First Citizens Reports Earnings for First Quarter 2004

April 26, 2004

RALEIGH, N.C. - First Citizens BancShares Inc. (Nasdaq: FCNCA) reports earnings for the quarter ending March 31, 2004, of $17.3 million compared to $18.3 million for the corresponding period of 2003, a decrease of 5.3 percent, according to Lewis R. Holding, chairman of the board.

Per share income for the first quarter 2004 totaled $1.66 compared to $1.75 for the same period a year ago. First Citizens’ current quarter results generated an annualized return on average assets of 0.56 percent and an annualized return on average equity of 6.72 percent, compared to respective returns of 0.62 percent and 7.61 percent for the same period of 2003.

The decline in net income for the first quarter resulted from higher noninterest expense and provision for loan losses, partially offset by increases in net interest and noninterest income. Noninterest expense was $118.9 million during the first quarter of 2004, an increase of $8.0 million or 7.2 percent. The continued growth and expansion of the IronStone Bank branch network significantly impacted the rate of increase in noninterest expenses. Salary expense increased $2.9 million or 6.1 percent over the same period of 2003, while occupancy expense grew $1.1 million or 10.7 percent over 2003. Other expenses increased $2.1 million or 7.3 percent as compared to the same period of 2003, due primarily to higher cardholder processing costs.

Net interest income increased $3.6 million or 4.0 percent from the same period of 2003, due to strong growth in loan demand throughout First Citizens’ markets. Gross loans increased $290.4 million or 3.5 percent during the first quarter of 2004 and $912.5 million or 11.8 percent since March 31, 2003. Average interest-earning assets increased $397.7 million or 3.7 percent from the first quarter of 2003 to the first quarter of 2004.

The taxable-equivalent yield on interest earning assets fell from 4.95 percent during the first quarter of 2003 to 4.47 percent during the first quarter of 2004, a 48 basis point reduction. The lower asset yields resulted from continued repricing of loans to current market rates. Offsetting the yield reduction, the rate on total interest-bearing liabilities fell from 1.86 percent during the first quarter of 2003 to 1.36 percent during the same period of 2004, a 50 basis point reduction. The taxable-equivalent net yield stabilized during the past two quarters due to renewed loan growth. Noninterest income was $61.5 million during the first quarter of 2004, a $5.5 million or 9.8 percent increase over the same period of 2003. The 2004 increase includes a $2.8 million increase in gains on securities transactions. Cardholder and merchant services income increased $1.7 million or 14.1 percent during 2004. Growth was also noted in service-charge and trust income.

The provision for loan losses was $7.8 million during the first quarter of 2004, an increase of $2.3 million or 41.1 percent over the same period of 2003. The higher provision for loan losses resulted from reserves established due to growth in the loan portfolio and higher net charge-offs. Net charge-offs during the first quarter of 2004 totaled $5.2 million compared to $4.7 million during the first quarter of 2003. Net charge-offs in both periods represent 0.25 percent of average loans.

As of March 31, 2004, First Citizens had total assets of $12.71 billion. Two of BancShares' major subsidiaries are First Citizens Bank with 337 branches in North Carolina, Virginia and West Virginia, and IronStone Bank with 45 branches in Florida, Georgia, Texas, 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 March 31
(thousand, except share data; unaudited)	2004	2003
Interest income	$123,694	$131,074
Interest expense	31,227	42,158
Net interest income	92,467	88,916
Provision for loan losses	7,847	5,563
Net interest income after provision for loan losses	84,620	83,353
Noninterest income	61,543	56,049
Noninterest expense	118,896	110,944
Income before income taxes	27,267	28,458
Income taxes	9,936	10,164
Net Income	$17,331	$18,294
Taxable-equivalent net interest income	$92,758	$89,200
Net income per share	$1.66	$1.75
Cash dividends per share	0.275	0.275
Profitability Information (annualized)
Return on average assets	0.56%	0.62%
Return on average equity	6.72	7.61
Taxable-equivalent net yield on interest-earning assets	3.35	3.37

CONDENSED BALANCE SHEETS
(thousand, except share data; unaudited)	March 31, 2004	December 31, 2003	March 31, 2003
Cash and due from banks	$639,658	$790,168	$753,578
Investment securities	2,150,738	2,469,447	2,362,130
Loans	8,616,987	8,326,598	7,704,492
Reserve for loan losses	(121,957)	(119,357)	(113,382)
Other assets	1,421,529	1,093,052	1,681,923
Total assets	$12,706,955	$12,559,908	$12,388,741
Deposits	$10,795,536	$10,711,332	$10,594,380
Other liabilities	864,336	819,271	810,726
Shareholder's equity	1,047,083	1,029,305	983,635
Total liabilities and shareholder's equity	$12,706,955	$12,559,908	$12,388,741
Book value per shared	$100.33	$98.63	$93.95
Tangible book value per share	89.25	87.56	83.39

SELECTED AVERAGE BALANCES
	Three Months Ended March 31
(thousand, except shares outstanding; unaudited)	2004	2003
Total assets	$12,508,227	$12,054,717
Investment securities	2,340,956	2,476,426
Loans	8,454,599	7,642,673
Interest-earning assets	11,138,812	10,741,160
Deposits	10,634,865	10,283,143
Interest-bearing liabilities	9,210,244	9,173,567
Shareholder's equity	$1,037,260	$974,900
Shares Outstanding	10,436,345	10,472,065

ASSET QUALITY
(dollars in thousands, unaudited)	March 31, 2004	December 31, 2003	March 31, 2003
Nonaccrual loans	$13,969	$18,190	$16,988
Other real estate	6,202	5,949	8,155
Total nonperforming assets	$20,171	$24,139	$25,143
Accuring loans 90 days or more past due	$16,220	$11,492	$7,349
Nonperforming assets to gross loans plus other real estate	0.23%	0.29%	0.33%
Reserve for loan losses to gross loans	1.42	1.43	1.47
Net charge-offs to average total loans(annualized)	0.25	0.23	0.25

CAPITAL INFORMATION
(dollars in thousands, unaudited)	March 31, 2004	December 31, 2003	March 31, 2003
Tier 1 capital	$1,167,526	$1,152,309	$1,112,607
Total capital	1,292,265	1,273,657	1,222,490
Risk-weighted assets	9,257,813	8,951,402	8,275,456
Tier 1 capital ratio	12.61%	12.87%	13.44%
Total capital ratio	13.96	14.23	14.77
Leverage capital ratio	9.42	9.34	9.30
First Citizens BancShares, Inc. and Subsidiaries

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