First Citizens Reports Earnings for 2002

January 27, 2003

RALEIGH, N.C. - First Citizens BancShares Inc. (Nasdaq: FCNCA) reports earnings for the quarter ending Dec. 31, 2002, of $19.3 million compared to $21.3 million for the corresponding period of 2001, a decrease of 9.3 percent, according to Lewis R. Holding, chairman of the board.

Per share income for the fourth quarter 2002 totaled $1.85 compared to $2.03 for the same period a year ago. First Citizens’ results generated an annualized return on average assets of 0.64 percent for the fourth quarter of 2002 compared to 0.72 percent for the same period of 2001. The annualized return on average equity was 8.05 percent during the current quarter compared to 9.67 percent for the same period of 2001.

Noninterest expense increased $5.6 million or 5.2 percent during the fourth quarter of 2002, when compared to the same period of 2001. The increase resulted from a $2.8 million increase in expense caused by enhancements to various post-retirement benefit plans and higher health care and pension costs, a $1.9 million increase in salary expense and a $1.4 million increase in equipment expense resulting from higher software costs. Partially offsetting these increases were a $2.3 million reduction in the amortization of goodwill and previously acquired intangibles that resulted from changes in accounting standards during 2002. Effective Jan. 1, 2002, pursuant to Statement of Financial Accounting Standards No. 142, BancShares ceased the amortization of goodwill resulting from previous entity acquisitions. As a result of the adoption of Statement of Financial Accounting Standards No. 147, BancShares retroactively reversed previously recognized 2002 amortization expense for intangibles resulting from certain branch and insurance agency acquisitions and has reclassified those intangibles as goodwill.

During the fourth quarter of 2002, noninterest income increased $1.6 million or 2.9 percent over the same period of 2001, the result of higher cardholder and merchant services income. The provision for loan losses decreased 3.9 percent during the fourth quarter. BancShares recorded a slight reduction in net interest income during the fourth quarter as the impact of lower interest rates more than offset the benefit of growth among interest-earning assets. Average loans outstanding increased $414.7 million or 5.8 percent from the fourth quarter of 2001 to 2002, while the taxable-equivalent loan yield dropped 103 basis points.

For the year ending Dec. 31, 2002, net income was $92.8 million, or $8.85 per share, compared to $86.9 million, or $8.27 per share earned during 2001. Net income for 2002 represents 0.78 percent of average assets and 10.03 percent of average equity. The return on average assets was 0.77 percent for 2001, while the return on average equity was 10.26 percent.

Net interest income for 2002 increased $13.2 million or 3.6 percent over 2001. During 2002, the favorable impact of growth among interest-earning assets was offset in part by the negative impact of lower interest rates. Average interest-earning assets increased $515.5 million or 5.1 percent during 2002 when compared to 2001. Average investment securities increased $414.1 million or 18.9 percent, while average loans increased $273.7 million or 3.9 percent.

Noninterest income increased $5.8 million or 2.7 percent during 2002, the result of improved income from service charges, cardholder and merchant services and commissions. These items were partially offset by an $8.3 million reduction in income from securities transactions during 2002 and slight reductions in ATM and mortgage income.

Noninterest expense increased $10.9 million or 2.6 percent during 2002, primarily the result of higher salary, employee benefit and equipment expenses. The increase in noninterest expense was offset in part by an $8.8 million reduction in the amortization expense related to goodwill and intangible assets.

For the year ending Dec. 31, 2002, the provision for loan losses was $26.6 million compared to $24.1 million for 2001, an increase of $2.4 million or 10.0 percent. The increase in the provision for loan losses resulted from continued economic weakness and higher levels of net charge-offs and nonperforming assets. Net charge-offs were $21.1 million during 2002 compared to $18.9 million during 2001, an increase of $2.2 million or 11.5 percent.

As of Dec. 31, 2002, First Citizens had total assets of $12.23 billion. Two of BancShares’ major subsidiaries are First Citizens Bank with 342 branches in North Carolina, Virginia and West Virginia, and Atlantic States Bank with 38 branches in Georgia and Florida. Atlantic States’ western division, IronStone Bank, recently opened its first branch in Texas and has plans for branches in Arizona and California. For more information, visit the First Citizens Web site at firstcitizens.com.

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CONDENSED STATEMENTS OF INCOME
	Three Months Ended December 31		Three Months Ended December 31
(thousand, except share data; unaudited)	2002	2001	2002	2001
Interest Income	$140,508	$167,032	$596,169	$715,427
Interest expense	47,712	74,113	214,018	364,510
Net interest Income	92,796	92,919	382,151	368,917
Provision for loan losses	7,156	7,444	26,550	24,134
Net interest income after provision for loan losses	85,640	85,475	355,601	344,783
Noninterest Income	56,618	55,014	221,389	215,555
Noninterest expense	112,496	106,912	433,447	422,597
Income before income taxes	29,762	33,577	143,543	137,741
Income taxes	10,421	12,260	50,787	50,805
Net Income	$19,341	$21,317	$92,756	$86,936
Taxable-equivalent net interest income	$93,106	$93,389	$383,494	$370,857
Net income per share	$1.85	$2.03	$8.85	$8.27
Cash dividends per share	0.25	0.25	1.00	1.00
Profitability Information (annualized)
Return on average assets	0.64%	0.72%	0.78%	0.77%
Return on average equity	8.05	9.67	10.03	10.26
Taxable-equivalent net yield on interest-earning assets	3.44	3.55	3.63	3.69

CONDENSED BALANCE SHEETS
(thousand, except share data; unaudited)	December 31 2002	December 31 2001	Change
Cash and due from banks	$811,657	$758,987	6.94%
Investment securities	2,539,236	2,791,296	- 9.03%
Loans	7,620,263	7,196,177	5.89%
Reserve for loan losses	(112,533)	(107,087)	5.09%
Other assets	1,373,267	1,225,618	12.05%
Total assets	$12,231,890	$11,864,991	3.09%
Deposits	$10,439,620	$9,961,605	4.80%
Other liabilities	824,979	1,018,343	- 18.99%
Shareholder's equity	967,291	885,043	6.29%
Total liabilities and shareholder's equity	$12,231,890	$11,864,991	3.09%
Book value per shared	$92.36	$84.42	9.41%
Tangible book value per share	81.73	73.78	10.78%

SELECTED AVERAGE BALANCES
	Three Months Ended December 31		Year Ended Decemeber 31
(thousand, except shares outstanding; unaudited)	2002	2001	2002	2001
Total assets	$12,076,262	$11,674,273	$11,843,239	$11,235,859
Investment securities	2,544,930	2,684,315	2,610,622	2,196,473
Loans	7,543,548	7,128,818	7,379,607	7,105,915
Interest-earning assets	10,771,571	10,446,364	10,553,574	10,038,074
Deposits	10,251,693	9,742,153	10,007,298	9,405,328
Interest-bearing liabilities	9,234,127	9,142,487	9,129,168	8,798,893
Shareholder's equity	$953,606	$874,801	$924,877	$847,374
Shares Outstanding	10,475,377	10,488,894	10,478,843	10,507,289

ASSET QUALITY
(thousand, unaudited)	December 31 2002	December 31 2001	Change
Nonaccrual loans	$15,521	$13,983	11.00%
Other real estate	7,330	6,263	17.04%
Total nonperforming assets	$22,851	$ 20,246	12.87%
Accuring loans 90 days or more past due	$9,566	$12,981	- 26.31%
Nonperforming assets to gross loans plus foreclosed real estate	0.30%	0.28%
Reserve for loan losses to gross loans	1.48	1.49
Net charge-offs to average total loans(annualized)	0.29	0.27

CAPITAL INFORMATION
(dollars in thousands, unaudited)	December 31 2002	December 31 2002	Change
Tier 1 capital	$1,096,537	$1,015,804	7.95%
Total capital	1,204,142	1,118,253	7.68%
Risk-weighted assets	8,123,321	7,771,031	4.53%
Tier 1 capital ratio	13.50%	13.07%
Total capital ratio	14.82	14.39
Leverage capital ratio	9.17	8.78
First Citizens BancShares, Inc. and Subsidiaries

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