First Citizens BancShares Inc. in Raleigh, N.C., reported only modest earnings growth in 2011 as income gains from failed-bank acquisitions were largely offset by higher loss provisions related to loans it inherited in those deals.
The $21 billion-asset parent of First Citizens Bank & Trust Co. said Thursday that its fourth-quarter net income rose 1.5% from the same period in 2010, to $30.5 million, and that full-year earnings rose 1%, to $195 million. The income gains were largely a result of increased loan volume stemming from its acquisitions of two failed banks in Colorado last year that combined added more than $3 billion of assets. Net interest income climbed 6.1% for the quarter, to, $242 million, and 12.5% for the full year, to $871 million.
However, the deals also increased First Citizens' level of problem loans, which forced it to boost its loan-loss provision for the year by 61% from the prior year, to $232 million. The company also said that problem loans not covered by loss-sharing agreements with the Federal Deposit Insurance Corp. rose 15%, to nearly $227 million.
First Citizens has been an active consolidator in recent years, acquiring six failed banks and folded its IronStone Bank franchise, which it created in 2003, into its First Citizens brand. The company now has more than 430 branches stretching from North Carolina to the Pacific Northwest.