First Citizens Seeks Conversion to Financial Holding Company Status

May 23, 2000

RALEIGH, N.C. - First Citizens BancShares Inc. has filed an application with the Federal Reserve for permission to convert from a bank holding company structure to a financial holding company under the Financial Modernization Act. The conversion will allow the bank to offer its customers expanded and more convenient financial services, according to James B. Hyler Jr., vice chairman of First Citizens.

The recently enacted Gramm-Leach-Bliley Financial Modernization Act allows bank holding companies to register as financial holding companies. Companies operating under the new designation may engage in a broad range of complementary services, including insurance and securities. To date, about 240 bank holding companies have filed for the change.

"This new designation is a minor change in structure that will allow First Citizens to build stronger relationships with its customers," Hyler said. "The only change our customers will see is an expanded product line. This is a great opportunity for the company and the people and businesses we serve."

Raleigh-based First Citizens BancShares, parent of First Citizens Bank, notified the Federal Reserve on Tuesday of its intentions. Following approvals, the company plans to shift its American Guaranty Insurance Company from a subsidiary of First Citizens Bank to a direct subsidiary of the holding company. American Guaranty would then be able to expand its underwriting services to offer its customers an improved line of convenient insurance products.

To be treated as a financial holding company under the new act, bank holding companies must have satisfactory ratings under the Community Reinvestment Act and demonstrate that they are well capitalized and well managed.

As of March 31, 2000, First Citizens BancShares had assets of $9.88 billion. Two of BancShares' major subsidiaries are First Citizens Bank with 364 branches in more than 200 communities in North Carolina, Virginia and West Virginia, and Atlantic States Bank with 32 branches in North Metro Atlanta and Southwest Florida. First Citizens provides superior financial services to individual customers and small to mid-sized businesses. For more information, visit our web site.

For more information, contact:
Barbara Thompson (919) 716-2716
Noel McLaughlin (919) 716-2793
First Citizens Bank