FOR IMMEDIATE RELEASE
July 22, 2005

For information, contact

First Citizens Bank
Craig Nix
Phone: (803) 733-2659

First Citizens Reports Earnings for Second Quarter 2005

Columbia, S.C., July 22, 2005 – First Citizens Bancorporation, Inc. (OTCBB-“FCBN”) (herein referred to as “Bancorporation”) reports consolidated net income for the quarter ended June 30, 2005 of $11.20 million.

Net income. Net income for the quarter ended June 30, 2005 was $11.20 million compared to $8.08 million for the quarter ended June 30, 2004. The increase in net income was primarily driven by an increase in net interest income of $4.69 million. During the quarter, net interest income after provision for loan losses increased by $6.57 million, partially offset by a decrease in noninterest income of $1.36 million and an increase in noninterest expense of $217 thousand.

Condensed Balance Sheet. Total assets increased from $4.53 billion as of December 31, 2004 to $4.99 billion as of June 30, 2005. Total deposits as of June 30, 2005 were $4.13 billion compared to $3.85 billion as of December 31, 2004. Gross loans as of June 30, 2005 were $3.31 billion compared to $3.12 billion as of December 31, 2004. On May 1, 2005, First Citizens Bank and Trust Company, Inc. (“First Citizens Bank”) completed its acquisition of People’s Community Capital Corporation (“PCCC”). As a result of the PCCC acquisition, total loans of $81.43 million, deposits of $106.84 million, and goodwill of $23.43 million were recorded.

Long-term debt increased from $125.36 million as of December 31, 2004 to $205.87 million as of June 30, 2005. The increase primarily related to the issuance and sale on April 5, 2005 of $75 million principal amount of subordinated notes due April 1, 2015. The remainder of the increase related to long-term debt acquired in the PCCC acquisition.

Other assets increased from $119.66 million as of December 31, 2004 to $268.79 million as of June 30, 2005. The increase primarily related to the funding by First Citizens Bank of a trust account on June 30, 2005 in the amount of $108.66 million to pay shareholders in connection with the acquisition of Summit Financial Corporation. The acquisition became effective on July 1, 2005.

Net interest income. During the second quarter of 2005, net interest income increased by $4.69 million to $42.28 million or by 12.47%, from $37.60 million for the quarter ended June 30, 2004. The increase in net interest income was primarily due to earning asset growth. Average earning assets grew by 11.60% from $4.06 billion as of June 30, 2004 compared to $4.53 billion as of June 30, 2005, an increase of $471 million. The most significant component of earning asset growth was in loans.

Provision for loan losses. For the comparable quarters, provision for loan losses decreased by $1.88 million. The decline was due to a decline in net charge-offs from $1.71 million for the quarter ended June 30, 2004 to $836 thousand for the quarter ended June 30, 2005 and a continuing decline in the net charge-off ratio.

Noninterest income and expense. For the comparable quarters, noninterest income decreased $1.36 million or by 8.66%. The most significant components of the change in noninterest income were a $1.35 million decrease in mortgage income and a $662 thousand decrease in the gain on sale of investment securities, partially offset by an increase of $413 thousand in service charges on deposits.

The decrease in mortgage income was primarily related to a $1.52 million increase in amortization expense on mortgage serving rights. The increase in amortization expense was primarily related to the recording of impairment during the quarter ended June 30, 2005 totaling $307 thousand compared to recapture of impairment of $1.22 million recorded during the quarter ended June 30, 2004.

Noninterest expense increased $217 thousand or by .57% over the comparable quarter in 2004. The most significant components of the change in noninterest expense were a $720 thousand increase in salaries and employee benefits, a $359 thousand increase in net occupancy expense and a $249 thousand increase in furniture and equipment expense, partially offset by decreases of $1.12 million in other noninterest expense and a net $292 thousand in amortization expense. The increase in salary expense is primarily due to increases in salaries related to the PCCC acquisition and increases in employee benefits costs. The increase in net occupancy and furniture and equipment expense relates primarily to an increase in depreciation expense of $529 thousand. Other noninterest expense declined primarily due to $1.02 million in branding campaign expenses incurred in the second quarter of 2004 which were not incurred in 2005. The net decrease in amortization expense is primarily due to the run-off of core deposit intangible on prior acquisitions.

Net income for the six months ended June 30, 2005. For the six months ended June 30, 2005, consolidated net income was $21.16 million compared to $16.40 million for the six months ended June 30, 2004. Net income increased for the six months ended June 30, 2005, due to an $8.80 million increase in net interest income after provision for loan losses, and a $132 thousand increase in noninterest income, partially offset by a $1.27 million increase in noninterest expense. Net interest income after provision for loan losses was $79.79 million for the six months ended June 30, 2005, an increase of $8.80 million over the same period in 2004. Net interest income after provision for loan losses and noninterest expense increased for the same reasons explained above for the quarter ended June 30, 2005. The more significant changes in noninterest income consisted of a $725 thousand increase in the gain on sale of fixed assets, a $219 thousand increase in bankcard fees, partially offset by a decrease in the gain on sale of investment securities of $911 thousand.

Dividends declared. At its meeting held today, the Board of Directors of Bancorporation declared a second quarter common stock dividend of $0.35 per share for shareholders of record as of August 15, 2005, payable August 25, 2005.

Acquisition of Summit Financial Corporation. On July 1, 2005, Bancorporation announced that First Citizens Bank completed its acquisition of Summit Financial Corporation. Total assets of $351.69 million, total loans of $255.42 million and total deposits of $267.62 million were acquired as a result of the transaction.

First Citizens Bancorporation, Inc. is a three-bank financial holding company headquartered in Columbia, South Carolina, with $4.99 billion in total consolidated assets as of June 30, 2005. For more information, visit the First Citizens website at www.firstcitizensonline.com.

This discussion may contain statements that could be deemed forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act, which statements are inherently subject to risks and uncertainties. Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results, or otherwise are not statements of historical fact. Such statements are often characterized by the use of the qualifying words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” or other statements concerning opinions or judgments of Bancorporation and its management about future events. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to, the financial success or changing strategies of Bancorporation’s customers, competition, deposit attrition, actions of government regulators, the level of market interest rates, general economic conditions, and risks, uncertainties, and other factors described from time to time in Bancorporation’s periodic reports filed with the United States Securities and Exchange Commission.

CONDENSED STATEMENTS OF INCOME

(thousands, except per share data; unaudited)

Quarter ended
June 30,

Six months ended
June 30,

  2005 2004 2005 2004
Interest income

  $

60,381

  $

48,801

  $

115,338

  $

97,526

Interest expense  

18,099

 

11,206

 

33,111

 

22,378

Net interest income  

42,282

 

37,595

 

82,227

 

75,148

Provision for loan losses  

1,121

 

3,002

 

2,439

 

4,156

Net interest income after provision for loan losses  

41,161

 

34,593

 

79,788

 

70,992

Noninterest income  

14,370

 

15,732

 

28,871

 

28,739

Noninterest expense  

38,034

 

37,817

 

75,605

 

74,339

Income before income tax expense  

17,497

 

12,508

 

33,054

 

25,392

Income tax expense  

6,299

 

4,428

 

11,899

 

8,988

Net income

$

11,198

$

8,080

$

21,155

$

16,404

Net income per share

$

12.41

$

8.90

$

23.44

$

18.05

Cash dividends paid per share

$

0.35

$

0.35

$

0.70

$

0.70

Profitability information (annualized):
Return on average assets  

0.91%

 

0.73%

 

0.88%

 

0.75%

Return on average equity  

11.67

 

9.27

 

11.22

 

9.47

Taxable-equivalent net yield on average interest-earning assets  

3.76

 

3.74

 

3.76

 

3.76

CONDENSED BALANCE SHEET

(thousands, except share data; unaudited)

June 30,

December 31,

 

2005

2004

             

Cash and due from bank

$

192,982

$

162,620

Federal funds sold

 

118,222

 

111,554

Investment securities

 

978,841

 

904,419

Loans and leases, net

 

3,305,629

 

3,124,197

Allowance for loan losses  

(45,100)

 

(43,623)

Premises and equipment, net

171,980

154,823

Other assets

 

268,792

 

119,661

Total assets

$

4,991,346

$

4,533,651

   
 

Deposits

$

4,131,255

$

3,848,373

Long-term debt

 

205,874

 

125,361

Other liabilities

 

265,199

 

190,461

Shareholders� equity

 

398,018

 

369,456

Total liabilities and shareholders� equity

$

4,991,346

$

4,533,651

Book value per share

$

429.31

$

407.54


SELECTED AVERAGE BALANCES

 (thousands, except per share data; unaudited)     Quarter ended June 30,     Six months ended June 30,
  2005 2004 2005 2004
Total Assets

  $

4,957,747

  $

4,439,195

  $

4,838,359

  $

4,420,910

Investment securities  

972,982

 

904,207

 

951,488

 

913,320

Loans and leases, net  

3,252,600

 

3,016,043

 

3,200,431

 

2,983,888

Interest-bearing assets  

1,121

 

3,002

 

2,439

 

4,156

Deposits  

41,161

 

34,593

 

79,788

 

70,992

Interest-bearing liabilities  

14,370

 

15,732

 

28,871

 

28,739

Stockholders' equity  

38,034

 

37,817

 

75,605

 

74,339


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