First Citizens Reports Earnings for Second Quarter 2002

July 22, 2002

RALEIGH, N.C. - First Citizens BancShares Inc. (Nasdaq: FCNCA) reports earnings for the quarter ending June 30, 2002, of $23.1 million compared to $22.0 million for the corresponding period of 2001, an increase of 5.1 percent, according to Lewis R. Holding, chairman of the board.

Per share income for the second quarter 2002 totaled $2.21 compared to $2.09 for the same period a year ago. First Citizens' results generated an annualized return on average assets of 0.79 percent for the second quarter of 2002, unchanged from the same period of 2001. The annualized return on average equity was 10.12 percent during the current quarter, compared to 10.52 percent for the same period of 2001.

During the second quarter, increases in net interest income and noninterest income exceeded the increases in noninterest expense and provision for loan losses. During the second quarter of 2002, net interest income increased $5.5 million or 6.1 percent over the same period of 2001. The increase in net interest income reflects the combined result of growth among interest-earning assets and the unfavorable impact of lower interest rates. Total interest-earning assets increased $539.1 million or 5.4 percent during the second quarter of 2002 when compared to the same period of 2001. However, the taxable-equivalent yield on interest-earning assets fell 157 basis points to 5.81 percent during the second quarter of 2002 when compared to the same period of 2001. Funding costs also decreased during the second quarter despite a $353.7 million or 4.1 percent increase in average interest-bearing liabilities. The rate on total interest-bearing liabilities fell 178 basis points to 2.43 percent during the second quarter of 2002.

Noninterest income increased 1.1 percent during the second quarter, the result of higher cardholder and merchant services revenues and service charge income, partially offset by lower mortgage income and a reduction in income from securities transactions. Noninterest expense increased $2.4 million or 2.2 percent during the second quarter of 2002, the result of higher personnel-related expenses.

The provision for loan losses increased $2.4 million or 45.0 percent from the second quarter of 2001 to the same period of 2002, the result of economic pressures and higher levels of net charge-offs and nonperforming assets. Net charge-offs were $6.0 million during the second quarter of 2002, compared to $3.4 million during the same period of 2001.

For the six-month period ending June 30, 2002, net income was $46.3 million, or $4.42 per share, compared to $44.9 million, or $4.27 per share earned during the same period of 2001. Annualized net income for 2002 represents 0.80 percent of average assets and 10.32 percent of average equity. The annualized return on average assets was 0.83 percent for the same period of 2001, while the return on average equity was 10.91 percent.

Year-to-date net interest income for 2002 increased $10.0 million or 5.4 percent over the same period of 2001. During 2002, the favorable impact of growth among interest-earning assets was partially offset by the negative impact of lower interest rates.

Noninterest income increased $2.0 million or 1.9 percent during the first six months of 2002, the result of improved service charge income, cardholder and merchant services income and commission-based income. These items were largely offset by a $7.1 million reduction in income from securities transactions during 2002. Noninterest expense increased $9.0 million or 4.3 percent during the first six months of 2002, the result of higher salary and employee benefits expenses. For the six-month period ending June 30, the provision for loan losses was $13.8 million and $11.1 million for 2002 and 2001, respectively. The increase in the provision for loan losses resulted from continued economic pressures and higher levels of net charge-offs and nonperforming assets. Net charge-offs were $10.4 million and $7.9 million during the respective six-month periods, an increase of $2.5 million or 31.5 percent during 2002.

As of June 30, 2002, First Citizens had total assets of $11.86 billion. Two of BancShares' major subsidiaries are First Citizens Bank with 345 branches in North Carolina, Virginia and West Virginia, and Atlantic States Bank with 42 branches in Georgia and Florida. Atlantic States recently announced the formation of a new division, IronStone Bank, which will serve customers in Austin, Texas, and Scottsdale, Ariz. For more information, visit the First Citizens Web site at firstcitizens.com.

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CONDENSED STATEMENTS OF INCOME
(thousand, except share data; unaudited)	Three Months Ended June 30 2002	2001	Six Months Ended June 30 2002	2001
Interest Income	$151,771	$182,660	$307,919	$371,686
Interest expense	$55,042	$91,472	$114,179	$187,915
Net interest Income	$96,729	$91,188	$193,740	$183,771
Provision for loan losses	$7,822	$5,394	$13,802	$11,070
Net interest income after provision for loan losses	$88,907	$85,794	$179,938	$172,701
Noninterest Income	$55,259	$54,641	$109,489	$107,452
Noninterest expense	$108,292	$105,922	$217,729	$208,722
Income before income taxes	$35,874	$34,513	$71,698	$71,431
Income taxes	$12,744	$12,509	$25,370	$26,568
Net Income	$23,130	$22,004	$46,328	$44,863
Taxable-equivalent net interest income	$97,074	$91,678	$194,456	$184,770
Net income per share	$2.21	$2.09	$4.42	$4.27
Cash dividends per share	0.25	0.25	0.50	0.50
Profitability Information (annualized)
Return on average assets	0.79%	0.79%	0.80%	0.83%
Return on average equity	10.12	10.52	10.32	10.91
Taxable-equivalent net yield on interest-earning assets	3.71	3.69	3.76	3.81

CONDENSED BALANCE SHEETS
(thousand, except share data; unaudited)	June 30 2002	December 31 2001	June 30 2001
Cash and due from banks	$814,540	$758,987	$709,362
Investment securities	2,464,779	2,791,296	1,987,085
Loans	7,434,662	7,196,177	7,058,069
Reserve for loan losses	(110,472)	(107,087)	(105,025)
Other assets	1,260,952	1,225,618	1,639,675
Total assets	$11,864,461	$11,864,991	$11,289,166
Deposits	$10,065,180	$9,961,605	$9,480,108
Other liabilities	872,403	1,018,343	959,761
Shareholder's equity	926,878	885,043	849,297
Total liabilities and shareholder's equity	$11,864,461	$11,864,991	$11,289,166
Book value per shared	$88.44	$84.42	$80.81
Tangible book value per share	78.43	73.78	69.65

SELECTED AVERAGE BALANCES
(thousand, except share data; unaudited)	Three Months Ended June 30 2002	2001	Nine Months Ended June 30 2002	2001
Total assets	$11,756,150	$11,128,229	$11,710,516	$10,957,311
Investment securities	2,641,898	2,042,987	2,672,816	1,949,215
Loans	7,312,384	7,139,623	7,260,359	7,120,536
Interest-earning assets	10,491,811	9,952,752	10,423,042	9,785,554
Deposits	9,934,615	9,337,298	9,856,089	9,187,715
Interest-bearing liabilities	9,075,549	8,721,873	9,074,598	8,597,297
Shareholder's equity	$916,387	$838,806	$905,432	$828,892
Shares Outstanding	10,480,527	10,511,028	10,481,091	10,516,109

ASSET QUALITY
(thousand, unaudited)	June 30 2002	December 31 2001	June 30 2001
Nonaccrual loans	$17,397	$13,983	$12,658
Other real estate	10,563	6,263	2,798
Total nonperforming assets	$27,960	$20,246	$15,456
Accuring loans 90 days or more past due	$9,945	$12,981	$7,487
Net charge-offs (year-to-date)	10,417	18,925	7,923
Nonperforming assets to gross loans plus foreclosed real estate	0.38%	0.28%	0.22%
Reserve for loan losses to gross loans	1.49	1.49	1.49
Net charge-offs to average total loans(annualized, year-to-date)	0.29	0.27	0.22

CAPITAL INFORMATION
(dollars in thousands, unaudited)	June 30 2002	December 31 2001	June 30 2001
Tier 1 capital	$1,062,303	$1,015,804	$875,582
Total capital	1,168,606	1,118,248	982,740
Risk-weighted assets	8,024,193	7,771,031	8,230,975
Tier 1 capital ratio	13.24%	13.07%	10.64%
Total capital ratio	14.56	14.39	11.94
Leverage capital ratio	9.12	8.78	7.95
First Citizens BancShare, Inc. and Subsidiaries

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