917,000 for the same
period a year ago. The increase in automation services is due to outsourcing
the majority of data processing and was offset by a decline in growth of
salaries and benefits through staff reductions and furniture and equipment
expense.
The following table provides additional details of noninterest income and
expense:
Noninterest Income and Expense (dollars in thousands):
Quarter Ended
June 30, Change
1994 1993 Amount Percent
Noninterest income:
Service charges on deposit
accounts $2,572 $2,579 ($7) -0.27%
Commissions, service charges
and fees 341 375 (34) -9.07%
Mortgage servicing 414 518 (104) -20.08%
Bankcard fees and discounts 400 358 42 11.73%
All other 902 890 12 1.35%
Total noninterest income $4,629 $4,720 ($91) -1.93%
Noninterest expense:
Salaries and wages $5,484 $5,335 $149 2.79%
Pension and other employee
benefits 1,332 1,270 62 4.88%
Total staff expenses 6,816 6,605 211 3.19%
Occupancy expense 816 840 (24) -2.86%
Furniture and equipment expense 1,167 1,170 (3) -0.26%
Amortization of intangibles 970 919 51 5.55%
Telephone 346 342 4 1.17%
Stationery and supplies 226 284 (58) -20.42%
Professional services 213 169 44 26.04%
Automated services 1,581 153 1,428 933.33%
FDIC insurance assessment 742 803 (61) -7.60%
Bankcard 487 419 68 16.23%
Postage 69 258 (189) -73.26%
All other 1,475 2,128 (653) -30.69%
Total noninterest expense $14,908 $14,090 $818 5.81%
Six Months Ended
June 30, Change
1994 1993 Amount Percent
Noninterest income:
Service charges on deposit
accounts $5,091 $5,112 ($21) -0.41%
Commissions, service charges
and fees 637 691 (54) -7.81%
Mortgage servicing 831 1,041 (210) -20.17%
Bankcard fees and discounts 789 726 63 8.68%
All other 1,763 1,681 82 4.88%
Total noninterest income $9,111 $9,251 ($140) -1.51%
Noninterest expense:
Salaries and wages $11,456 $10,615 $841 7.92%
Pension and other employee
benefits 2,307 2,586 (279) -10.79%
Total staff expenses 13,763 13,201 562 4.26%
Occupancy expense 1,645 1,747 (102) -5.84%
Furniture and equipment
expense 2,354 2,327 27 1.16%
Amortization of intangibles 1,888 1,769 119 6.73%
Telephone 675 656 19 2.90%
Stationery and supplies 622 582 40 6.87%
Professional services 667 362 305 84.25%
Automated services 2,744 323 2,421 749.54%
FDIC insurance assessment 1,483 1,606 (123) -7.66%
Bankcard 861 810 51 6.30%
Postage 242 568 (326) -57.39%
All other 2,982 3,966 (984) -24.81%
Total noninterest expense $29,926 $27,917 $2,009 7.20%
PAGE 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Neither Registrant nor its subsidiary, First Citizens Bank and Trust Company,
nor its subsidiaries, are a party to, nor is any of their property the
subject of, any material or other pending legal proceeding, other than
ordinary routine proceedings incidental to their business.
Item 2. Changes in Securities.
Not Applicable.
Item 3. Defaults upon Senior Securities.
Not Applicable.
Item 4. Submission of Matters to Vote of Security Holders.
Registrant's Annual Meeting of Shareholders was held on April 27, 1994.
Actions taken at the meeting, and the voting results regarding each such
matter, are described below. (In the voting results on each matter or
nominee listed below, "Broker Non-votes" refers to votes attributable to
voting shares held (for other beneficial owners) by brokers, banks and other
nominees which were counted as present at the meeting for any purpose but
which were not voted on that particular matter. "Votes Withheld" on each
nominee listed below refers to votes attributable to voting shares held by
any shareholder which were specifically withheld from the voting on those
particular nominees.)
1. Proposal to fix the number of Registrant's directors to be elected for
1994 at 26.
Voting Results: VOTED FOR 771,070; VOTED AGAINST 7,425;
ABSTAINED 1,113; BROKER NON-VOTES 0.
2. Election of 26 directors for 1994.
(See Listing on Next Page)
PAGE 14
Item 4. Submission of Matters to Vote of Security Holders (Continued)
Nominee's Name Votes For Votes Withheld Broker Non-votes
J. B. Apple 771,453 3,856 0
Richard W. Blackmon 771,418 3,891 0
George H. Broadrick 771,418 3,891 0
T. E. Brogdon 765,547 9,762 0
William M. Faulkner, Jr. 771,418 3,891 0
Laurens W. Floyd 771,453 3,856 0
Charles S. Haltiwanger 771,418 3,891 0
William E. Hancock, III 771,453 3,856 0
T. J. Harrelson 771,418 3,891 0
Robert B. Haynes 771,453 3,856 0
Wycliffe E. Haynes 771,453 3,856 0
Albert R. Heyward, II 771,418 3,891 0
Carmen P. Holding 771,453 3,856 0
Frank B. Holding 771,453 3,856 0
Dan H. Jordan 771,418 3,891 0
Thomas W. Lane 771,418 3,891 0
Russell A. McCoy, Jr. 771,418 3,891 0
E. Hite Miller, Sr. 771,418 3,891 0
N. Welch Morrisette, Jr. 771,418 3,891 0
E. P. Palmer 771,453 3,856 0
J. William Pitts, Sr. 771,418 3,891 0
Bruce L. Plyler 771,418 3,891 0
L. H. Rowell 771,418 3,891 0
William E. Sellars 771,418 3,891 0
Henry F. Sherrill 771,418 3,891 0
J. A. Stanley 771,453 3,856 0
Item 5. Other Information.
On June 3, 1994, Registrant purchased the assets and assumed the liabilities
of four (4) offices of Cooper River Federal Savings Association of which two
(2) are located in North Charleston, one (1) in Summerville, and one (1) in
Moncks Corner, South Carolina. Total assets purchased were $7,064,000 and
liabilities assumed totaled $61,666,000, of which $61,362,000 were deposits.
A premium of $4,500,000 on deposits purchased will be assigned to a core
deposit intangible asset and will be amortized over seven and one half
(7 1/2) years. The acquisition will be accounted for by the purchase method
of accounting. Proforma financial information is not attached since the
business acquired is not considered a "significant subsidiary" per Rule
1-02(v).
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
11 Statement Re Computation of Per Share Earnings - Page 21
(b) No reports on Form 8-K were filed during the quarter ended June 30,
1994.
PAGE 15
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST CITIZENS BANCORPORATION
OF SOUTH CAROLINA, INC.
(Registrant)
Dated: August 12, 1994 Jay C. Case, Treasurer
(Chief Financial Officer)
Dated: August 12, 1994 Jay C. Case, Treasurer
(Chief Financial Officer)
ITEM 6. (A)
EXHIBIT 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(DOLLARS IN THOUSANDS)
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1994 1993 1994 1993
Net income $2,372 $3,720 $5,073 $6,877
Less: Preferred stock dividend
requirements 43 43 86 86
Net income applicable to
common stock $2,329 $3,677 $4,987 $6,791
Weighted average common
shares outstanding 945,533 945,533 945,533 945,533
Earnings per common share:
Income before cumulative
effect of a change in
accounting principle $2.46 $3.89 $5.27 $6.95
Cumulative effect on prior
years (to December 31, 1992)
of changing to a different
method of accounting for
income taxes .00 .00 .00 .23
Net income $2.46 $3.89 $5.27 $7.18
