SCHEDULE 13D/A: First Citizens BancShares Insiders Increase Stake to Over 21% Following Share Repurchases

An amendment to a Schedule 13D filing reveals key family members of First Citizens BancShares, Inc. have increased their aggregate beneficial ownership of Class A Common Stock to 21.55%, primarily due to company share repurchases.

Summary

• Frank B. Holding, Jr. increased his beneficial ownership of First Citizens BancShares, Inc. Class A Common Stock to 5.00% (604,682 shares), exceeding the 5% threshold due to Issuer share repurchases.
• Other Reporting Persons, including Hope H. Bryant (3.15% or 380,661 shares), Olivia B. Holding (7.59% or 918,104 shares), Claire H. Bristow (4.25% or 513,515 shares), and Carson H. Brice (2.46% or 297,073 shares), also saw their percentages of outstanding shares increase due to Issuer repurchases and changes from acquisitions and dispositions.
• The aggregate beneficial ownership of Class A Common Stock by the Reporting Persons is 2,606,144 shares, representing approximately 21.55% of the outstanding shares of that class.
• Certain entities in which some Reporting Persons are shareholders and directors hold an additional 466,532 shares of Class A Common Stock, or approximately 3.86% of the outstanding shares.
• The Reporting Persons also beneficially own approximately 54.01% of the outstanding Class B Common Stock and 0.80% of the outstanding Depositary Shares.
• Shares were acquired through gifts from parents, personal funds, exchange during the Bancorp Merger on October 1, 2014, and from the estate of Frank B. Holding.
• Ella Ann L. Holding has been removed as a Reporting Person as her beneficial ownership is less than 0.1%.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The increase in beneficial ownership percentages due to company share repurchases suggests a shrinking share count, which can be favorable for existing shareholders. However, the pledging of shares for personal borrowings introduces a minor negative aspect.

Positives

• The increase in the percentage of beneficial ownership by key family members, particularly due to company share repurchases, indicates a reduction in the total outstanding shares, which can be positive for existing shareholders by increasing their proportional ownership.
• Significant insider ownership (over 21% of Class A Common Stock by the Reporting Persons) aligns management and family interests with long-term shareholder value.

Negatives

• Certain Reporting Persons have pledged shares of Class A Common Stock to secure personal lines of credit and other personal borrowings, which could pose a risk if the stock price declines significantly.

Risks

• Shares of Class A Common Stock have been pledged by certain Reporting Persons to secure personal lines of credit and other personal borrowings, which could lead to forced sales if collateral requirements are not met due to stock price declines.

Future Outlook

The document does not provide explicit forward-looking statements or guidance regarding the company's future performance or strategic direction, focusing instead on changes in beneficial ownership.

Management Comments

• Frank B. Holding, Jr., Hope H. Bryant, and Claire H. Bristow's spouse, Peter M. Bristow, serve as executive officers and directors of the Issuer and participate with the Issuer's management and Board of Directors in making policy and considering and taking action on significant corporate events involving the Issuer.
• Shares of the Issuer's Class A Common Stock beneficially owned by each of the Reporting Persons and by each of the other individuals and entities are held for investment purposes.

Industry Context

This filing pertains to First Citizens BancShares, Inc., a financial institution. The changes in beneficial ownership reflect internal family holdings and are primarily driven by the company's own share repurchase activities, which is a common capital management strategy in the banking sector to return value to shareholders and optimize capital structure.

Comparison to Industry Standards

• The aggregate beneficial ownership of 21.55% of Class A Common Stock by a single family group is a significant concentration, which is not uncommon in long-standing regional banks like First Citizens BancShares, Inc. This level of insider ownership can be higher than that seen in larger, more widely held national or international banks, where ownership is typically more dispersed among institutional investors.
• The pledging of shares for personal borrowings is a practice that can occur across industries, but its risk profile is particularly relevant for financial institutions where stability and confidence are paramount. While not unique to banking, it warrants attention given the nature of the business.

Management Changes

Corporate Governance

Related Party Transactions

• Shares of Class A Common Stock were acquired by Reporting Persons through gifts from their parents, Frank B. Holding and Ella Ann L. Holding.
• Shares were acquired in exchange for shares of First Citizens Bancorporation, Inc. upon its merger into the Issuer, involving related entities and individuals.
• Shares were acquired directly or indirectly from or through the estate of their father, Frank B. Holding.
• Shares held by children and grandchildren of Reporting Persons were acquired through gifts from them and Frank B. Holding and Ella Ann L. Holding.
• Shares held by various entities, including two charitable foundations, were acquired in part with their separate funds or contributions by Lewis R. Holding and Frank B. and Ella Ann L. Holding.
• Certain Reporting Persons have pledged shares of Class A Common Stock to secure personal lines of credit and other personal borrowings unrelated to their acquisition of the Issuer's stock.

Stakeholder Impact

• Shareholders: The increased percentage of beneficial ownership by the Holding family due to company repurchases indicates a reduced share count, potentially increasing earnings per share and the value of existing shares. However, the pledging of shares by insiders introduces a potential risk.
• Employees: The continued involvement of Frank B. Holding, Jr. and Hope H. Bryant as executive officers and directors provides stability in leadership and strategic direction.

Next Steps

• The Reporting Persons will continue to hold shares for investment purposes.
• Frank B. Holding, Jr., Hope H. Bryant, and Peter M. Bristow will continue their roles as executive officers and directors, participating in management and policy-making.

Key Dates

Keywords

First Citizens BancShares, beneficial ownership, insider ownership, Schedule 13D, stock repurchase, family ownership, Class A Common Stock, SEC filing, financial services