First Citizens Reports Earnings for 1998

January 25, 1999

RALEIGH ,N.C. First Citizens BancShares, Inc. (Nasdaq: FCNCA) reports earnings of $71.0 million for the year ending Dec. 31, 1998, according to Lewis R. Holding, chairman of the board. During 1997, BancShares recorded net income of $70.6 million.

Net income per share for 1998 totaled $6.62, compared to $6.22 earned per share in 1997.

Holding noted that during 1998, strong loan growth allowed net interest income to increase $23.2 million or 7.6 percent. During 1998, loans averaged $5.85 billion, compared to $5.09 billion during 1997, an increase of 15.0 percent. The significant loan growth also resulted in the establishment of additional loan loss reserves. As a result, BancShares recognized total provision for loan losses of $19.9 million during 1998, compared to $8.7 million during 1997. Net charge-offs for 1998 were $8.1 million, compared to $6.3 million during 1997. Despite the increase during 1998, net charge-offs represented only 0.14 percent of average loans outstanding, compared to 0.12 percent during 1997.

Earnings during 1998 also benefited from a $30.8 million or 26.7 percent increase in noninterest income. Contributing to this were increases in service charges on deposit accounts, credit card income and gains on the sale of mortgage loans and fees generated by First Citizens Investor Services. Noninterest expense increased $42.1 million or 14.0 percent during 1998. Personnel expenses increased $19.3 million during 1998 due to the expansion of the branch network in high-growth markets in North Carolina, Virginia, Georgia and Florida, as well as the company's in-store branch network in North Carolina. The branch expansion also contributed to the $4.8 million increase in occupancy expense and the $4.5 million increase in equipment expense.

The corporation's net income totaled $19.7 million for the quarter that ended Dec. 31, 1998, compared to $17.4 million earned during the same period in 1997, an increase of 13.5 percent. Net income per share for the fourth quarter of 1998 totaled $1.85, compared to the $1.55 earned per share during the same period in 1997.

Holding reported that net interest income during the fourth quarter increased $7.6 million or 9.9 percent, the result of continued loan growth. Noninterest income contributed an additional $10.7 million during the fourth quarter of 1998, while noninterest expenses increased $12.6 million. Gains on sales of mortgage loans and branch offices created much of the noninterest income increase during the quarter. Personnel, occupancy and equipment costs contributed to the increase in noninterest expense.

BancShares had total assets of $9.61 billion as of Dec. 31, 1998, compared to $8.95 billion as of Dec. 31, 1997, an increase of 7.3 percent.

First Citizens BancShares' lead bank, Raleigh, N.C.-based First Citizens Bank, operates more than 350 offices in 208 towns and cities in North Carolina, Virginia and West Virginia. Atlantic States Bank, a federal savings bank, operates 16 branches in Georgia and one in Florida.

CONDENSED STATEMENTS OF INCOME
(thousand, except share data; unaudited)	Three Months Ended December 31 1998	1997	Year Months Ended December 31 1998	1997
Interest Income	$158,101	$150,225	$619,487	$572,276
Interest expense	73,057	72,818	292,071	268,013
Net interest Income	85,044	77,407	327,416	304,263
Provision for loan losses	4,893	3,753	19,879	8,726
Net interest income after provision for loan losses	80,151	73,654	307,537	295,537
Noninterest Income	42,658	31,912	146,138	115,307
Noninterest expense	91,445	78,832	342,934	300,794
Income before income taxes	31,364	26,734	110,741	110,050
Income taxes	11,648	9,370	39,732	39,492
Net Income	$19,716	$17,364	$71,009	$70,558
Taxable-equivalent net interest income	$85,838	$78,327	$329,764	$306,726
Net income per share	$1.85	$1.55	$6.62	$6.22
Cash dividends per share	0.25	0.25	1.00	1.00
Profitability Information(annualized)
Return on average assets
Return on average equity	12.00	10.61	11.29	11.04
Taxable-equivalent net yield on interest-earning assets	4.05	3.89	3.98	4.05

CONDENSED BALANCE SHEETS
(thousand, except share data)	December 31 1998	December 31 1997	Change
Cash and due from banks	$502,955	$506,771	(0.75)%
Investment securities	2,160,329	2,483,294	(13.01)
Loans	6,195,591	5,445,772	13.77
Reserve for loan losses	(96,115)	(84,360)	13.93
Other assets	843,027	599,632	40.59
Total assets	$9,605,787	$8,951,109	7.31%
Deposits	$8,112,408	$7,579,567	7.03%
Other liabilities	832,630	769,902	8.15
Shareholder's equity	660,749	601,640	9.82
Total liabilities and shareholder's equity	$9,605,787	$8,951,109	7.31%
Book value per share	$62.18	$56.61	9.84%
Tangible book value per share	50.73	47.11	7.68%

SELECTED AVERAGE BALANCES
(thousand, except share data; unaudited)	Three Months Ended December 31 1998	1997	Year Ended December 31 1998	1997
Total assets	$9,315,347	$8,794,596	$9,173,020	$8,304,412
Investment securities	2,087,309	2,503,443	2,305,395	2,300,706
Loans	6,169,556	5,324,286	5,847,531	5,086,723
Interest-earning assets	8,413,436	7,994,728	8,281,072	7,569,075
Deposits	7,914,649	7,427,881	7,759,315	7,759,315
Interest-bearing liabilities	7,410,007	6,924,776	7,249,290	6,521,818
Shareholder's equity	$651,656	$649,214	$629,089	$638,825
Shares Outstanding	10,625,559	11,378,368	10,626,311	11,341,153

ASSET QUALITY
(dollars in thousand, unaudited)	December 31 1998	December 31 1997	Change
Nonaccrual loans	$12,489	$12,681	(1.51)%
Other real estate	1,529	1,462	4.58%
Total nonperforming assets	$14,018	$14,143	(0.88)
Accuring loans 90 days or more past due	$5,721	$3,953	44.73%
Nonperforming assets to gross loans plus other real estate	0.23%	0.26%
Reserve for loan losses to gross loans	1.55	1.55
Net charge-offs (year-to-date)	0.14	0.12

CAPITAL INFORMATION
(dollars in thousands, unaudited)	December 31 1998	December 31 1997	Change
Tier 1 capital	$679,987	$491,235	38.42%
Total capital	772,171	563,981	36.91
Risk-weighted assets	6,878,932	5,874,081	17.11
Tier 1 capital ratio	9.89%	8.36%
Total capital ratio	11.23	9.60
Leverage capital ratio	7.31	5.76
First Citizens BancShare, Inc. and Subsidiaries

For more information, contact:
Barbara Thompson
(919) 716-2716
First Citizens Bank