First Citizens’ 2Q profit soars
First Citizens BancShares’ net income soared to $28.6 million in the second quarter as loss-share agreements with the Federal Deposit Insurance Corp. helped the Raleigh-based bank post strong gains in interest revenue while incurring only a slight increase in its provision for loan losses.
In an earnings release issued after the close of trading Monday, First Citizens (Nasdaq: FCNCA) reported a 362 percent gain in second quarter profit – up from $6.2 million in the same quarter last year. On a per-share basis, earnings climbed to $2.54 from 59 cents.
Net interest income jumped 40 percent, to $47.8 million, due for the most part to loans acquired by First Citizens last year when the Raleigh bank acquired failed banks on the Atlantic and Pacific coasts payday loans.
The FDIC brokered those deals and agreed to cover much of the potential loan losses.
First Citizens did raise its provision for loan losses by 53 percent – to $31.8 million – in the quarter ended June 30. But with the FDIC covering nearly 70 percent of the potential loan losses shown on First Citizens’ books, the bank is in solid shape on its bottom line.