FIRST CITIZENS BANCSHARES INC /DE/ (Form: 8-K, Received: 10/30/2019 09:47:07)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 30, 2019

_________________________________________________________________

First Citizens BancShares Inc /DE/

(Exact name of registrant as specified in its charter)



Delaware	001-16715	56-1528994
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)



4300 Six Forks Road	Raleigh	North Carolina	27609
(Address of principal executive offices)			(Zip Code)

Registrant's telephone number, including area code: (919) 716-7000

________________________________________________________________________________

(Former name or former address, if changed since last report)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities Registered Pursuant to Section 12(b) of the Securities Exchange Act of 1934:



Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, Par Value $1	FCNCA	Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On October 29, 2019, the Board of Directors of First Citizens BancShares, Inc. (“BancShares”) adopted, effective January 1, 2019, an amended and restated First-Citizens Bank & Trust Company Long-Term Incentive Plan (the “Amended LTIP”). The Amended LTIP amends and restates in its entirety the prior Long-Term Incentive Plan, previously approved by the shareholders on April 29, 2014 (the “Prior Plan”), which was described in a Form 8-K filed by BancShares on May 2, 2014. The Amended LTIP continues to provide for the granting of awards in the form of cash bonuses, which may be paid to salaried employees of BancShares’ wholly-owned subsidiary, First-Citizens Bank & Trust Company (“FCB”), including employees who serve as officers of BancShares, based upon attainment of pre-established, objective performance goals.

The Amended LTIP amends the Prior Plan to, among other matters:


•	remove certain terms, conditions, definitions and requirements relating to the qualified performance-based exception to Section 162(m) of the Internal Revenue Code of 1986, as amended, which was repealed by 2017 tax reform legislation;


•	increase the maximum amount of awards that may be paid under the Amended LTIP to any one participant in any one fiscal year to $7,000,000; and


•	include a provision expressly indicating that awards paid to participants are subject to the provisions of any existing clawback policy, including, without limitation, FCB’s Incentive Compensation Policy.

The foregoing description of the Amended LTIP and its changes does not purport to be complete and is qualified in its entirety by the full text of the Amended LTIP, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

On October 29, 2019, Registrant announced its results of operations for the quarter ended September 30, 2019. A copy of Registrant's press release issued this date is attached as Exhibit 99.1 to this Report and is incorporated by reference into this Report.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits. The following exhibit accompanies this report.



Exhibit No.		Description

10.1		Long-Term Incentive Plan, as amended and restated by the Board of Directors on October 29, 2019

99.1		October 29, 2019 Press Release

Disclosures About Forward Looking Statements

This Current Report on Form 8-K (this “Report”) may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. For the purposes of these discussions, any statements that are not statements of historical fact may be deemed to be forward looking statements. Such statements are often characterized by the use of qualifying words such as “expects,” “anticipates,” “believes,” “estimates,” “plans,” “projects,” or other statements concerning opinions or judgments of BancShares and its management about future events. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those described in the statements. Forward-looking statements in this Report include statements regarding BancShares’ expectations regarding the benefits of the Merger, other statements concerning opinions or judgments of BancShares and its management about future events, future financial and operating results and the respective plans, objectives, and intentions, the benefits to FCB of the Merger, and when the Merger will be completed. The accuracy of such forward-looking statements could be affected by factors beyond BancShares’ control, including, but not limited to, the failure to obtain or delays in the receipt of regulatory approvals that must be received before the Merger may be completed, the failure to obtain or delays in the satisfaction or waiver of other conditions to the consummation of the Merger, uncertainties as to the Merger, the risk the Merger may not be completed in a timely manner or at all, the risk that the cost savings and any revenue synergies from the Merger may not be realized or take longer than anticipated to be realized, disruption from the Merger with customer, supplier, or employee relationships, the occurrence of any event, change, or other circumstances that could give rise to the termination of the merger agreement, the possibility that the amount of the costs, fees, expenses, and charges related to the Merger may be greater than anticipated, including as a result of unexpected or unknown factors, events, or liabilities, the risk of potential litigation or regulatory action related to the Merger, general competitive, economic, political, and market conditions, and difficulties experienced in the integration of the businesses of Entegra and FCB. These forward-looking statements are made only as of the date of this Report, and BancShares undertakes no obligation to revise or update these statements following the date of this Report, except as may be required by law.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



		First Citizens BancShares, Inc.
		(Registrant)


Date:	October 30, 2019	By: /s/ Craig L. Nix
		Craig L. Nix
		Chief Financial Officer

FIRST-CITIZENS BANK & TRUST COMPANY

LONG-TERM INCENTIVE PLAN

(As amended and restated by the Board of Directors on October 29, 2019)


1.	Purpose

The purpose of the First-Citizens Bank & Trust Company Long-Term Incentive Plan (the “Plan”), is to provide selected salaried employees of First-Citizens Bank & Trust Company or an affiliate thereof (collectively, the “Company” unless the context otherwise requires) with the opportunity to earn awards (“awards”) in the form of cash bonuses based upon attainment of preestablished, objective performance goals, thereby promoting a closer identification of the participating employees’ interests with the interests of the Company and its shareholders, and further stimulating such employees’ efforts to enhance the efficiency, profitability, growth and value of the Company.


2.	Plan Administration

The Plan shall be administered by the Compensation, Nominations and Governance Committee (the “Committee”), or a subcommittee of the Committee, of the Board of Directors (the “Board”) of First Citizens BancShares, Inc. (“BancShares”) and First-Citizens Bank & Trust Company. In addition to action by meeting in accordance with applicable laws, any action of the Committee with respect to the Plan may be taken by a written instrument signed by all of the members of the Committee, and any such action so taken by written consent shall be as fully effective as if it had been taken by a majority of the members at a meeting duly held and called. Subject to the terms of the Plan, the Committee shall have full authority in its discretion to take any action with respect to the Plan, including, but not limited to, the authority to (i) determine all matters relating to awards, including selection of individuals to be granted awards and all terms, conditions, restrictions and limitations of an award; and (ii) construe and interpret the Plan and any instruments evidencing awards granted under the Plan, to establish and interpret rules and regulations for administering the Plan and to make all other determinations deemed necessary or advisable for administering the Plan. The Committee’s authority to grant awards and authorize payments under the Plan shall not in any way restrict the authority of the Committee to grant compensation to employees under any other compensation plan or program of the Company. The Committee also shall have the authority and discretion to establish terms and conditions of awards (including but not limited to the establishment of subplans) as the Committee determines to be necessary or appropriate to conform to the applicable requirements or practices of jurisdictions outside of the United States. Any decision made, or action taken, by the Committee in connection with the administration of the Plan shall be final, binding and conclusive. Notwithstanding the foregoing, the Committee may delegate the administration of the Plan to one or more of its designees (subject to any conditions imposed by the Committee), but only as may otherwise be permitted under applicable laws, rules or regulations. In the case of any such delegation, references to the “Committee” herein shall include such designee or designees, unless the context otherwise requires. No member of the Board or the Committee shall be liable for any action, determination or decision made in good faith with respect to the Plan or any award paid under it. The members of the Board and the Committee shall be entitled to indemnification and reimbursement in the manner and to the fullest extent provided in the Company’s articles of incorporation or by law.


3.	Eligibility

The participants in the Plan (individually, a “participant,” and collectively, the “participants”) shall be those salaried employees of the Company and its affiliates who are designated from time to time as participants by the Committee. Eligible participants shall be selected to participate on an annual or other periodic basis as determined by the Committee. Participation in the Plan for any one performance period does not guarantee that an employee will be selected to participate in any other performance period. For the purposes of the Plan, “performance period” shall mean a period established by the Committee during which performance shall be measured to determine if any payment will be made under the Plan. A performance period may be coincident with one or more fiscal years of the Company, or any portion thereof, and performance periods may be overlapping. An “affiliate” of the Company shall mean any company (or other entity) controlled by, controlling or under common control with the Company, including BancShares.


4.	Nature of Awards

Awards granted under the Plan shall be in the form of cash bonuses.


5.	Awards

(a) Grant of Awards: At the time performance objectives are established for a performance period as provided in Section 5(b) herein, the Committee also shall assign to each participant a target cash bonus award applicable for the particular performance period (each, a “target bonus”). A participant’s award, if any, shall be earned based on the attainment of written performance objectives approved by the Committee for a specified performance period, as provided in Section 5(b) herein. Such performance objectives shall be established by the Committee no more than 90 days after the commencement of the performance period to which the performance objective relates and before 25% of the relevant performance period has elapsed. During any fiscal year of the Company, no participant may be paid more than the maximum award limitation stated in Section 5(d) herein. The Committee may adjust awards as appropriate for partial achievement of goals, exemplary effort on the part of a participant and/or other external, extraordinary or mitigating circumstances and may also interpret and make necessary and appropriate adjustments to performance goals and the manner in which such performance goals are evaluated.

(b) Performance Objectives: For each performance period, the Committee shall establish one or more specific performance measures and specific goals for each participant and/or for each group of participants. The performance objectives established by the Committee shall be based on one or more performance measures that apply to the individual participant (“individual performance”), business unit/function performance (“business unit/function performance”), the Company as a whole (“corporate performance”), or any combination of individual performance, business unit/function performance or corporate performance. Without limiting the foregoing, performance goals for business unit/function performance may be set for an identifiable business group, segment, unit, affiliate, facility, product line, product or function. If a participant’s performance goals are based on a combination of individual performance, business unit/function performance and/or corporate performance, the Committee may weight the importance of each type of performance that applies to such participant by assigning a percentage to it. The Committee may approve performance objectives that are objective and based upon one or more of the following criteria, as determined by the Committee: (i) revenues or sales; (ii) gross margins; (iii) earnings per share; (iv) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation and amortization); (v) net income; (vi) operating income; (vii) book value per share, including tangible book value per share; (viii) dividends per share; (ix) return on shareholders’ equity; (x) return on investment; (xi) return on capital; (xii) improvements in capital structure; (xiii) expense management; (xiv) operating margins; (xv) maintenance or improvement of gross margins or operating margins; (xvi) stock price or total shareholder return; (xvii) market share; (xviii) profitability; (xix) costs; (xx) cash flow or free cash flow; (xxi) working capital; (xxii) return on assets; (xxiii) economic wealth created, and/or (xxiv)

strategic business criteria, based on meeting specified goals or objectives related to market penetration, geographic business expansion, cost targets, customer satisfaction, employee satisfaction, management of employment practices and employee benefits, management of litigation, management of information technology, goals relating to acquisitions or divestitures of product lines, subsidiaries, affiliates or joint ventures, quality matrices, customer service matrices and/or execution of pre-approved corporate strategy. In addition, the Committee may approve performance objectives based on other criteria, which may or may not be objective. The foregoing criteria may relate to the Company, one or more of its affiliates or one or more of its divisions, units, partnerships, joint venturers or minority investments, facilities, product lines or products or any combination of the foregoing. The targeted level or levels of performance with respect to such business criteria may be established at such levels and on such terms as the Committee may determine, in its discretion, including but not limited to on an absolute basis, in relation to performance in a prior performance period, and/or relative to one or more peer group companies or indices, or any combination thereof. In addition, the performance objectives may be calculated without regard to extraordinary items.

(c) Earning of Awards: As soon as practicable after the end of the performance period, the Committee shall determine whether the performance goals for the performance period were achieved and, if so, at what level of achievement under specific formulae established for the performance period. If the performance goals were met for the performance period, the Committee shall determine the percentage, if any, of the award (which may exceed 100%) earned by each participant and such award shall be paid in accordance with Section 5(e) herein (subject, however, to the limitation on awards stated in Section 5(d) herein).

(d) Maximum Award Payable to Any One Participant: Other provisions of the Plan notwithstanding, the maximum amount of cash bonus awards that may be paid under the Plan to any one participant in any one fiscal year shall not exceed $7,000,000.

(e) Payment of Awards: An award earned by a participant with respect to a performance period shall be paid to him following the determination of the amount, if any, of the award. Without limiting the foregoing, awards payable under the Plan shall be paid no later than 90 days following the last day of the performance period with respect to the award. The Committee shall have the unilateral discretion to reduce or eliminate the amount of an award granted to any participant, including an award otherwise earned and payable pursuant to the terms of the Plan.

(f) Forfeiture and Clawback Provisions: Awards paid to participants shall be subject to the provisions of any clawback policy implemented by the Company, including, without limitation, the Company’s Incentive Compensation Policy.


6.	Termination of Employment and Other Events; Covenants

The Committee shall specify the circumstances in which awards shall be paid or forfeited in the event of termination of employment by the participant or other event prior to the end of a performance period or prior to payment of such awards. Unless otherwise determined by the Committee, if a participant dies, retires, becomes disabled, is assigned to a different position, is granted a leave of absence, or if the participant’s employment is otherwise terminated (except for cause) by the Company during a performance period, a pro rata share of the participant’s award based on the period of actual participation may, at the Committee’s discretion, be paid to the participant after the end of the performance period if and to the extent that it would have become earned and payable had the participant’s employment status not changed. The Committee may require a participant, as a condition to the grant or payment of an award, to enter or have entered into agreements or covenants with the Company obligating the participant to not compete, to not interfere with the relationships of the Company with customers, suppliers or employees in any way, to refrain from disclosing or misusing confidential or proprietary information of the Company, and to take or refrain from taking such other actions adverse to the Company as the Committee may specify. The form of such agreements or

covenants shall be specified by the Committee, which may vary such form from time to time and require renewal of the agreements or covenants, as then specified by the Committee, in connection with the allocation or payout of any award.


7.	No Right to Employment

Nothing contained in this Plan or any action taken pursuant to the Plan shall be construed as conferring upon any participant the right or imposing upon him the obligation to continue in the employment of or service to the Company, nor shall it be construed as imposing upon the Company the obligation to continue the employment or service of a participant. Except as may be otherwise provided in the Plan or determined by the Committee, all rights of a participant with respect to an award and distribution of any cash payment subject to an award shall terminate and be forfeited upon a participant’s termination of employment or service with the Company.


8.	Amendment and Termination

The Board may amend, discontinue or terminate the Plan in whole or in part at any time, provided that (a) approval of an amendment to the Plan by the shareholders of the Company shall be required to the extent, if any, that shareholder approval of such amendment is required by applicable laws, rules or regulations; and (b) except as otherwise provided in Section 5(e), no such amendment, discontinuance or termination of the Plan shall adversely affect any award earned and payable under the Plan as of the date of such amendment or termination without the participant’s consent. However, notwithstanding the foregoing, the Committee shall have unilateral authority to amend the Plan and any award (without participant consent) to the extent necessary to comply with applicable laws, rules or regulations or changes to applicable laws, rules or regulations (including Code Section 409A, related regulations and other guidance), and to reduce or eliminate the amount of an award, as provided in Section 5(e).


9.	Effective Date

The Plan, which was first effective as of January 1, 2014, was amended and restated by the Board on October 29, 2019, effective as of January 1, 2019.


10.	Miscellaneous

(a) Taxes; Offset: Any tax required to be withheld by any government authority shall be deducted from each award. The Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for the participant or any other person. Participants are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with awards (including any taxes arising under Code Section 409A), and the Company shall not have any obligation to indemnify or otherwise hold any participant harmless from any or all of such taxes. The Committee, in its sole discretion (but subject to applicable law), may apply any amounts payable to any participant hereunder as a setoff to satisfy any liabilities owed to the Company by the participant.

(b) Nonassignability: Unless the Committee determines otherwise, awards and any other rights under the Plan shall not be subject to anticipation, alienation, pledge, transfer or assignment by any person entitled thereto, except by designation of a beneficiary or by will or the laws of intestate succession.

(c) No Trust; Unfunded Plan: The obligation of the Company to make payments hereunder shall constitute a liability of the Company to the participants. Such payments shall be made from the general funds of the Company, and the Company shall not be required to establish or maintain any special or separate fund, or otherwise to segregate assets to assure that such payments shall be made, and neither the participants nor their beneficiaries shall have any interest in any particular assets of the Company by reason of its obligations hereunder. Nothing contained in this Plan shall create or be construed as creating a trust of any kind or any other fiduciary relationship between the Company and the participants or any other person or constitute a guarantee that the assets of the Company shall be sufficient to pay any benefits to any person. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company.

(d) Impact of Plan Award on other Plans: Awards granted pursuant to the Plan shall not be treated as compensation for purposes of any other compensation or benefit plan, program or arrangement of the Company, unless either (i) such other plan, program or arrangement provides that compensation in the form of awards payable under the Plan are to be considered as compensation thereunder, or (ii) the Committee so determines. The adoption of the Plan shall not affect any other incentive or other compensation plans or programs in effect for the Company, nor shall the Plan preclude the Company from establishing any other forms of incentive or other compensation for employees of the Company.

(e) Facility of Payments: If a participant or any other person entitled to receive an award under this Plan (the “recipient”) shall, at the time payment of any such amount is due, be incapacitated so that such recipient cannot legally receive or acknowledge receipt of the payment, then the Committee, in its sole and absolute discretion, may direct that the payment be made to the legal guardian, attorney-in-fact or person with whom such recipient is residing, and such payment shall be in full satisfaction of the Company’s obligation under the Plan with respect to such amount.

(f) Beneficiary Designation: The Committee may permit a participant to designate in writing a person or persons as beneficiary, which beneficiary shall be entitled to receive settlement of awards, if any, to which the participant is otherwise entitled in the event of death. In the absence of such designation by a participant, and in the event of the participant’s death, the estate of the participant shall be treated as beneficiary for purposes of the Plan, unless the Committee determines otherwise. The Committee shall have sole discretion to approve and interpret the form or forms of such beneficiary designation.

(g) Governing Law: The Plan shall be construed and its provisions enforced and administered in accordance with the laws of the State of North Carolina, without regard to the principles of conflicts of laws, and in accordance with applicable federal laws.

(h) Adjustments: The Committee is authorized at any time during or after the completion of a performance period, in its sole discretion, to adjust or modify the terms of awards or performance objectives, or specify new awards, (i) in the event of any large, special and non-recurring dividend or distribution, recapitalization, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, forward or reverse split, stock dividend, liquidation, dissolution or other similar corporate transaction, (ii) in recognition of any other unusual or nonrecurring event affecting the Company or the financial statements of the Company (including events described in (i) above as well as acquisitions and dispositions of businesses and assets and extraordinary items determined under U.S. Generally Accepted Accounting Principles (“GAAP”), or (iii) in response to changes in applicable laws and regulations, accounting principles, and tax rates (and interpretations thereof) or changes in business conditions or the Committee’s assessment of the business strategy of the Company.

(i) Compliance with Code Section 409A: Notwithstanding any other provision in the Plan or an award to the contrary, if and to the extent that Code Section 409A is deemed to apply to the Plan or any award granted under the Plan, it is the general intention of the Company that the Plan and any such award shall, to the extent practicable, be construed in accordance therewith. Deferrals pursuant to an award otherwise exempt from Code Section 409A in a manner that would cause Code Section 409A to apply shall not be permitted unless such deferrals are in compliance with or exempt from Code Section 409A. Without in any way limiting the effect of the foregoing, (i) in the event that Code Section 409A requires that any special terms, provision or conditions be included in the Plan or any award, then such terms, provisions and conditions shall, to the extent practicable, be deemed to be made a part of the Plan and/or award, as applicable, and (ii) terms used in the Plan or an award shall be construed in accordance with Code Section 409A if and to the extent required. Further, in the event that the Plan or any award shall be deemed not to comply with Code Section 409A, then neither the Company, the Board, the Committee nor its or their designees or agents shall be liable to any participant or other persons for actions, decisions or determinations made in good faith. In addition:

(i) To the extent required by Section 409A of the Code, and notwithstanding any other provision of this Plan to the contrary, no payment of Non-Qualified Deferred Compensation (as such term is defined under Section 409A of the Code and the regulations promulgated thereunder) will be provided to, or with respect to, the participant on account of his separation from service until the first to occur of (i) the date of the participant’s death or (ii) the date which is one day after the six (6) month anniversary of his separation from service, but in either case only if he is a “specified employee” (as defined under Section 409A(a)(2)(B)(i) of the Code and the regulations promulgated thereunder) in the year of his separation from service. Any payment that is delayed pursuant to the provisions of the immediately preceding sentence shall instead be paid in a lump sum promptly following the first to occur of the two dates specified in such immediately preceding sentence.

(ii) Any payment of Non-Qualified Deferred Compensation made pursuant to a voluntary or involuntary termination of the Participant’s employment with the Corporation shall be withheld until the Participant incurs both (i) a termination of his employment relationship with the Corporation and all of the Affiliates and (ii) a “separation from service” with the Corporation and all of the Affiliates, as such term is defined in Treas. Reg. Section 1.409A-1(h).

(iii) To the extent the Plan provides that Non-Qualified Deferred Compensation can be paid, at the discretion of the Committee, during a certain period following a permissible payment event or trigger, and if the payment period spans two taxable years of a participant, then such Non-Qualified Deferred Compensation shall be paid during the second of such taxable years (but not later than the 15th day of the third calendar month of such year).

(j) Restrictions on Awards: Notwithstanding any other Plan provision to the contrary, the Company shall not be obligated to make any distribution of benefits under the Plan or take any other action, unless such distribution or action is in compliance with applicable laws, rules and regulations (including but not limited to applicable requirements of the Code).

(k) Gender and Number: Where the context admits, words in any gender shall include any other gender, words in the singular shall include the plural and words in the plural shall include the singular.

(l) Severability: If any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

(m) Binding Effect: The Plan shall be binding upon the Company, its successors and assigns, and participants, their legal representatives, executors, administrators and beneficiaries.

This First-Citizens Bank & Trust Company Long-Term Incentive Plan, as amended and restated effective January 1, 2019, has been executed on behalf of the Company on the 29th day of October, 2019.

FIRST-CITIZENS BANK & TRUST COMPANY

By: _____________________

Frank B. Holding, Jr.

Chief Executive Officer

ATTEST:

_____________________

Bridget L. Welborn

Secretary

[Corporate Seal]



	NEWS RELEASE




For Immediate Release	Contact:	Barbara Thompson
October 29, 2019		First Citizens BancShares
		919.716.2716

FIRST CITIZENS BANCSHARES REPORTS EARNINGS FOR THIRD QUARTER 2019

RALEIGH, N.C. -- First Citizens BancShares Inc. (BancShares) (Nasdaq: FCNCA) reported strong earnings for the third quarter of 2019, according to Frank B. Holding, Jr., Chairman of the Board. Key results for the quarter ended September 30, 2019, are presented below:



THIRD QUARTER RESULTS

Q3 2019	Q3 2018	Q3 2019	Q3 2018	Q3 2019	Q3 2018	Q3 2019	Q3 2018
$124.8	$117.3	$11.27	$9.80	1.32%	1.33%	13.83%	13.41%
Net income (in millions)		Net income per share		Return on average assets		Return on average equity

YEAR-TO-DATE (YTD) RESULTS

YTD 2019	YTD 2018	YTD 2019	YTD 2018	YTD 2019	YTD 2018	YTD 2019	YTD 2018
$355.5	$310.8	$31.50	$25.91	1.29%	1.20%	13.41%	12.22%
Net income (in millions)		Net income per share		Return on average assets		Return on average equity



THIRD QUARTER HIGHLIGHTS

Net income	Net income for the third quarter of 2019 totaled $124.8 million, an increase of $7.5 million, or 6.4% compared to the same quarter in 2018. Net income per share increased $1.47, or 15.0%, to $11.27 in the third quarter of 2019, from $9.80 per share during the same quarter in 2018.

Return on average assets and equity	Return on average assets for the third quarter of 2019 was 1.32%, essentially unchanged from the same quarter in 2018. Return on average equity for the third quarter of 2019 was 13.83%, an improvement of 42 basis points over the same period of 2018.

Net interest income and net interest margin	BancShares reported total net interest income of $336.4 million for the third quarter of 2019, an increase of $29.1 million, or 9.5% compared to the same quarter in 2018. The taxable-equivalent net interest margin (NIM) was 3.80% for the third quarter of 2019, up 7 basis points from 3.73% during the same quarter in 2018.

Operating performance	Noninterest income totaled $100.9 million for the third quarter of 2019, compared to $94.5 million for the same quarter of 2018. Noninterest expense was $270.4 million for the third quarter of 2019, compared to $267.5 million during the same quarter of 2018.

Loans and credit quality	Total loans grew to $27.20 billion, an increase of $0.47 billion, or an annualized increase of 7.0% since June 30, 2019. Total loans grew by $2.31 billion, or 9.3% since September 30, 2018. The net charge-off ratio was 0.10% for the third quarter of 2019, consistent with the same quarter in 2018.

Deposits	Total deposits grew to $32.74 billion, an increase of $0.02 billion, or by 0.3% since June 30, 2019. Total deposits grew by $2.58 billion, or 8.6% since September 30, 2018.

Capital	BancShares repurchased 295,900 shares of its Class A common stock during the third quarter of 2019 totaling approximately $135.4 million. At September 30, 2019, BancShares remained well capitalized with a total risk-based capital ratio of 13.1%, a Tier 1 risk-based capital ratio and common equity Tier 1 ratio of 11.8%, and a leverage ratio of 9.2%.

RECENT MERGER ACTIVITY

On September 24, 2019, BancShares’ bank subsidiary, First-Citizens Bank & Trust Company (First Citizens Bank), entered into a definitive merger agreement for the acquisition of Duluth, Georgia-based Community Financial and its bank subsidiary, Gwinnett Community Bank. The agreement has been unanimously approved by the boards of directors of both companies. Under the terms of the agreement, cash consideration of $2.3 million will be paid to the shareholders of Community Financial. The transaction is anticipated to close during the first quarter of 2020, subject to the receipt of regulatory approvals, approval of the Community Financial shareholders and the satisfaction of other customary closing conditions. As of June 30, 2019, Community Financial reported $223 million in consolidated assets, $146 million in loans and $206 million in deposits.

NET INTEREST INCOME

Net interest income for third quarter of 2019 totaled $336.4 million, an increase of $29.1 million, or 9.5%, compared to the third quarter of 2018. The taxable-equivalent NIM was 3.80% in the third quarter of 2019, an increase of 7 basis points from 3.73% for the same quarter in the prior year. The primary drivers of the income and margin growth were a $42.8 million increase in interest and fees on loans due to a rise in average loans outstanding, along with a 26 basis point increase in the loan yield. This growth was partially offset by an increase of $16.6 million in deposit interest expense, driven by a 33 basis point increase in deposit rates, primarily due to time deposits and money markets as well as an increase in the average deposits outstanding.

Net interest income for the nine months ended September 30, 2019, totaled $984.2 million, an increase of $96.2 million, or 10.8%, compared to the same period of 2018. The taxable-equivalent NIM was 3.83% for the nine months ended September 30, 2019, an increase of 18 basis points from 3.65% for the same period in the prior year. Similar to the discussion above, the primary driver of the growth was an increase in interest income on loans, partially offset by increased interest expense on deposits. Interest and fees on loans grew $123.8 million due to a rise in average loans outstanding and a 27 basis point increase in the loan yield. This growth was partially offset by a $40.4 million increase in interest expense on deposits due to interest-bearing deposit balance growth coupled with a 27 basis point increase in deposit rates, largely due to time deposits and money markets.

Although net interest margin has expanded in recent periods, management does not believe this trend will continue as new loan yields are declining due to changes in forward rate expectations and increased competition. This trend will likely result in margin compression for the remainder of 2019 and 2020.

PROVISION FOR LOAN AND LEASE LOSSES

BancShares recorded net provision expense of $6.8 million and $23.7 million for the three and nine months ended September 30, 2019, respectively, as compared to $0.8 million and $16.9 million, respectively, for the same periods in 2018. The fluctuations in provision expense are primarily due to methodology enhancements made to the allowance calculation in the third quarter of 2018 which resulted in reductions to provision expense for 2018, as well as differences in loan growth and portfolio credit quality. The net charge-off ratio was 0.10% for the three and nine months ended September 30, 2019, compared to 0.10% for the three months ended September 30, 2018, and 0.11% for the nine months ended September 30, 2018.

NONINTEREST INCOME

Noninterest income for the third quarter of 2019 totaled $100.9 million, an increase of $6.4 million compared to the third quarter of 2018. Noninterest income, excluding gains on extinguishment of debt, realized gains on debt securities sales and fair value adjustments on marketable equity securities, was $100.8 million for three months ended September 30, 2019, compared to $90.0 million for the same period in 2018. The $10.8 million increase was primarily driven by an increase in other income of $3.6 million due largely to recoveries on acquired loans, a $3.3 million increase in mortgage income, and modest increases in cardholder services income and service charges on deposit accounts.

Noninterest income for the first nine months of 2019 totaled $311.5 million, a decrease of $6.7 million compared to the same period of 2018. Noninterest income, excluding gains on extinguishment of debt, realized gains on debt securities sales and fair value adjustments on marketable equity securities, totaled $291.1 million for the nine months ended September 30, 2019, compared to $282.4 million for the same period in 2018. This increase was driven primarily by a $6.7 million increase in cardholder services largely as a result of increased transaction volume, along with a $3.1 million increase in mortgage income.

NONINTEREST EXPENSE

Noninterest expense totaled $270.4 million for the third quarter of 2019, a $2.9 million increase compared to the same period in 2018. The increase was largely driven by a $4.0 million increase in personnel-related expenses primarily due to increased salaries and wages as a result of merit increases and personnel additions from acquisitions, a $2.9 million increase in equipment expenses and a $2.8 million increase in merger-related expenses due to recent acquisition activity. Offsetting these increases were a $2.7 million reduction in FDIC insurance expense as the large bank surcharge was eliminated in the fourth quarter of 2018 and a $3.8 million decline in other expenses driven primarily by recoveries of previously recorded legal fees.

Noninterest expense totaled $811.5 million for the first nine months of 2019, a $9.9 million increase compared to the same period of 2018. The increase was largely driven by a $13.9 million increase in salaries and wages as a result of merit increases and increased headcount from acquisitions, a $8.0 million increase in equipment expenses and a $5.6 million increase in merger-related expenses due to recent acquisition activity. Offsetting these increases were a $8.6 million reduction in FDIC insurance expense, a $6.5 million decline in other expenses driven by legal fees, and a $2.7 million decrease in collection and foreclosure-related expenses.

INCOME TAXES

Income tax expense totaled $35.4 million and $16.2 million for the third quarter of 2019 and 2018, respectively, representing effective tax rates of 22.1% and 12.1% for the respective periods. The effective tax rate for the third quarter of 2019 was impacted by the 2018 tax return true-ups, while the effective rate decrease for the third quarter of the prior year was primarily due to the recognition of a tax benefit resulting from the Tax Act.

Income tax expense totaled $105.0 million and $76.8 million for the first nine months of 2019 and 2018, respectively, representing effective tax rates of 22.8% and 19.8% for the respective nine month periods. Factors impacting the year-to-date effective tax rate are the same as those noted above.

LOANS AND DEPOSITS

At September 30, 2019, loans totaled $27.20 billion, an increase of $0.47 billion, or an annualized increase of 7.0% since June 30, 2019. The loan growth was primarily focused in the commercial portfolios. Total loans have increased $1.67 billion since December 31, 2018, largely due to acquisitions in the second quarter of 2019. Excluding acquired loans of $1.02 billion, total loans increased $0.66 billion since December 31, 2018, or by 3.4% on an annualized basis.

At September 30, 2019, deposits totaled $32.74 billion, an increase of $0.02 billion, or an annualized increase of 0.3% since June 30, 2019. Total deposits have increased $2.07 billion since December 31, 2018. Excluding acquired deposits of $1.02 billion, total deposits increased $1.05 billion since December 31, 2018, or by 4.6% on an annualized basis.

ALLOWANCE FOR LOAN AND LEASE LOSSES

The allowance for loan and lease losses was $226.8 million at September 30, 2019, compared to $226.6 million at June 30, 2019. The allowance as a percentage of total loans was 0.83% at September 30, 2019, compared to 0.85% at June 30, 2019 and 0.88% at December 31, 2018.

NONPERFORMING ASSETS

BancShares’ nonperforming assets, including nonaccrual loans and other real estate owned, were $155.9 million or 0.57% of total loans at September 30, 2019, compared to $151.2 million or 0.57% of total loans at June 30, 2019.

SHARES REPURCHASED

During the third quarter of 2019, BancShares repurchased 295,900 shares for $135.4 million at an average cost per share of $457.65. During the first nine months of 2019, BancShares repurchased a total of 744,400 shares of Class A common stock for $325.9 million at an average cost per share of $437.84. During the three and nine months ended September 30, 2018, BancShares repurchased a total of 125,000 shares of Class A common stock for $58.1 million at an average cost per share of $464.68. All Class A common stock repurchases completed in 2019 and 2018 were consummated under previously approved authorizations.

On October 29, 2019, the Board authorized share repurchases of up to 500,000 of BancShares' Class A common stock for the period November 1, 2019 through January 31, 2020. This authority will supersede all previously approved authorities.

ABOUT FIRST CITIZENS BANCSHARES

BancShares is the financial holding company for Raleigh, North Carolina-headquartered First Citizens Bank. First Citizens Bank provides a broad range of financial services to individuals, businesses, professionals and the medical community through branch offices in 19 states, including digital banking, mobile banking, ATMs and telephone banking. As of September 30, 2019, BancShares had total assets of $37.75 billion.

For more information, visit First Citizens’ website at firstcitizens.com. First Citizens Bank. Forever First^®.

DISCLOSURES ABOUT FORWARD LOOKING STATEMENTS

The discussions included in this Press Release may contain forward-looking statements within the meaning of the Private Securities Litigation Act of 1995, including Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. For the purposes of these discussions, any statements that are not statements of historical fact may be deemed to be forward-looking statements. Such statements are often characterized by the use of qualifying words such as “expects,” “anticipates,” “believes,” “estimates,” “plans,” “projects,” or other statements concerning opinions or judgments of the Registrant and its management about future events. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those described in the statements. The accuracy of such forward-looking statements could be affected by factors beyond the Registrant’s control, including, but not limited to, the financial success or changing conditions or strategies of the Registrant’s customers or vendors, fluctuations in interest rates, actions of government regulators, the availability of capital and personnel, the delay in closing (or failure to close) one or more of our previously announced acquisition transaction(s), the failure to realize the anticipated benefits of our previously announced acquisition transaction(s), or general competitive, economic, political, and market conditions. These forward-looking statements are made only as of the date of this Press Release, and the Registrant undertakes no obligation to revise or update these statements following the date of this Press Release, except as may be required by law.

###

CONSOLIDATED FINANCIAL HIGHLIGHTS



(Dollars in thousands, except share data; unaudited)	For the three months ended									Nine months ended September 30
(Dollars in thousands, except share data; unaudited)	September 30, 2019			June 30, 2019			September 30, 2018			2019			2018
SUMMARY OF OPERATIONS
Interest income	$	362,318		$	350,721		$	315,706		$	1,049,963		$	912,184
Interest expense	25,893			23,373			8,344			65,718			24,166
Net interest income	336,425			327,348			307,362			984,245			888,018
Provision for loan and lease losses	6,766			5,198			840			23,714			16,883
Net interest income after provision for loan and lease losses	329,659			322,150			306,522			960,531			871,135
Noninterest income	100,930			106,875			94,531			311,468			318,142
Noninterest expense	270,425			273,397			267,537			811,479			801,593
Income before income taxes	160,164			155,628			133,516			460,520			387,684
Income taxes	35,385			36,269			16,198			105,023			76,844
Net income	$	124,779		$	119,359		$	117,318		$	355,497		$	310,840
Taxable-equivalent net interest income	$	337,322		$	328,201		$	308,207		$	986,896		$	890,476
PER SHARE DATA
Net income per share	$	11.27		$	10.56		$	9.80		$	31.50		$	25.91
Cash dividends per share	0.40			0.40			0.35			1.20			1.05
Book value at period-end	327.86			319.74			294.40			327.86			294.40
CONDENSED BALANCE SHEET
Cash and due from banks	$	288,933		$	284,147		$	262,525		$	288,933		$	262,525
Overnight investments	949,899			1,640,264			943,025			949,899			943,025
Investment securities	7,167,680			6,695,578			7,040,674			7,167,680			7,040,674
Loans and leases	27,196,511			26,728,237			24,886,347			27,196,511			24,886,347
Less allowance for loan and lease losses	(226,825		)	(226,583		)	(219,197		)	(226,825		)	(219,197		)
Other assets	2,372,126			2,533,451			2,041,285			2,372,126			2,041,285
Total assets	$	37,748,324		$	37,655,094		$	34,954,659		$	37,748,324		$	34,954,659
Deposits	$	32,743,277		$	32,719,671		$	30,163,537		$	32,743,277		$	30,163,537
Other liabilities	1,436,565			1,360,810			1,292,109			1,436,565			1,292,109
Shareholders’ equity	3,568,482			3,574,613			3,499,013			3,568,482			3,499,013
Total liabilities and shareholders’ equity	$	37,748,324		$	37,655,094		$	34,954,659		$	37,748,324		$	34,954,659
SELECTED PERIOD AVERAGE BALANCES
Total assets	$	37,618,836		$	37,049,030		$	34,937,175		$	36,770,191		$	34,628,652
Investment securities	6,956,981			6,803,570			7,129,089			6,851,348			7,091,456
Loans and leases	26,977,476			26,597,242			24,698,799			26,368,922			24,193,870
Interest-earning assets	35,293,979			34,674,842			32,886,276			34,473,814			32,627,578
Deposits	32,647,264			32,100,210			30,237,329			31,856,771			29,939,492
Interest-bearing liabilities	20,551,393			20,397,445			18,783,160			20,204,705			18,899,001
Shareholders’ equity	3,580,235			3,546,041			3,470,368			3,545,418			3,401,450
Shares outstanding	11,060,462			11,286,520			11,971,460			11,286,984			11,997,281
SELECTED RATIOS
Annualized return on average assets	1.32		%	1.29		%	1.33		%	1.29		%	1.20		%
Annualized return on average equity	13.83			13.50			13.41			13.41			12.22
Taxable-equivalent net interest margin	3.80			3.79			3.73			3.83			3.65
Efficiency ratio ⁽¹⁾	61.9			64.3			67.3			63.6			68.5
Tier 1 risk-based capital ratio	11.8			12.0			13.2			11.8			13.2
Common equity Tier 1 ratio	11.8			12.0			13.2			11.8			13.2
Total risk-based capital ratio	13.1			13.3			14.6			13.1			14.6
Leverage capital ratio	9.2			9.4			10.1			9.2			10.1
⁽¹⁾The efficiency ratio is a non-GAAP financial measure which measures productivity and is generally calculated as noninterest expense divided by total revenue (net interest income and noninterest income). The efficiency ratio removes the impact of BancShares’ securities gains, acquisition gains, one-time gains on extinguishment of debt, and fair market value adjustment on marketable equity securities from the calculation. Management uses this ratio to monitor performance and believes this measure provides meaningful information to investors.

ALLOWANCE FOR LOAN AND LEASE LOSSES AND ASSET QUALITY DISCLOSURES



	Three months ended									Nine months ended September 30
(Dollars in thousands, unaudited)	September 30, 2019			June 30, 2019			September 30, 2018			2019			2018
ALLOWANCE FOR LOAN AND LEASE LOSSES (ALLL)
ALLL at beginning of period	$	226,583		$	228,775		$	224,865		$	223,712		$	221,893
Provision (credit) expense for loan and lease losses:
PCI loans ⁽¹⁾	(1,476		)	(637		)	(1,514		)	(2,277		)	1,000
Non-PCI loans ⁽¹⁾	8,242			5,835			2,354			25,991			15,883
Net charge-offs of loans and leases:
Charge-offs	(9,647		)	(10,602		)	(9,447		)	(30,403		)	(28,856		)
Recoveries	3,123			3,212			2,939			9,802			9,277
Net charge-offs of loans and leases	(6,524		)	(7,390		)	(6,508		)	(20,601		)	(19,579		)
ALLL at end of period	$	226,825		$	226,583		$	219,197		$	226,825		$	219,197
ALLL at end of period allocated to loans and leases:
PCI	$	6,867		$	8,343		$	10,909		$	6,867		$	10,909
Non-PCI	219,958			218,240			208,288			219,958			208,288
ALLL at end of period	$	226,825		$	226,583		$	219,197		$	226,825		$	219,197
Reserve for unfunded commitments	$	1,097		$	1,149		$	1,089		$	1,097		$	1,089
SELECTED LOAN DATA
Average loans and leases:
PCI	$	530,390		$	544,250		$	652,983		$	551,065		$	689,482
Non-PCI	26,379,156			25,995,212			24,045,816			25,762,098			23,504,388
Loans and leases at period-end:
PCI	513,589			551,447			638,018			513,589			638,018
Non-PCI	26,682,922			26,176,790			24,248,329			26,682,922			24,248,329
RISK ELEMENTS
Nonaccrual loans and leases	$	109,645		$	104,975		$	86,949		$	109,645		$	86,949
Other real estate	46,253			46,236			43,601			46,253			43,601
Total nonperforming assets	$	155,898		$	151,211		$	130,550		$	155,898		$	130,550
Accruing loans and leases 90 days or more past due	$	27,534		$	32,787		$	40,713		$	27,534		$	40,713
RATIOS
Net charge-offs (annualized) to average loans and leases	0.10			0.11			0.10			0.10			0.11
ALLL to total loans and leases:
PCI	1.34			1.51			1.71			1.34			1.71
Non-PCI	0.82			0.83			0.86			0.82			0.86
Total	0.83			0.85			0.88			0.83			0.88
Ratio of total nonperforming assets to total loans, leases and other real estate owned	0.57			0.57			0.52			0.57			0.52

⁽¹⁾ Loans and leases are evaluated at acquisition and where a discount is noted at least in part due to credit quality, the loans are accounted for under the guidance in ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. Loans for which it is probable at acquisition that all required payments will not be collected in accordance with the contractual terms are considered purchased credit-impaired (PCI) loans. PCI loans and leases are recorded at fair value at the date of acquisition. No allowance for loan and lease losses is recorded on the acquisition date as the fair value of the acquired assets incorporates assumptions regarding credit risk. An allowance is recorded if there is additional credit deterioration after the acquisition date. Non-PCI loans include originated and purchased non-impaired loans.

AVERAGE BALANCE AND NET INTEREST MARGIN SUMMARY



	Three months ended
	September 30, 2019						June 30, 2019						September 30, 2018
	Average				Yield/		Average				Yield/		Average				Yield/
(Dollars in thousands, unaudited)	Balance		Interest		Rate ⁽²⁾		Balance		Interest		Rate ⁽²⁾		Balance		Interest		Rate ⁽²⁾
INTEREST-EARNING ASSETS
Loans and leases ⁽¹⁾	$	26,977,476	$	315,621	4.65	%	$	26,597,242	$	303,803	4.58	%	$	24,698,799	$	272,868	4.39	%
Investment securities:
U. S. Treasury	834,577		5,262		2.50		1,150,001		6,770		2.36		1,504,594		7,104		1.87
Government agency	628,322		4,742		3.02		383,700		3,034		3.16		129,634		840		2.59
Mortgage-backed securities	5,195,711		27,891		2.15		4,979,160		28,130		2.26		5,266,282		29,160		2.21
Corporate bonds	149,888		1,912		5.10		147,669		1,931		5.23		121,855		1,609		5.28
State, county and municipal	—		—		—		334		1		1.81		—		—		—
Other investments	148,483		636		1.70		142,706		625		1.76		106,724		249		0.93
Total investment securities	6,956,981		40,443		2.32		6,803,570		40,491		2.38		7,129,089		38,962		2.18
Overnight investments	1,359,522		7,151		2.09		1,274,030		7,280		2.29		1,058,388		4,721		1.77
Total interest-earning assets	$	35,293,979	$	363,215	4.09	%	$	34,674,842	$	351,574	4.06	%	$	32,886,276	$	316,551	3.83	%
INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Checking with interest	$	5,328,855	$	500	0.04	%	$	5,366,731	$	445	0.03	%	$	5,177,349	$	319	0.02	%
Savings	2,636,583		528		0.08		2,658,974		527		0.08		2,506,421		210		0.03
Money market accounts	8,121,643		7,619		0.37		8,031,608		6,624		0.33		7,878,484		2,455		0.12
Time deposits	3,523,658		13,090		1.47		3,371,402		11,561		1.38		2,367,980		2,163		0.36
Total interest-bearing deposits	19,610,739		21,737		0.44		19,428,715		19,157		0.40		17,930,234		5,147		0.11
Securities sold under customer repurchase agreements	533,371		542		0.40		556,374		515		0.37		547,385		398		0.29
Other short-term borrowings	23,236		203		3.50		40,513		278		2.72		43,720		287		2.57
Long-term borrowings	384,047		3,411		3.51		371,843		3,423		3.64		261,821		2,512		3.77
Total interest-bearing liabilities	$	20,551,393	$	25,893	0.50		$	20,397,445	$	23,373	0.46		$	18,783,160	$	8,344	0.18
Interest rate spread					3.59	%					3.60	%					3.65	%
Net interest income and net yield on interest-earning assets			$	337,322	3.80	%			$	328,201	3.79	%			$	308,207	3.73	%

⁽¹⁾ Loans and leases include PCI and non-PCI loans, nonaccrual loans and loans held for sale.

⁽²⁾Yields related to loans, leases and securities exempt from both federal and state income taxes, federal income taxes only, or state income taxes only are stated on a taxable-equivalent basis assuming statutory federal income tax rates of 21.0%, as well as state income tax rates of 3.4% for all periods presented. The taxable-equivalent adjustment was $897, $853 and $845 for the three months ended September 30, 2019, June 30, 2019 and September 30, 2018, respectively.