Terms

Series

5.375% Non-Cumulative Perpetual Preferred Stock, Series A

Liquidation Preference

$25.00

Coupon Rate

5.375%

Rate Type

Fixed

Annual Dividend

$1.34

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

March 15, 2025

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness And Non-Equity Claims, Any Future Preferred Stock Expressly Stated To Be Senior (With Requisite Holder Consent), 3.375% Fixed-To-Floating Rate Subordinated Notes Due 2030; Pari Passu With: Any Future Preferred Stock Expressly Stated To Be On Parity With Series A Preferred Stock; Senior To: Common Stock, Any Future Junior Capital Stock Not Expressly Pari Passu Or Senior

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.025

Shares Offered

12,000,000

Prospectus Summary

First Citizens BancShares, Inc. is offering 12,000,000 depositary shares (Nasdaq: FCNCP), each representing a 1/40th interest in a share of its 5.375% Non-Cumulative Perpetual Preferred Stock, Series A, with a liquidation preference of $25 per depositary share and an annual dividend of approximately $1.34 per depositary share paid quarterly on March 15, June 15, September 15, and December 15, beginning June 15, 2020. The preferred stock is non-cumulative: if the board does not declare a dividend for any quarter, that dividend is permanently forgone — it does not accumulate and investors have no future claim to it. The stock is perpetual with no maturity date and is first callable at par ($25) on any dividend payment date on or after March 15, 2025. The Series A preferred stock sits above common stock in the capital stack but is subordinate to all of First Citizens BancShares' existing and future debt, including the $350 million of 3.375% subordinated notes issued in March 2020. As a holding company instrument, it is also structurally subordinated to all obligations of its bank subsidiary, First-Citizens Bank & Trust Company — dividends on the preferred must flow up from the bank, which is subject to regulatory dividend restrictions. A regulatory capital call provision allows the company to redeem all (but not part) of the Series A preferred within 90 days if a change in law or regulation causes it to lose its status as Additional Tier 1 capital under Federal Reserve rules, potentially forcing early redemption at $25 per depositary share regardless of market price. At the $25 offering price, the Series A preferred yields exactly 5.375% annually (~$0.336 per depositary share per quarter). Record dates are set approximately 15 calendar days before each payment date. Dividends from this C-corporation issuer are expected to qualify for the preferential qualified dividend income (QDI) tax rate for individual holders and the dividends-received deduction (DRD) for eligible corporate holders. The dividend stopper is triggered if First Citizens fails to pay full dividends on the Series A for the most recently completed period — in that event, no dividends may be paid on common stock or any junior security and no junior or parity stock may be repurchased, though skipped preferred dividends themselves are permanently lost given the non-cumulative structure.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If First Citizens BancShares has not paid full dividends on the Series A preferred stock for the most recently completed dividend period, it is blocked from paying dividends on common stock or any junior capital stock and from repurchasing or redeeming any junior or parity stock.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 75 (Strong)