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First Citizens BancShares (NYSE: FCNCA) is a bank holding company that operates commercial banking operations in the United States. Its operations are focused on standard commercial banking functions and it operates two banking subsidiaries: First-Citizens Bank & Trust operates branches in the southern and western United States while IronStone Bank operates branches in the southern, southwestern, and western United States. In the wake of the 2008 financial crisis, First Citizens faces unfamiliar challenges as the credit market remains uncertain and it may be affected by Western Union's lawsuit against the Federal Deposit Insurance Corporation (FDIC).

Business Growth

In 2010, net income increased to $193.0 million from $116.3 million in 2009.[1] The primary driver of this increase was increased loan volume through the acquisition of Western Bank and other commercial banks with the assistance and backing of the FDIC. First Citizens intends to continue its expansion through further FDIC-aided acquisitions.[2]

Trends & Forces

Uncertainty in credit market affects lending revenues

FCNCA's primary source of revenue is its lending practice - like any commercial bank, First Citizens pays customers interest on their deposits so that it can lend out their money at a higher rate. The net interest margin metric acts as proxy for the bank's ability to earn interest on its assets. In the midst of credit market uncertainty following the 2008 financial crisis, the company's ability to lend profitably may be reduced and its net interest margin may decrease.

United Western suing FDIC for illegal seizure of assets

United Western, which FCNCA acquired in 2011, is suing the FDIC for illegal seizure of the bank's assets. FCNCA was not explicitly named in the lawsuit even though it now owns United Western - because of the FDIC partially insured FCNCA against losses from UW's assets, the lawsuit's potential impact on the company is uncertain according to management.[3]


First Citizens competes with other commercial banks in its regions of operation including competing regional banks and national competitors:

FCNCA and its competitors increase revenues and income by increasing their deposit and loan volume. The industry is competitive as companies increase their deposit interest rates while decreasing their loan rates and fees to attract customers.


  1. FCNCA 2010 10-K pg. 113  
  2. FCNCA 2010 10-K pg. 19  
  3. FCNCA 2010 10-K pg. 76  
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