First Citizens Reports Record Earnings for Third Quarter 1999

October 25, 1999

RALEIGH, N.C. — First Citizens BancShares, Inc. (Nasdaq: FCNCA) reports record earnings for the quarter ending Sept. 30, 1999, according to Lewis R. Holding, chairman of the board. Third quarter earnings totaled $23.1 million compared to $18.1 million for the corresponding period of 1998, an increase of 27.9 percent.

Per share income for the third quarter 1999 totaled $2.18 compared to $1.70 for the same period a year ago. First Citizens' current quarter results generated an annualized return on average assets of 0.95 percent and a return on average equity of 13.07 percent.

For the nine months ending Sept. 30, 1999, net income was $62.5 million, up 21.8 percent from the $51.3 million earned during the first nine months of 1998. Per share net income was $5.88, a 23.3 percent increase over the $4.77 per share earned during the first nine months of 1998. The 1999 year-to-date earnings yielded an annualized return on assets of 0.87 percent and a return on equity of 12.20 percent.

Holding noted that during the third quarter of 1999, sales of branch offices generated non-recurring after-tax gains of $2.8 million or $0.26 per share. Excluding the impact of the gains resulting from the branch sales, net income for the three- and nine-month periods ending Sept. 30, 1999, was $20.3 million and $59.7 million, respectively. Net income per share excluding the gains was $1.92 and $5.62 for the three- and nine-month periods ending Sept. 30, 1999.

Holding also attributed the higher net income during 1999 to improved net interest income and noninterest income as well as lower provision for loan losses. Net interest income increased 8.8 percent as a result of balance sheet growth and an improved net yield on interest earning assets. For the nine-month period ended Sept. 30, 1999, the net yield equaled 4.10 percent, up 13 basis points from the same period in 1998.

In addition to the gains recognized on branch sales during the third quarter, noninterest income benefited from higher service charge income, credit card income, investor servicing fees and mortgage loan activities.

Noninterest expenses totaled $95.1 million and $279.7 million, respectively, for the third quarter and nine-month period in 1999, increases of 10.4 percent and 11.4 percent over the corresponding periods of 1998. Higher personnel costs resulting from branch expansion contributed to much of the growth in noninterest expenses, as did telecommunications, credit card processing costs and legal expense.

Two of First Citizens BancShares major subsidiaries are Raleigh, N.C.-based First Citizens Bank with 357 branches in more than 200 communities in North Carolina, Virginia and West Virginia, and Fort Myers, Fla.-based Atlantic States Bank with 19 branches in North Metro Atlanta and eight in Southwest Florida. Headquartered in Raleigh, N.C., First Citizens BancShares has $9.58 billion in assets and is committed to providing superior financial services to individual customers and small to mid-sized businesses. The company has had its Year 2000 (Y2K) strategy in place since 1996 and is ready for the date change. For more information, visit the First Citizens web site.