Business Context and Reporting Period
Company: First Citizens BancShares, Inc. (Delaware)
Reporting Period: Fiscal year ended December 31, 1998
Business Overview: The Registrant is a bank holding company whose principal subsidiary is First-Citizens Bank & Trust Company, the fifth largest commercial bank in North Carolina by deposits. Operations span North Carolina, Virginia, and West Virginia with 354 offices. The company also operates Atlantic States Bank, a federally-chartered thrift with 20 offices in Georgia and Florida. Growth has been driven by acquisitions and de novo branching under the leadership of the R.P. Holding family.
Key Financial Metrics
Balance Sheet Position (as of Dec 31, 1998):
- Consolidated Assets: $9.61 billion
- Consolidated Deposits: $8.11 billion
- Shareholders' Equity: $660.7 million
Market Data (as of March 22, 1999):
- Aggregate Market Value (Non-affiliates): $419,240,120
- Outstanding Shares: 8,900,114 Class A; 1,720,460 Class B
- Dividend: $0.25 per share declared Jan 25, 1999
Other Metrics:
- Employees: 4,921 total (4,046 full-time, 875 part-time)
- Atlantic States Bank Assets: $283.1 million
Note: Specific revenue, net income, cash flow, and margin figures are referenced in the 1998 Annual Report (Tables 1, 6, and 17) but are not explicitly stated in the provided text.
Material Changes and Operational Updates
- Expansion: Atlantic States Bank continued opening branches in suburban Atlanta and opened its first office in Fort Myers, Florida, with plans to expand in southwestern Florida.
- Merger Activity: The text notes a planned merger between the West Virginia and North Carolina chartered banks of First-Citizens Bank & Trust Company scheduled for October 16, 1999.
- Regulatory Environment: Operations are subject to the Interstate Banking Law, allowing cross-state mergers and branching subject to concentration and capital requirements.
Outlook, Risks, and Contingencies
Management Commentary & Outlook:
- Management expects comparable cash dividends to continue, contingent upon satisfactory earnings and future capital needs.
- Atlantic States Bank plans to expand its presence in the Fort Myers, Florida area.
Risks and Legal Proceedings:
- Legal Actions: The company and its subsidiaries are defendants in various legal actions arising from normal business activities. Management believes any ultimate liability will not have a material effect on the consolidated financial position.
- Dividend Restrictions: Legal restrictions exist regarding the ability of the Bank subsidiary to transfer funds to BancShares via cash dividends or loans.
- Regulatory Risk: Subject to jurisdiction of the Federal Reserve, FDIC, and state banking authorities.
Investor Verification Checklist
- Financial Performance: Verify specific revenue, net income, and return on equity figures in the referenced 1998 Annual Report (pages 18-37), as they are not detailed in this filing text.
- Executive Compensation: Review the amended "Employee Death Benefit and Post-Retirement Non-Competition and Consultation Agreements" (Exhibits 10.1 through 10.5) filed in October 1998, which significantly increased death benefits and non-competition payments for key executives (e.g., Lewis R. Holding, Frank B. Holding, James B. Hyler, Jr.).
- Merger Status: Confirm the completion and financial impact of the October 1999 merger between the West Virginia and North Carolina banking subsidiaries.
- Capital Adequacy: Review the "Financial Summary and Selected Average Balances and Ratios" (Table 1) to assess capital ratios against regulatory requirements.