First Citizens Reports Increased Earnings for 1999

January 24, 2000

RALEIGH, N.C. - First Citizens BancShares Inc. (Nasdaq: FCNCA) reports increased earnings for 1999, according to Lewis R. Holding, chairman of the board. The company recorded net income of $81.8 million, up 15.2 percent from the $71.0 million earned in 1998.

Net income per share during 1999 was $7.70, a 16.3 percent increase over the $6.62 per share recorded in 1998. Earnings for 1999 yielded a return on assets of 0.85 percent and a return on equity of 11.79 percent.

For the quarter that ended Dec. 31, 1999, BancShares reported net income of $19.3 million compared to $19.7 million for the corresponding period of 1998, a decrease of 2.0 percent. Per share income for the fourth quarter 1999 totaled $1.82 compared to $1.85 for the same period of 1998.

During 1999, net interest income increased $24.9 million or 7.6 percent over 1998. Holding attributed the increase in net interest income to strong loan growth. Average loans outstanding increased $551.6 million during 1999, primarily due to strong demand from commercial customers. Noninterest income increased $19.9 million or 13.7 percent during 1999, due to significant increases in service charge income, credit card income, fee income and gains from branch sales. The provision for loan losses in 1999 declined $8.2 million or 41.3 percent, the result of a reduced rate of loan growth when compared to 1998.

The increases in noninterest income were offset by a $33.4 million or 9.8 percent increase in noninterest expense. Personnel related expenses increased $21.4 million or 12.7 percent over the same period of 1998, the result of branch expansion and growth in incentive-based compensation. Branch expansion during 1999 also led to higher facility, equipment and other operating expenses.

During the fourth quarter, BancShares recorded a $3.7 million or 4.3 percent increase in net interest income compared to the same period of 1998, the result of growth in average loans, and a $1.4 million or 28.4 percent reduction in the provision for loan losses, which resulted from a slower rate of growth in loans outstanding. Noninterest income during the fourth quarter of 1999 declined $464,000 or 1.1 percent from the same period of 1998. Holding noted that the fourth quarter of 1998 included $3.1 million in gains on the sale of branch offices, while no such gains were recognized during the fourth quarter of 1999. Noninterest expenses during the fourth quarter of 1999 increased $4.7 million or 5.1 percent over the same period of 1998, the result of branch expansion.

As of Dec. 31, 1999, First Citizens BancShares had assets of $9.72 billion. Two of BancShares major subsidiaries are Raleigh, N.C.-based First Citizens Bank with 361 branches in more than 200 communities in North Carolina, Virginia and West Virginia, and Fort Myers, Fla.-based Atlantic States Bank with 32 branches in North Metro Atlanta and Southwest Florida. For more information, visit the First Citizens web site.

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