<PAGE>
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, 1996 Commission File Number 0-11172
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.
(Exact name of registrant as specified in its charter)
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 practical date.
Class Outstanding at July 31, 1996
Common Stock, $5.00 Par Value 892,813 Shares
Non-voting Common Stock, $5.00 Par Value 46,614 Shares
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Page 2
<PAGE>
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET - UNAUDITED (dollars in thousands)
<TABLE>
<CAPTION>
June 30, December 31, June 30,
1996 1995 1995
<S> <C> <C> <C>
ASSETS
Cash and due from banks:
Noninterest-bearing $73,223 $88,892 $93,407
Interest-bearing 12,150 12,675 13,525
Total cash and due from banks 85,373 101,567 106,932
Investment securities:
Held-to-maturity 452,270 451,796 451,708
Available-for-sale 14,426 13,185 11,928
Total securities 466,696 464,981 463,636
Federal funds sold 0 0 0
\ross loans and discounts
Real estate - construction 14,952 16,334 14,454
Real estate - mortgage 720,945 659,371 596,827
Installment 334,656 332,817 299,716
Commercial, financial and agricultural 114,226 105,737 104,061
Less: Reserve for loan losses (22,500) (21,153) (20,785)
Net loans and discounts 1,162,279 1,093,106 994,273
Premises and equipment 47,744 44,186 41,679
Other real estate owned 797 473 189
Interest income accrued, not collected 14,620 14,225 11,390
Intangible assets 13,604 16,710 16,861
Other assets 17,034 16,426 15,062
TOTAL ASSETS $1,808,147 $1,751,674 $1,650,022
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand 269,171 $241,824 226,250
Time 653,611 590,227 591,891
Savings 633,850 663,888 618,862
Total deposits 1,556,632 1,495,939 1,437,003
Federal funds purchased 4,000 20,600 9,800
Securities sold under repurchase agreements 103,307 97,907 67,863
Term loan 10,850 11,700 12,550
Other liabilities 12,026 13,442 19,847
TOTAL LIABILITIES 1,686,815 1,639,588 1,547,063
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, 1996, 1996-47,720,
December 31, 1995 and June 30, 1995 - 50,720 239 254 254
Voting common stock - $5.00 par value, authorized 2,000,000;
issued and outstanding June 30, 1996, December 31, 1995
and June 30, 1995 - 892,813 4,464 4,464 4,464
Surplus 55,000 55,000 55,000
Undivided profits 51,624 43,152 34,976
Unrealized gain on investment securities available-for-sale, net of taxes 6,723 5,934 4,983
TOTAL STOCKHOLDERS' EQUITY 121,332 112,086 102,959
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,808,147 $1,751,674 $1,650,022
</TABLE>
Page 3
<PAGE>
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME - UNAUDITED
(dollars in thousands, except for per share amounts)
<TABLE>
<CAPTION>
Quarter Ended June 30, Six Months Ended June 30,
------------------------------------ ---------------------------------
1996 1995 % Change 1996 1995 % Change
----------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Interest income and fees:
Loans $25,259 $21,961 15.02% $49,829 $42,438 17.42%
United States Government obligations 6,463 6,081 6.28% 12,859 11,689 10.01%
Mortgage-backed securities 25 0 100.00% 54 0 100.00%
Tax-exempt securities 527 494 6.68% 1,096 1,013 8.19%
Other securities and federal funds sold 412 392 5.10% 1,046 823 27.10%
32,686 28,928 12.99% 64,884 55,963 15.94%
Interest expense:
Deposits 12,415 11,897 4.35% 25,120 22,818 10.09%
Short-term borrowings 1,290 1,161 11.11% 2,604 2,264 15.02%
Long-term borrowings 220 258 -14.73% 447 531 -15.82%
13,925 13,316 4.57% 28,171 25,613 9.99%
Net interest income 18,761 15,612 20.17% 36,713 30,350 20.97%
Provision for loan losses 1,290 1,467 -12.07% 2,310 1,871 23.46%
Net interest income after
provision for loan losses 17,471 14,145 23.51% 34,403 28,479 20.80%
Noninterest income:
Service charges on deposit accounts 2,816 2,520 11.75% 5,521 5,022 9.94%
Fees for other customer services 1,728 1,570 10.06% 3,344 3,148 6.23%
Other 726 656 10.67% 1,277 1,296 -1.47%
5,270 4,746 11.04% 10,142 9,466 7.14%
Noninterest expense:
Salaries and employee benefits 7,185 6,999 2.66% 14,179 14,157 0.16%
Net occupancy expense 573 514 11.48% 1,167 1,086 7.46%
Furniture and equipment expense 438 269 62.83% 808 660 22.42%
Depreciation expense 856 879 -2.62% 1,615 1,760 -8.24%
Amortization of intangibles 1,664 1,386 20.06% 3,250 2,641 23.06%
Other 4,986 5,633 -11.49% 9,895 11,194 -11.60%
15,702 15,680 0.14% 30,914 31,498 -1.85%
Income before income taxes 7,039 3,211 119.22% 13,631 6,447 111.43%
Applicable income taxes 2,387 1,063 124.55% 4,819 2,150 124.14%
Net Income $4,652 $2,148 116.57% $8,812 $4,297 105.07%
Earnings per common share $4.90 $2.23 119.75% $9.28 $4.46 107.99%
Weighted average common shares outstanding 940,533 943,533 -0.32% 940,713 943,533 -0.30%
Page 4
<PAGE>
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED
(dollars in thousands):
</TABLE>
<TABLE>
<CAPTION>
Unrealized
Non-Voting Voting Gain/(Loss) on Total
Preferred Common Common Undivided Investment Stockholders'
Stock Stock Stock Surplus Profits Securities Equity
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $3,282 $254 $4,464 $55,000 $30,765 4,260 $98,025
Net income 4,297 4,297
Preferred stock dividends (86) (86)
Change in unrealized gain on investment 0
securities available-for-sale, net of taxes 723 723
Balance at June 30, 1995 3,282 254 4,464 55,000 34,976 4,983 102,959
Net income 8,261 8,261
Preferred stock dividends (85) (85)
Change in unrealized gain on investment
securities available-for-sale, net of taxes 951 951
Balance at December 31, 1995 3,282 254 4,464 55,000 43,152 5,934 112,086
Net income 8,812 8,812
Preferred stock dividends (85) (85)
Reacquired non-voting common stock (15) (255) (270)
Change in unrealized gain on investment
securities available-for-sale, net of taxes 789 789
Balance at June 30, 1996 $3,282 $239 $4,464 $55,000 $51,624 $6,723 $121,332
</TABLE>
Page 5
<PAGE>
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS - UNAUDITED (dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------------------------
1996 1995
---------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $8,812 $4,297
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses 2,310 1,871
Depreciation and amortization 4,894 4,401
Amortization/(accretion) of investment securities (112) (250)
Provision for deferred income taxes (793) (279)
Gains on sales of premises and equipment (96) (82)
(Increase)/decrease in interest income accrued, not collected (395) 736
Increase in accrued interest payable 17 2,811
Originations of loans held for resale (31,625) (17,964)
Proceeds from sales of loans held for resale 27,479 17,464
Gains on sales of loans held for resale (116) (62)
Increase in other assets (260) (2,151)
( Decrease)/increase in other liabilities (1,433) 1,715
Other operating activities 0 (1,072)
---------------------------------
Net Cash Provided By Operating Activities 8,682 11,435
=================================
Cash Flows From Investing Activities:
Net increase in loans (67,221) (77,808)
Proceeds from maturities of investment securities, available for sale 50 0
Proceeds from maturities of investment securities, held to maturity 101,530 159,425
Purchases of investment securities, held to maturity (101,943) (134,990)
Increase in federal funds sold 0 0
Proceeds from sales of premises and equipment 268 94
Purchases of premises and equipment (5,349) (2,481)
Net increase/(decrease) in other real estate owned (324) 81
Net increase/(decrease) in intangible assets 66 (3,884)
Purchase of institutions, net of cash acquired 4,543 0
---------------------------------
Net Cash Used In Investing Activities (68,380) (59,563)
=================================
Cash Flows From Financing Activities:
Net increase in deposits 55,910 50,485
(Decrease)increase in federal funds purchased and securities sold
under agreements to repurchase (11,200) 1,747
Term loan payments (850) (850)
Cash dividends paid (86) (86)
Reacquired common stock (270) 0
---------------------------------
Net Cash Provided By Financing Activities 43,504 51,296
=================================
Decrease in cash and due from banks (16,194) 3,168
Cash and due from banks at beginning of year 101,567 103,764
--------------------------------
Cash and due from banks at end of period $85,373 $106,932
=================================
Supplemental disclosures of cash flow information:
Interest paid $28,188 $22,802
=================================
Income taxes paid $5,290 $4,616
=================================
</TABLE>
Page 6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The preceding 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 1995. The significant accounting policies used during the current quarter
are unchanged from those disclosed in the 1995 Annual Report.
INCOME TAXES:
The provision for income taxes included in the consolidated statement of income
approximates the expected tax rate to be in effect for the entire year.
INVESTMENT SECURITIES:
In accordance with SFAS No. 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 No. 115, are classified as available-for-sale and carried at estimated fair
value with unrealized gains and losses included as a component of stockholders'
equity on an after-tax basis.
LOANS:
Loans on which the accrual of interest has been discontinued are designated
as nonaccrual loans. Loans, excluding most consumer loans, are placed in
nonaccrual status when principal or interest is delinquent 90 days or more.
Also, loans which are classified doubtful or loss, or where the borrower has
filed bankruptcy, are considered nonaccrual loans. Management considers all
nonaccrual loans to be impaired as well as other loans of which the ultimate
collectibility of principal and interest is uncertain. The effect of applying
SFAS No. 114, "Accounting by Creditors for Impairment of a Loan" and SFAS No.
118, "Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures", to impaired loans is considered immaterial to the consolidated
financial statements. Loans which exceed 90 days past due and are considered
uncollectible are generally charged-off against the allowance for loan losses.
Payments received on nonaccrual loans are applied to principal until such
amount is liquidated in full. Subsequent payments on nonaccrual loans are
recognized as interest income when received. Except in cases where other
accounting or regulatory rules apply, loans are generally returned to accrual
status when the collectibility of both principal and interest on a timely basis
is reasonably assured and all delinquent principal and interest on the loan
become well secured and in the process of collection.
Page 7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
MORTGAGE SERVICING RIGHTS:
On May 12, 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage
Servicing Rights", an amendment to SFAS No. 65, "Accounting for Certain Mortgage
Banking Activities", which is to be applied prospectively for fiscal years
beginning after December 15, 1995. SFAS No. 122 requires that a mortgage
servicing entity allocate the total cost of the mortgage loans purchased or
originated to the mortgage servicing rights (MSRs) and the loans (without the
MSRs) based on their relative fair values if it is practicable to estimate those
values. If it is not practical to estimate the fair values of the MSRs and the
mortgage loans (without the MSRs), the entire cost of purchasing or originating
the loans should be allocated to the mortgage loan and no cost should be
allocated to the MSR. In addition, SFAS No. 122 requires that an entity assess
its MSR portfolios for impairment based on the fair value of those rights. The
entity must stratify its MSRs that are capitalized after adoption of this
Statement based on one or more of the predominant risk characteristics of the
underlying loans. Impairment should be recognized through a valuation allowance
for each impaired stratum. Under SFAS No. 65, the cost of originated MSRs was
not recognized as an asset but was charged to earnings when the related loan was
sold. In addition, the cost allocation was different for purchased MSRs. In
contrast to a cost allocation based on relative market value as set forth in
SFAS No. 122, the prior requirement was to allocate the costs incurred in excess
of the market value of the loans without the MSRs to purchased MSRs.
Bancorporation has adopted SFAS No. 122 effective January 1, 1996, the effect of
which was not material. Bancorporation accounts for MSR's prior to the adoption
of SFAS No. 122 under the provisions of SFAS No. 65.
Page 8
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Page 9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
SUMMARY: (dollars in thousands, except for book value)
Net income was $4,652 for the quarter ended June 30, 1996, up 116.57% from
$2,148 reported for the same quarter a year ago, and represented annualized
returns of 15.41% on stockholders' equity and 1.13% on interest-earning assets.
For the six months ended June 30, 1996, net income was $8,812 up 105.07% from
$4,297 reported for the same period a year ago, and represented annualized
returns of 15.11% on stockholders' equity and 1.08% on interest-earning assets.
The increase in net income is attributed to an increase in net interest margin
and interest spread, an increase in service charges collected on deposit
accounts and a decrease in the cost of operations.
Taxable equivalent net interest income was up $3,479 or 21.95% and $6,287 or
20.16%, respectively, for the quarter and six months ended June 30, 1996 when
compared to the same periods a year ago. Noninterest income increased by $152 or
3.09% and $676 or 7.14%, respectively, for the quarter and six months ended June
30, 1996 as compared to the same periods in 1995. Noninterest expense increased
$22 or .14% for the quarter ended June 30, 1996 and decreased $584 or 1.85% for
the six months ended June 30, 1996 when compared to the same periods of 1995.
The provision for loan losses was $1,290 and $2,310 respectively, for the
quarter and six months ended June 30, 1996 as compared to $1,467 and $1,871 in
1995. Net loan losses for the second quarter were $422 or .15% of average gross
loans, up from the $196 or .08% of average gross loans a year earlier.
Average interest-earning assets increased $171,077 or 11.51% and $176,975 or
12.06%, respectively, for the quarter and six months ended June 30, 1996 when
compared with the same periods in 1995. Average gross loans increased $181,589
or 18.54% and $179,924 or 18.73%, respectively, for the quarter and six months
ended June 30, 1996 as compared to the same periods in 1995.
Nonperforming assets at June 30, 1996 were $4,150 or .35% of gross loans. The
reserve for loan losses totaled $22,500 and represented 1.90% of period-end
loans and 5.42 times nonperforming assets.
Net income per share for the second quarter of 1996 was $4.90, a 119.73%
increase from $2.23 for the second quarter of 1995, and net income per share for
the six months ended June 30, 1996 was $9.28, a 108.07% increase from $4.46 for
the same period a year ago. Book value per common share increased 18.81% to
$125.51, as compared to $105.64 for the same period in 1995.
The equity capital to total assets ratio at period-end was 6.71% as compared to
6.24% for the same period in 1995. The Tier 1 and total risk-based capital
ratios at June 30, 1996 were 9.16% and 10.77%, respectively, compared to
June 30, 1995 ratios 8.63% and 10.52%, respectively.
Page 10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
SUMMARY (Continued):
Components of Capital (dollars in thousands):
<TABLE>
<CAPTION>
June 30,
1996 1995
<S> <C> <C>
Stockholders' Equity:
Preferred stock $3,282 $3,282
Common stock 4,703 4,718
Surplus 55,000 55,000
Undivided profits 58,347 39,959
Total stockholders' equity 121,332 102,959
Reserve for loan losses 22,500 20,785
Total primary capital 143,832 123,744
Long-term debt qualifying as secondary capital 10,850 12,550
Total capital $154,682 $136,294
Tier I leverage ratio 5.77% 5.16%
Risk based capital ratio total 10.77% 10.52%
Tier I 9.16% 8.63%
Tier II 1.61% 1.89%
</TABLE>
NET INTEREST INCOME: (dollars in thousands)
Net interest income on a taxable equivalent basis was $19,331 for the second
quarter of 1996, an increase of 21.95% from $15,852 for the comparable period in
1995. Net interest income on a taxable equivalent basis was $37,467 for the six
months ended June 30, 1996, an increase of 20.16% from the $31,180 for the
comparable period in 1995. Good growth in interest-earning assets, led by loans,
accounted for the rise. Also adding to the increase was an increased yield on
interest-earning assets and lower funding costs. The net yield on
interest-earning assets (taxable equivalent net interest income as a percentage
of average interest-earning assets) increased 36 and 30 basis points,
respectively, for the quarter and six months ended June 30, 1996 when compared
to the same periods a year ago. The loan growth was primarily in commercial and
residential mortgages.
The following table presents the components of net
interest income for the second quarter ended June 30, 1996 and 1995:
Net Interest Income: (dollars in thousands)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Total interest income $32,686 $28,928 $64,884 $55,963
Total interest expense 13,925 13,316 28,171 25,613
Net interest income 18,761 15,612 36,713 30,350
Tax equivalent adjustment 364 406 754 830
Net interest income (taxable equivalent basis) $19,125 $16,018 $37,467 $31,180
</TABLE>
Page 11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
NET INTEREST INCOME (Continued):
Taxable Equivalent Rate/Volume Variance Analysis (Amounts in thousands)
<TABLE>
<CAPTION>
Quarter Ended June 30 Net
- ------------------------------------------------------
Average Balance Interest Rev./Exp. Yield Change Due To Increase
1996 1995 1996 1995 1996 1995 Rate Volume (Decrease)
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$1,160,825 $979,236 $25,337 $21,936 8.78% 8.99% Loans ($584) $3,985 $3,401
432,722 448,983 6,527 6,133 6.07% 5.48% Taxable investment securities 641 ($247) 394
39,024 36,961 811 758 8.36% 8.23% Non-taxable investment securities 10 $43 53
12,670 7,608 171 113 5.43% 5.96% Federal funds sold (11) $69 58
12,150 13,525 204 227 6.75% 6.73% Other earning assets 0 ($23) (23)
1,657,391 1,486,313 33,050 29,167 8.02% 7.87% Total interest-earning assets 56 3,827 3,883
Noninterest-earning assets:
63,681 77,073 Cash and due from banks
47,487 41,353 Premises and equipment
22,977 21,854 Other, less reserve for loan losses
134,145 140,280 Total noninterest-earning assets
$1,791,536 $1,626,593 TOTAL ASSETS
Interest-bearing liabilities:
$1,286,246 $1,191,607 12,415 11,897 3.88% 4.00% Deposits (400) $918 518
Federal funds purchased and securities
108,183 81,397 1,290 1,162 4.80% 5.73% sold under agreements to repurchase (193) $321 128
10,915 12,611 221 258 8.14% 8.21% Long-term debt (2) ($35) (37)
1,405,344 1,285,615 13,926 13,317 3.99% 4.15% Total interest-bearing liabilities (595) 1,204 609
Noninterest-bearing liabilities:
253,200 219,007 Demand deposits
13,257 19,805 Other liabilities
266,457 238,812 Total noninterest-bearing liabilities
119,735 102,166 Stockholders' equity
TOTAL LIABILITIES AND
$1,791,536 $1,626,593 13,926 13,317 STOCKHOLDERS' EQUITY (595) 1,204 609
$19,124 $15,850 Net interest income $651 $2,623 $3,274
8.02% 7.87% Interest income to interest-earning assets
3.38% 3.59% Interest expense to interest-earning assets
4.64% 4.28% Net interest income to interest-earning assets
</TABLE>
Page 12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
NET INTEREST INCOME (Continued):
Taxable Equivalent Rate/Volume Variance Analysis (Amounts in thousands)
<TABLE>
<CAPTION>
Six Months Ended June 30, Net
- -----------------------------------------------------------------
Average Balance Interest Rev./Exp. Yield Change Due To Increase
1996 1995 1996 1995 1996 1995 Rate Volume (Decrease)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
$1,140,675 $960,751 $49,992 $42,723 8.81% 8.97% Loans, net of unearned interest ($660) $7,929 $7,269
431,621 446,335 13,039 11,803 6.08% 5.33% Taxable investment securities 1,683 ($447) 1,236
40,563 38,243 1,686 1,558 8.36% 8.22% Non-taxable investment securities 31 $97 128
19,814 8,980 518 260 5.26% 5.84% Federal funds sold (27) $285 258
12,164 13,553 403 449 6.66% 6.68% Other earning assets 0 ($46) (46)
1,644,837 1,467,862 65,638 56,793 8.02% 7.80% Total interest-earning assets 1,027 7,818 8,845
Noninterest-earning assets:
65,636 76,255 Cash and due from banks
46,135 41,189 Premises and equipment
24,090 22,324 Other, less reserve for loan losses
135,861 139,768 Total noninterest-earning assets
$1,780,698 $1,607,630 TOTAL ASSETS
Interest-bearing liabilities:
$1,284,039 $1,181,280 25,120 22,818 3.93% 3.90% Deposits $281 $2,021 $2,302
Federal funds purchased and securities
110,179 79,177 2,604 2,264 4.75% 5.77% sold under agreements to repurchase (397) $737 340
11,121 12,858 447 531 8.08% 8.33% Long-term debt (14) ($70) (84)
1,405,339 1,273,315 28,171 25,613 4.03% 4.06% Total interest-bearing liabilities (130) 2,688 2,558
Noninterest-bearing liabilities:
244,369 217,426 Demand deposits
13,675 15,866 Other liabilities
258,044 233,292 Total noninterest-bearing liabilities
117,315 101,023 Stockholders' equity
TOTAL LIABILITIES AND
$1,780,698 $1,607,630 28,171 25,613 STOCKHOLDERS' EQUITY (130) 2,688 2,558
$37,467 $31,180 Net interest income $1,157 $5,130 $6,287
8.02% 7.80% Interest income to interest-earning assets
3.44% 3.52% Interest expense to interest-earning assets
4.58% 4.28% Net interest income to interest-earning assets
</TABLE>
Page 13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESERVE FOR LOAN LOSSES: (dollars in thousands)
The reserve at June 30, 1996 was $22,500 or 1.90% of total loans as compared to
$20,785 or 2.05% of total loans at June 30, 1995. For the quarter ended June 30,
1996, the provision for loan losses was $1,290, a decrease of 12.07% as compared
to $1,467 for the same period in 1995. For the six months ended June 30, 1996
the provision for loan losses was $2,310, an increase of 23.46% over the $1,871
for the same period in 1995 Net chargeoffs were $422 in the second quarter of
1996 which represented an increase of 114.21% when compared to the $197 reported
for the comparable period of 1995. For the six months ended June 30, 1996, net
chargeoffs were $963, an increase of 187.46% when compared to the $335 reported
for the six months ended 1995.
Provision and Reserve for Loan Losses: (dollars in thousands)
Quarter Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Reserve for loan losses:
Balance at beginning of period $ 21,632 $ 19,515 $ 21,153 $ 19,249
Provision charged to expense 1,290 1,467 2,310 1,871
Chargeoffs (817) (368) (1,601) (722)
Recoveries 395 171 638 387
Net chargeoffs (422) (197) (963) (335)
Balance at end of period $ 22,500 $ 20,785 $ 22,500 $ 20,785
Ratios (annualized):
Net Chargeoffs to:
Average loans .15 .08 .17 .07
Loans at end of period .14 .08 .16 .07
Reserve for loan losses 7.50 3.79 8.56 3.22
Page 14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
NONINTEREST INCOME AND EXPENSE: (dollars in thousands)
Total noninterest income for the quarter was $5,064, an increase of 8.30% from
the $4,676 earned for the second quarter of 1995. For the six months ended June
30, 1996, total noninterest income was $10,142, an increase of 7.14% from the
$9,466 earned for the second quarter of 1995. Much of the increase in
noninterest income was due to an increase in service charges on deposit
accounts. This increase was the result of growth in the number of deposit
accounts, the repricing of charges and an increased emphasis on collecting
service fees formerly waived.
Total noninterest expense for the second quarter of 1996 was $15,702, a slight
increase of .14% when compared with $15,680 for the same period a year ago. For
the six months ended June 30, 1996 total noninterest expense was $30,914, a
decrease of 1.85% when compared with $31,498 for the same period a year ago.
These results were due to staff expenses, the largest category of noninterest
expenses, being fairly flat, better expense control and a decrease in FDIC
insurance assessment.
The following table provides additional details of noninterest income and
expense:
Page 15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
NONINTEREST INCOME AND EXPENSE (Continued):
The following table provides details of noninterest income and expense:
Noninterest Income and Expense (dollars in thousands):
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, Change June 30, Change
------------------- --------------------------------------------------------
1996 1995 Amount Percent 1996 1995 Amount Percent
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Noninterest income:
Service charges on deposit accounts $2,610 $2,450 $160 6.53% $5,521 $5,022 $499 9.94%
Commissions, service charges and fees 652 582 70 12.03% 1,227 1,231 (4) -0.32%
Mortgage servicing 492 488 4 0.82% 995 984 11 1.12%
Bankcard fees and discounts 584 500 84 16.80% 1,122 933 189 20.26%
All other 726 656 70 10.67% 1,277 1,296 (19) -1.47%
Total noninterest income $5,064 $4,676 $388 8.30% $10,142 $9,466 $676 7.14%
Noninterest expense:
Salaries and wages $5,667 $5,517 $150 2.72% $11,083 $11,117 ($34) -0.31%
Pension and other employee benefits 1,518 1,482 36 2.43% 3,096 3,040 56 1.84%
Total staff expenses 7,185 6,999 186 2.66% 14,179 14,157 22 0.16%
Occupancy expense 993 800 193 24.13% 1,905 1,649 256 15.52%
Furniture and equipment expense 874 863 11 1.27% 1,685 1,857 (172) -9.26%
Amortization of intangibles 1,664 1,386 278 20.06% 3,250 2,641 609 23.06%
Telephone 315 301 14 4.65% 625 617 8 1.30%
Stationery and supplies 318 286 32 11.19% 666 552 114 20.65%
Professional services 247 429 (182) -42.42% 504 729 (225) -30.86%
Automated services 1,227 1,163 64 5.50% 2,529 2,361 168 7.12%
FDIC insurance assessment 68 787 (719) -91.36% 137 1,566 (1,429) -91.25%
Bankcard 589 521 68 13.05% 1,150 980 170 17.35%
Postage 290 292 (2) -0.68% 656 608 48 7.89%
All other 1,932 1,853 79 4.26% 3,628 3,781 (153) -4.05%
Total noninterest expense $15,702 $15,680 $22 0.14% $30,914 $31,498 ($584) -1.85%
</TABLE>
Page 16
<PAGE>
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.
The annual Meeting of Shareholders of Registrant was held on April 24, 1996. At
the meeting, Shareholders voted to fix the number of Directors at 25 for 1996
and the 25 Nominees named in Registrant's Proxy Statement dated March 22, 1996
were elected as Directors for a term of 1 year. No other matters were voted on
at the meeting, and there was no solicitation in opposition to management's
Nominees as listed in the Proxy Statement.
Item 5. Other Information.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
11 Statement Re Computation of Per Share Earnings
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended June 30, 1996
Page 17
<PAGE>
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 9, 1996 By: (Signature of Jay C. Case)
Jay C. Case, Treasurer
(Chief Financial Officer)
Page 18
<PAGE>
Item 6. (a)
EXHIBIT 11
Statement Re Computation of Per Share Earnings
(dollars in thousands)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net income $4,652 $2,148 $8,812 $4,297
Less: Preferred stock dividend 42 43 43 86
Net income applicable to common stock $4,610 $2,105 $4,117 $4,211
Weighted average common shares outstanding 940,533 943,533 940,893 943,533
Earnings per common share $4.90 $2.23 $4.38 $4.46
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
FORM 10-Q
</LEGEND>
<CIK> 0000708848
<NAME> FIRST CITIZENS
<MULTIPLIER> 1,000
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<PERIOD-TYPE> 3-MOS
<CASH> 73,223
<INT-BEARING-DEPOSITS> 12,150
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 466,696
<INVESTMENTS-MARKET> 466,786
<LOANS> 1,184,779
<ALLOWANCE> (22,500)
<TOTAL-ASSETS> 1,808,147
<DEPOSITS> 1,556,632
<SHORT-TERM> 107,307
<LIABILITIES-OTHER> 12,026
<LONG-TERM> 10,850
<COMMON> 4,703
0
3,282
<OTHER-SE> 113,347
<TOTAL-LIABILITIES-AND-EQUITY> 1,808,147
<INTEREST-LOAN> 49,829
<INTEREST-INVEST> 14,009
<INTEREST-OTHER> 1,046
<INTEREST-TOTAL> 64,884
<INTEREST-DEPOSIT> 25,120
<INTEREST-EXPENSE> 28,171
<INTEREST-INCOME-NET> 36,713
<LOAN-LOSSES> 2,310
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 30,914
<INCOME-PRETAX> 13,631
<INCOME-PRE-EXTRAORDINARY> 13,631
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,812
<EPS-PRIMARY> 9.28
<EPS-DILUTED> 9.28
<YIELD-ACTUAL> 8.02
<LOANS-NON> 3,353
<LOANS-PAST> 1,512
<LOANS-TROUBLED> 474
<LOANS-PROBLEM> 22,246
<ALLOWANCE-OPEN> 21,153
<CHARGE-OFFS> 1,601
<RECOVERIES> 638
<ALLOWANCE-CLOSE> 22,500
<ALLOWANCE-DOMESTIC> 22,500
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 11,275
</TABLE>
