News Column

Moody's affirms First Citizens (A3 deposits);

June 16, 2014



Moody's Investors Service affirmed all the

ratings of First-Citizens Bank & Trust Company. First Citizens has long-

and short-term bank deposit ratings of A3 and Prime-2, respectively, and

a standalone bank financial strength of C, mapping to a standalone

baseline credit assessment of a3. The rating outlook is stable. First

Citizens Bank & Trust Company is the banking subsidiary of First Citizens

BancShares, Inc., which is not rated by Moody's (collectively hereto

referred to as 'First Citizens'). The rating affirmation follows First

Citizens' announcement that it has entered into an agreement to acquire

South Carolina-based First Citizens Bancorporation, Inc.

Affirmations with Stable Outlook:

..Issuer: First-Citizens Bank & Trust Company

.... Adjusted Baseline Credit Assessment, Maintained a3

.... Baseline Credit Assessment, Maintained a3

.... Bank Financial Strength Rating, Affirmed C

.... Issuer Rating, Affirmed A3

....Deposit Ratings, Affirmed A3/P-2

....OSO Ratings, Affirmed A3/P-2

....Subordinate Regular Bond/Debenture, Affirmed Baa1

Outlook Actions:

..Issuer: First-Citizens Bank & Trust Company

....Outlook, Remains Stable

RATINGS RATIONALE

The affirmation of First Citizens' ratings with a stable outlook was

based on Moody's view that integration risk is low despite the fact that

First Citizens is acquiring a company that is nearly 40% of its size.

Moody's also expects the acquisition of First Citizens Bancorporation

will not weaken First Citizens' sound credit fundamentals.

Moody's said there are a number of important elements making the

integration risk lower than average for an acquisition of this size.

Firstly, First Citizens has good knowledge of First Citizens

Bancorporation through its common ownership interests by the Holding

family. Also, it has already acquired familiarity in First Citizens

Bancorporation's operation because most data processing has been

outsourced to First Citizens. Moody's added that both banks have a

relatively simple business model of taking deposits and originating loans

to hold on their balance sheets. Additionally, the acquired branches are

primarily located in contiguous markets.

Moody's said that First Citizens Bancorporation has a similar credit

profile as First Citizens and the rating agency expects the pro-forma

financial metrics of the combined company to remain solid upon closing.

Specifically, First Citizens Bancorporation's profitability and

liquidity metrics are better than those of First Citizens'. Moody's did

note that the acquired company's asset quality ratios are comparatively

weaker than First Citizens', but they are still relatively strong.

Moody's also expects First Citizens' pro-forma capital to remain

comparatively high as the transaction is priced conservatively and will

be financed principally by common share issuance.


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Source: EMBIN (Emerging Markets Business Information News)


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