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FORM 10-Q



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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF
1934



For the quarter ended September 30, 2004



Commission File Number 0-11172



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FIRST CITIZENS BANCORPORATION, INC.

(Exact name of registrant as specified in
its charter)



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|South Carolina                                                 |  | 57-0738665                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)



|                                          |  |           
|----------------------------------------- |  | ----------
|1225 Lady Street Columbia, South Carolina |  | 29201     
|(Address of principal executive offices)  |  | (Zip Code)



Registrants
telephone number, including area code (803) 733-3456



No
Change

(Former name, former address and former fiscal year, if changed since last report.)



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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO ̈



Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the
Act).    YES  x    NO ̈



Indicate the number of shares outstanding of each of the issuers classes of common
stock, as of the latest practicable date.



|                                         |  |                                
|---------------------------------------- |  | -------------------------------
|Class                                    |  | Outstanding at October 31, 2004
|Voting Common Stock, $5.00 Par Value     |  | 862,505 Shares                 
|Non-Voting Common Stock, $5.00 Par Value |  | 36,409 Shares                  



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PART I - FINANCIAL INFORMATION



Item 1. Financial Statements



FIRST CITIZENS BANCORPORATION, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED (Dollars in thousands, except par values and share data)



|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | --------- | - | ---------------- | - | --------- | ----------------- |  | - | --------- | -
|                                                                                                                                                                               |  | September 30,2004 |           |   | December 31,2003 |   |           | September 30,2003 | 
|ASSETS                                                                                                                                                                         |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Cash and due from banks                                                                                                                                                        |  | $                 | 145,184   |   |                  | $ | 179,951   |                   |  | $ | 146,660   |  
|Federal funds sold                                                                                                                                                             |  |                   | 119,903   |   |                  |   | 41,379    |                   |  |   | 87,972    |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Total cash and cash equivalents                                                                                                                                                |  |                   | 265,087   |   |                  |   | 221,330   |                   |  |   | 234,632   |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Investment securities:                                                                                                                                                         |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Held-to-maturity, at amortized cost (fair value September 30, 2004-$16,512 December 31, 2003-$20,064; and September 30,
2003-$20,344)                                          |  |                   | 16,349    |   |                  |   | 19,766    |                   |  |   | 19,795    |  
|Available-for-sale, at fair value                                                                                                                                              |  |                   | 884,405   |   |                  |   | 902,463   |                   |  |   | 904,516   |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Total investment securities                                                                                                                                                    |  |                   | 900,754   |   |                  |   | 922,229   |                   |  |   | 924,311   |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Gross loans and leases                                                                                                                                                         |  |                   | 3,081,307 |   |                  |   | 2,939,989 |                   |  |   | 2,849,806 |  
|Less: Allowance for loan and lease losses                                                                                                                                      |  |                   | (51,992   | ) |                  |   | (51,268   | )                 |  |   | (50,467   | )
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Net loans and leases                                                                                                                                                           |  |                   | 3,029,315 |   |                  |   | 2,888,721 |                   |  |   | 2,799,339 |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Premises and equipment, net                                                                                                                                                    |  |                   | 151,724   |   |                  |   | 134,756   |                   |  |   | 127,503   |  
|Interest receivable                                                                                                                                                            |  |                   | 17,506    |   |                  |   | 16,429    |                   |  |   | 18,055    |  
|Goodwill                                                                                                                                                                       |  |                   | 24,549    |   |                  |   | 24,525    |                   |  |   | 25,323    |  
|Intangible assets                                                                                                                                                              |  |                   | 39,095    |   |                  |   | 45,876    |                   |  |   | 48,147    |  
|Other assets                                                                                                                                                                   |  |                   | 50,176    |   |                  |   | 47,949    |                   |  |   | 43,264    |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Total assets                                                                                                                                                                   |  | $                 | 4,478,206 |   |                  | $ | 4,301,815 |                   |  | $ | 4,220,574 |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                           |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Liabilities:                                                                                                                                                                   |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Deposits:                                                                                                                                                                      |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Demand                                                                                                                                                                         |  | $                 | 729,289   |   |                  | $ | 651,687   |                   |  | $ | 676,486   |  
|Time and savings                                                                                                                                                               |  |                   | 3,057,713 |   |                  |   | 3,062,890 |                   |  |   | 2,973,807 |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Total deposits                                                                                                                                                                 |  |                   | 3,787,002 |   |                  |   | 3,714,577 |                   |  |   | 3,650,293 |  
|                                                                                                                                                                               |  |                   |          
|Short-term borrowings and securities sold under agreements to repurchase                                                                                                       |  |                   | 185,134   |   |                  |   | 148,864   |                   |  |   | 148,043   |  
|Long-term debt                                                                                                                                                                 |  |                   | 125,361   |   |                  |   | 73,814    |                   |  |   | 72,357    |  
|Other liabilities                                                                                                                                                              |  |                   | 24,571    |   |                  |   | 24,977    |                   |  |   | 20,349    |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Total liabilities                                                                                                                                                              |  |                   | 4,122,068 |   |                  |   | 3,962,232 |                   |  |   | 3,891,042 |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Stockholders equity:                                                                                                                                                          |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Preferred stock                                                                                                                                                                |  |                   | 3,111     |   |                  |   | 3,111     |                   |  |   | 3,111     |  
|Non-voting common stock - $5.00 par value, authorized 1,000,000; issued and outstanding September 30, 2004, December 31, 2003 and September
30, 2003 - 36,409                  |  |                   | 182       |   |                  |   | 182       |                   |  |   | 182       |  
|Voting common stock - $5.00 par value, authorized 2,000,000; issued and outstanding September 30, 2004 - 862,505 December 31, 2003 - 869,072;
and September 30, 2003 - 869,487 |  |                   | 4,313     |   |                  |   | 4,345     |                   |  |   | 4,347     |  
|Surplus                                                                                                                                                                        |  |                   | 65,081    |   |                  |   | 65,081    |                   |  |   | 65,081    |  
|Undivided profits                                                                                                                                                              |  |                   | 268,347   |   |                  |   | 247,647   |                   |  |   | 238,798   |  
|Accumulated other comprehensive income, net of deferred taxes of $8,133 at September 30, 2004; $10,348 at December 31, 2003; and $9,699 at
September 30, 2003                  |  |                   | 15,104    |   |                  |   | 19,217    |                   |  |   | 18,013    |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Total stockholders equity                                                                                                                                                     |  |                   | 356,138   |   |                  |   | 339,583   |                   |  |   | 329,532   |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  
|Total liabilities and stockholders equity                                                                                                                                     |  | $                 | 4,478,206 |   |                  | $ | 4,301,815 |                   |  | $ | 4,220,574 |  
|                                                                                                                                                                               |  |                   |           |   |                  |   |           |                   |  |   |           |  



See accompanying
Notes to the Consolidated Financial Statements



Page 2



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FIRST CITIZENS BANCORPORATION, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(Dollars in thousands-except per share data)



|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|------------------------------------------------------------ |  | ---------------------------------- | ------- | -------------------------------------- | - | ------- |  | ---- | ------- |  | - | -------
|                                                             |  | For the Quarter EndedSeptember 30, |         | For the Nine Months EndedSeptember 30,
|                                                             |  | 2004                               |         | 2003                                   |   | 2004    |  | 2003
|Interest income:                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Interest and fees on loans and leases                        |  | $                                  | 45,044  |                                        | $ | 43,477  |  | $    | 131,566 |  | $ | 126,987
|Interest on investment securities:                           |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Taxable                                                      |  |                                    | 5,151   |                                        |   | 5,805   |  |      | 15,245  |  |   | 19,472 
|Non-taxable                                                  |  |                                    | 91      |                                        |   | 137     |  |      | 305     |  |   | 411    
|Federal funds sold                                           |  |                                    | 442     |                                        |   | 299     |  |      | 1,139   |  |   | 1,510  
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Total interest income                                        |  |                                    | 50,728  |                                        |   | 49,718  |  |      | 148,255 |  |   | 148,380
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Interest expense:                                            |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Interest on deposits                                         |  |                                    | 9,451   |                                        |   | 9,865   |  |      | 27,890  |  |   | 32,703 
|Interest on short-term borrowings                            |  |                                    | 611     |                                        |   | 338     |  |      | 1,291   |  |   | 1,070  
|Interest on long-term debt                                   |  |                                    | 1,955   |                                        |   | 1,460   |  |      | 5,214   |  |   | 3,992  
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Total interest expense                                       |  |                                    | 12,017  |                                        |   | 11,663  |  |      | 34,395  |  |   | 37,765 
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Net interest income                                          |  |                                    | 38,711  |                                        |   | 38,055  |  |      | 113,860 |  |   | 110,615
|Provision for loan losses                                    |  |                                    | 1,349   |                                        |   | 4,436   |  |      | 5,505   |  |   | 7,799  
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Net interest income after provision for loan losses          |  |                                    | 37,362  |                                        |   | 33,619  |  |      | 108,355 |  |   | 102,816
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Noninterest income:                                          |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Service charges on deposits                                  |  |                                    | 8,860   |                                        |   | 9,179   |  |      | 26,415  |  |   | 26,203 
|Commissions and fees from fiduciary activities               |  |                                    | 759     |                                        |   | 864     |  |      | 2,343   |  |   | 2,521  
|Mortgage income                                              |  |                                    | 684     |                                        |   | 4,022   |  |      | 3,277   |  |   | 6,889  
|Bankcard discount and fee income                             |  |                                    | 1,820   |                                        |   | 1,735   |  |      | 5,046   |  |   | 4,733  
|Gain on sale of investment securities                        |  |                                    |        |                                        |   | 62      |  |      | 852     |  |   | 781    
|Other                                                        |  |                                    | 889     |                                        |   | 1,223   |  |      | 3,819   |  |   | 4,083  
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Total noninterest income                                     |  |                                    | 13,012  |                                        |   | 17,085  |  |      | 41,752  |  |   | 45,210 
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Noninterest expense:                                         |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Salaries and employee benefits                               |  |                                    | 18,192  |                                        |   | 17,548  |  |      | 54,970  |  |   | 52,001 
|Net occupancy expense                                        |  |                                    | 3,176   |                                        |   | 2,817   |  |      | 9,099   |  |   | 8,072  
|Furniture and equipment expense                              |  |                                    | 2,110   |                                        |   | 1,823   |  |      | 6,086   |  |   | 5,067  
|Bankcard processing fees                                     |  |                                    | 1,940   |                                        |   | 1,749   |  |      | 5,550   |  |   | 4,933  
|Data processing fees                                         |  |                                    | 3,238   |                                        |   | 2,932   |  |      | 9,623   |  |   | 8,597  
|Amortization expense                                         |  |                                    | 2,252   |                                        |   | 2,242   |  |      | 6,768   |  |   | 5,917  
|Other                                                        |  |                                    | 5,704   |                                        |   | 5,551   |  |      | 18,855  |  |   | 15,937 
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Total noninterest expense                                    |  |                                    | 36,612  |                                        |   | 34,662  |  |      | 110,951 |  |   | 100,524
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Income before income tax expense                             |  |                                    | 13,762  |                                        |   | 16,042  |  |      | 39,156  |  |   | 47,502 
|Income tax expense                                           |  |                                    | 4,872   |                                        |   | 5,806   |  |      | 13,861  |  |   | 17,006 
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Net income                                                   |  | $                                  | 8,890   |                                        | $ | 10,236  |  | $    | 25,295  |  | $ | 30,496 
|                                                             |  |                                    |         |                                        |   |         |  |      |         |  |   |        
|Net income per common share - basic and diluted              |  | $                                  | 9.83    |                                        | $ | 11.24   |  | $    | 27.89   |  | $ | 33.44  
|Weighted average common shares outstanding-basic and diluted |  |                                    | 899,899 |                                        |   | 907,075 |  |      | 902,760 |  |   | 909,045
|Cash dividends paid per common share                         |  | $                                  | 0.35    |                                        | $ | 0.35    |  | $    | 1.05    |  | $ | 0.85   



See accompanying
Notes to the Consolidated Financial Statements.



Page 3



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FIRST CITIZENS BANCORPORATION, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME - UNAUDITED

(Dollars in thousands)



|                                                                                                                               |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | ----- | - | ---------------------- | - | ----------------- |  | - | ------- | - | ---------------- | - | ------ | ------------------------------------------------ | - | ------- | --------------------------- |  | - | ------ | - |  | - | ------- | -
|                                                                                                                               |  | PreferredStock |       |   | Non- VotingCommonStock |   | VotingCommonStock |  |   | Surplus |   | UndividedProfits |   |        | Accumulated OtherComprehensiveIncome/(Loss), Net |   |         | Total Stock- holdersEquity | 
|Balance at December 31, 2002                                                                                                   |  | $              | 3,173 |   |                        | $ | 182               |  | $ | 4,374   |   |                  | $ | 65,081 |                                                  | $ | 211,264 |                             |  | $ | 19,510 |   |  | $ | 303,584 |  
|Comprehensive income:                                                                                                          |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Net income                                                                                                                     |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   | 30,496  |                             |  |   |        |   |  |   | 30,496  |  
|Change in net unrealized gains on investment securities available-for-sale, net of benefit of $534                             |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   | (989   | ) |  |   | (989    | )
|Reclassification adjustment for losses (gains) on securities available-for-sale included in net income, net of expense of $273 |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   | (508   | ) |  |   | (508    | )
|                                                                                                                               |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Total comprehensive income                                                                                                     |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   | 28,999  |  
|                                                                                                                               |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Reacquired preferred stock                                                                                                     |  |                | (62   | ) |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   | 21      |                             |  |   |        |   |  |   | (41     | )
|Reacquired voting common stock                                                                                                 |  |                |       |   |                        |   |                   |  |   | (27     | ) |                  |   |        |                                                  |   | (2,119  | )                           |  |   |        |   |  |   | (2,146  | )
|Common stock dividends                                                                                                         |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   | (742    | )                           |  |   |        |   |  |   | (742    | )
|Preferred stock dividends                                                                                                      |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   | (122    | )                           |  |   |        |   |  |   | (122    | )
|                                                                                                                               |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Balance at September 30, 2003                                                                                                  |  |                | 3,111 |   |                        |   | 182               |  |   | 4,347   |   |                  |   | 65,081 |                                                  |   | 238,798 |                             |  |   | 18,013 |   |  |   | 329,532 |  
|Comprehensive income:                                                                                                          |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Net income                                                                                                                     |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   | 9,387   |                             |  |   |        |   |  |   | 9,387   |  
|Change in net unrealized gains on investment securities available-for-sale, net of tax of $648                                 |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   | 1,204  |   |  |   | 1,204   |  
|                                                                                                                               |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Total comprehensive income                                                                                                     |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   | 10,591  |  
|                                                                                                                               |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Reacquired voting common stock                                                                                                 |  |                |       |   |                        |   |                   |  |   | (2      | ) |                  |   |        |                                                  |   | (191    | )                           |  |   |        |   |  |   | (193    | )
|Common stock dividends                                                                                                         |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   | (304    | )                           |  |   |        |   |  |   | (304    | )
|Preferred stock dividends                                                                                                      |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   | (43     | )                           |  |   |        |   |  |   | (43     | )
|                                                                                                                               |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Balance at December 31, 2003                                                                                                   |  |                | 3,111 |   |                        |   | 182               |  |   | 4,345   |   |                  |   | 65,081 |                                                  |   | 247,647 |                             |  |   | 19,217 |   |  |   | 339,583 |  
|Comprehensive income:                                                                                                          |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Net income                                                                                                                     |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   | 25,295  |                             |  |   |        |   |  |   | 25,295  |  
|Change in net unrealized gains on investment securities available-for-sale, net of benefit of $1,917                           |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   | (3,559 | ) |  |   | (3,559  | )
|Reclassification adjustment for losses (gains) on securities available-for-sale included in net income, net of expense of $298 |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   | (554   | ) |  |   | (554    | )
|                                                                                                                               |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Total comprehensive income                                                                                                     |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   | 21,182  |  
|                                                                                                                               |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Reacquired voting common stock                                                                                                 |  |                |       |   |                        |   |                   |  |   | (32     | ) |                  |   |        |                                                  |   | (3,381  | )                           |  |   |        |   |  |   | (3,413  | )
|Common stock dividends                                                                                                         |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   | (1,093  | )                           |  |   |        |   |  |   | (1,093  | )
|Preferred stock dividends                                                                                                      |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   | (121    | )                           |  |   |        |   |  |   | (121    | )
|                                                                                                                               |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  
|Balance at September 30, 2004                                                                                                  |  | $              | 3,111 |   |                        | $ | 182               |  | $ | 4,313   |   |                  | $ | 65,081 |                                                  | $ | 268,347 |                             |  | $ | 15,104 |   |  | $ | 356,138 |  
|                                                                                                                               |  |                |       |   |                        |   |                   |  |   |         |   |                  |   |        |                                                  |   |         |                             |  |   |        |   |  |   |         |  



See accompanying
Notes to the Consolidated Financial Statements.



Page 4



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FIRST CITIZENS BANCORPORATION, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED (Dollars in thousands)



|                                                                                     |  |                                        |          |   |      |   |          |  
|------------------------------------------------------------------------------------ |  | -------------------------------------- | -------- | - | ---- | - | -------- | -
|                                                                                     |  | For the Nine Months EndedSeptember 30, |         
|                                                                                     |  | 2004                                   |          |   | 2003 |  
|Cash flows from operating activities:                                                |  |                                        |          |   |      |   |          |  
|Net income                                                                           |  | $                                      | 25,295   |   |      | $ | 30,496   |  
|Adjustments to reconcile net income to net cash provided by operating activities:    |  |                                        |          |   |      |   |          |  
|Provision for loan losses                                                            |  |                                        | 5,505    |   |      |   | 7,799    |  
|Depreciation and amortization                                                        |  |                                        | 16,880   |   |      |   | 14,574   |  
|Net accretion of discount on investment securities                                   |  |                                        | 2,479    |   |      |   | 348      |  
|Deferred income tax benefit                                                          |  |                                        | (492     | ) |      |   | (3,163   | )
|Gain on sale of premises and equipment                                               |  |                                        | (130     | ) |      |   | (85      | )
|Decrease in interest receivable                                                      |  |                                        | (1,077   | ) |      |   | (359     | )
|Increase in interest payable                                                         |  |                                        | (989     | ) |      |   | (3,072   | )
|Origination of mortgage loans held-for-resale                                        |  |                                        | (155,739 | ) |      |   | (418,080 | )
|Proceeds from sales of mortgage loans held-for-resale                                |  |                                        | 156,065  |   |      |   | 426,013  |  
|Gain on sale of mortgage loans held-for-resale                                       |  |                                        | (1,845   | ) |      |   | (5,916   | )
|Gain on sale of investment securities                                                |  |                                        | (852     | ) |      |   | (781     | )
|(Increase) decrease in other assets                                                  |  |                                        | (1,036   | ) |      |   | 6,376    |  
|Increase (decrease) in other liabilities                                             |  |                                        | 583      |   |      |   | (4,037   | )
|                                                                                     |  |                                        |          |   |      |   |          |  
|Net cash provided by operating activities                                            |  |                                        | 44,647   |   |      |   | 50,113   |  
|                                                                                     |  |                                        |          |   |      |   |          |  
|Cash flows from investing activities:                                                |  |                                        |          |   |      |   |          |  
|Net increase in loans                                                                |  |                                        | (147,391 | ) |      |   | (252,618 | )
|Calls, maturities and prepayments of investment securities, held-to-maturity         |  |                                        | 6,415    |   |      |   | 24,171   |  
|Purchases of investment securities, held-to-maturity                                 |  |                                        | (3,013   | ) |      |   | (5,520   | )
|Calls, maturities and prepayments of investment securities, available-for-sale       |  |                                        | 472,323  |   |      |   | 370,035  |  
|Purchases of investment securities, available-for-sale                               |  |                                        | (462,205 | ) |      |   | (380,771 | )
|Proceeds from sales of premises and equipment                                        |  |                                        | 450      |   |      |   | 287      |  
|Purchases of premises and equipment                                                  |  |                                        | (26,270  | ) |      |   | (20,174  | )
|Decrease in other real estate owned                                                  |  |                                        | 3,199    |   |      |   | 848      |  
|Increase in intangible assets                                                        |  |                                        | (13      | ) |      |   | (32,700  | )
|Purchase of institution, net of cash acquired                                        |  |                                        |         |   |      |   | 89,155   |  
|                                                                                     |  |                                        |          |   |      |   |          |  
|Net cash provided by investing activities                                            |  |                                        | (156,505 | ) |      |   | (207,287 | )
|                                                                                     |  |                                        |          |   |      |   |          |  
|                                                                                     |  |                                       
|Cash flows from financing activities:                                                |  |                                        |          |   |      |   |          |  
|Net increase in deposits                                                             |  |                                        | 72,425   |   |      |   | 89,801   |  
|Increase in short-term borrowings and securities sold under agreements to repurchase |  |                                        | 36,270   |   |      |   | 17,683   |  
|Increase in long-term debt                                                           |  |                                        | 51,547   |   |      |   |         |  
|Cash dividends paid                                                                  |  |                                        | (1,214   | ) |      |   | (864     | )
|Cash paid to reacquire preferred stock                                               |  |                                        |         |   |      |   | (41      | )
|Cash paid to reacquire common stock                                                  |  |                                        | (3,413   | ) |      |   | (2,146   | )
|                                                                                     |  |                                        |          |   |      |   |          |  
|Net cash provided by financing activities                                            |  |                                        | 155,615  |   |      |   | 104,433  |  
|                                                                                     |  |                                        |          |   |      |   |          |  
|Net increase (decrease) in cash and cash equivalents                                 |  |                                        | 43,757   |   |      |   | (52,741  | )
|Cash and cash equivalents at beginning of period                                     |  |                                        | 221,330  |   |      |   | 287,373  |  
|                                                                                     |  |                                        |          |   |      |   |          |  
|Cash and cash equivalents at end of period                                           |  | $                                      | 265,087  |   |      | $ | 234,632  |  
|                                                                                     |  |                                        |          |   |      |   |          |  



See accompanying
Notes to the Consolidated Financial Statements.



Page 5



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)



SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Dollars in thousands)



A summary of the significant accounting policies of First Citizens Bancorporation, Inc.
(Bancorporation) is set forth in Note 1 to the Consolidated Financial Statements in Bancorporations Annual Report on Form 10-K for 2003. The significant accounting policies used during the current quarter are unchanged from those
disclosed in the 2003 Annual Report.



A. Basis of presentation



The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the United States for interim financial statement preparation. In the opinion of management, all adjustments necessary to present fairly the financial position of Bancorporation
as of and for each of the periods presented, and all adjustments comprising normal recurring accruals necessary for a fair statement of the consolidated financial statements have been recorded. Certain immaterial amounts in prior periods have been
reclassified to conform to the 2004 presentation. Such reclassifications had no material effect on Bancorporations reported consolidated financial position or results of operations.



B. Change in Accounting Principles and Effects of New Accounting Pronouncements



In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of Variable
Interest Entities (FIN 46). This Interpretation provides guidance with respect to the identification of variable interest entities and when the assets, liabilities, noncontrolling interests, and results of operations of a variable
interest entity need to be included in a companys consolidated financial statements. The Interpretation requires consolidation by business enterprises of variable interest entities in cases where the equity investment at risk is not sufficient
to permit the entity to finance its activities without additional subordinated financial support from other parties, which is provided through other interests that will absorb some or all of the expected losses of the entity, or in cases where the
equity investors lack one or more of the essential characteristics of a controlling financial interest, which include the ability to make decisions about the entitys activities through voting rights, the obligations to absorb the expected
losses of the entity if they occur, or the right to receive the expected residual returns of the entity if they occur. Due to significant implementation concerns, the FASB modified the wording of FIN 46 and issued FIN 46R in December of 2003. FIN
46R deferred the effective date for the provisions of FIN 46 for entities other than Special Purpose Entities (SPEs) until financial statements are issued for periods ending after March 15, 2004. As of December 31, 2003 and March 31,
2004, Bancorporation adopted FIN 46 and FIN 46R, respectively. Management has evaluated investments in variable interest entities and potential variable interest entities or transactions, particularly a limited liability partnership involved in
low-income housing development (LIHTC) and trust preferred securities structures because these entities or transactions constitute Bancorporations primary FIN 46 and FIN 46R exposure. Under FIN 46, it was determined that
Bancorporation is not the primary beneficiary of the FCB/SC Capital Trust I or FCB/SC Capital Trust II, each of which issued trust preferred securities. Thus, trust preferred securities related to FCB/SC Capital Trust I were deconsolidated as of
December 31, 2003. FCB/SC Capital Trust II was not outstanding at December 31, 2003. During the quarter ended June 30, 2004, FCB/SC Capital Trust II issued trust preferred securities. As of September 30, 2004, other assets and long-term debt reflect
$3,094 related to FCB/SC Capital Trust I and II in the Consolidated Statements of Condition. Adoption of FIN 46 and FIN 46R did not have a material effect on Bancorporations consolidated financial position or consolidated results of operations
beyond the impact of trust preferred securities because it was determined that Bancorporation is not the primary beneficiary of its LIHTC investments. Bancorporations involvement with variable interest entities is limited to $1.5 million in
outstanding balances in LIHTC investments with no additional monies in future funding commitments. Bancorporation has utilized LIHTC investments to invest in areas serving low to moderate income communities since 2002. Interpretive guidance relating
to FIN 46R is continuing to evolve and Bancorporations management will continue to assess various aspects of consolidations and variable interest entity accounting as additional guidance becomes available.



In December 2003, the Accounting Standards Executive Committee (AcSEC) issued
Statement of Position (SOP) 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer. The SOP is effective for loans acquired in fiscal years beginning after December 15, 2004. The SOP addresses accounting
for differences between contractual cash flows and cash flows expected to be collected from an investors initial investment in loans or debt securities (loans) acquired in a transfer if those differences are attributable, at least in part, to
credit quality. It includes loans acquired in business combinations. The SOP does not apply to loans originated by Bancorporation. Bancorporation intends to adopt the provisions of SOP 03-3 effective January 1, 2005, and does not expect the initial
implementation to have a significant impact on Bancorporations consolidated financial position or consolidated results of operations.



Page 6



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (continued)



On March 9, 2004, the SEC Staff issued Staff Accounting Bulletin No. 105, Application
of Accounting Principles to Loan Commitments (SAB 105). SAB 105 clarifies existing accounting practices relating to the valuation of issued loan commitments, including interest rate lock commitments (IRLC), subject to
Derivative Implementation Group Issue C-13, When a Loan Commitment is included in the Scope of Statement 133, by requiring all registrants to begin accounting for these commitments subject to SFAS No. 133. Furthermore, SAB 105 disallows
the inclusion of the values of a servicing component and other internally developed intangible assets in the initial and subsequent IRLC valuation. The provisions of SAB 105 were effective for loan commitments entered into after March 31, 2004. The
implementation did not have a material impact on Bancorporations results of operations.



In the second quarter of 2004, the Emerging Issues Task Force (EITF) released EITF Issue 03-01, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments. The
Issue provided guidance for evaluating whether an investment is other-than-temporarily impaired and requires certain disclosures with respect to these investments. On September 30, 2004, the FASB Staff Position (FSP) EITF Issue 03-1-1,
Effective Date of Paragraph 10-20 of EITF Issue 03-1, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments. This Staff Position delayed certain measurement and recognition provisions of EITF
03-1. On September 30, 2004, Bancorporation held certain investments having continuous unrealized loss positions for more than 12 months with a fair market value totaling $28,750 and an unrealized loss position totaling $263. Substantially all of
these investments were in U.S. government agency obligations, the cash flows of which are guaranteed by the U.S. government or its agencies and, therefore, is expected that the securities would not be settled at a price less than their amortized
cost. Because the decline in market value was caused by interest rate increases and not credit quality, and because Bancorporation has the ability and intent to hold these investments until a recovery of fair value, which may be maturity,
Bancorporation has not recognized any other-than-temporary impairment in connection with these investments.



C. Goodwill and Other Intangibles (Dollars in thousands)



In accordance with SFAS No.142, no goodwill amortization was recorded for the quarter or nine months ended September 30, 2004. The changes in the carrying amount of goodwill for the nine months ended September 30,
2004, and the year ended December 31, 2003 are as follows:



|                             |  |   |        |  
|---------------------------- |  | - | ------ | -
|Balance, January 1, 2003     |  | $ | 4,479  |  
|First Banks acquisition      |  |   | 20,161 |  
|Purchase price adjustments * |  |   | 683    |  
|                             |  |   |        |  
|Balance, September 30, 2003  |  |   | 25,323 |  
|Purchase price adjustments * |  |   | (798   | )
|                             |  |   |        |  
|Balance, December 31, 2003   |  |   | 24,525 |  
|Purchase price adjustments * |  |   | 24     |  
|                             |  |   |        |  
|Balance, September 30, 2004  |  | $ | 24,549 |  
|                             |  |   |        |  

---

|* | The purchase price adjustments above reflect adjustments to the purchase price subsequent to the date of the acquisition.
|- | -------------------------------------------------------------------------------------------------------------------------



The following table relates to the carrying values of core deposit intangibles recorded in
Bancorporations consolidated financial statements, all of which are being amortized:



|                         |  |                        |         |   |                       |   |         |                         |  |   |         |  
|------------------------ |  | ---------------------- | ------- | - | --------------------- | - | ------- | ----------------------- |  | - | ------- | -
|                         |  | As ofSeptember 30,2004 |         |   | As ofDecember 31,2003 |   |         | As ofSeptember 30, 2003 | 
|Gross carrying value     |  | $                      | 117,767 |   |                       | $ | 117,778 |                         |  | $ | 117,756 |  
|Accumulated amortization |  |                        | (85,129 | ) |                       |   | (78,360 | )                       |  |   | (75,953 | )
|                         |  |                        |         |   |                       |   |         |                         |  |   |         |  
|Balance at end of period |  | $                      | 32,638  |   |                       | $ | 39,418  |                         |  | $ | 41,803  |  
|                         |  |                        |         |   |                       |   |         |                         |  |   |         |  



Amortization expense on core deposit
intangibles was $6,768 and $5,917 for the nine months ended September 30, 2004 and 2003, respectively. Amortization expense on core deposit intangibles was $2,252 and $2,242 for the quarters ended September 30, 2004 and 2003, respectively. The
increase in amortization expense for the nine months ended September 30, 2004 and 2003 is primarily due to an increase in core deposit intangibles related to acquisitions completed in 2003. There have been no acquisitions in 2004.



Page 7



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (continued)



Bancorporation projects the following aggregate amortization expense based on existing core
deposit intangibles for each of the next five years:



For the year ended
December 31:

|     |  |   |      
|---- |  | - | -----
|2004 |  | $ | 9,020
|2005 |  |   | 7,620
|2006 |  |   | 5,947
|2007 |  |   | 5,186
|2008 |  |   | 4,898



Mortgage servicing rights as of
September 30, 2004, December 31, 2003 and September 30, 2003 were $6,457, $6,458, and $6,344, respectively.



For the quarter ended September 30, 2004, amortization expense related to mortgage servicing rights, included as a reduction of mortgage income in the Consolidated Statements of Income, was $855, consisting of $452 in
impairment charges with the remainder consisting of normal amortization. For the quarter ended September 30, 2003, Bancorporation had negative amortization of $1,078 due to the recapture of $1,546 of previously recorded impairment, partially offset
by normal amortization.



Amortization expense related to mortgage servicing
rights, included as a reduction of mortgage income in the Consolidated Statements of Income, was $1,130 and $1,588 for the nine months ended September 30, 2004 and 2003, respectively. Amortization expense was reduced for $229 of net recapture of
impairment of mortgage servicing rights for the nine months ended September 30, 2004. For the nine months ended September 30, 2003, amortization expense was increased by $255 for impairment of mortgage servicing rights. Normal amortization was
$1,359 and $1,333 for the nine months ended September 30, 2004 and 2003, respectively.



D. Mergers and Acquisitions (Dollars in thousands)



There were
no mergers or acquisitions completed during the nine months ended September 30, 2004. See Subsequent Events for pending acquisitions.



E. Employee benefits (Dollars in thousands)



The following table details the components of pension expense recognized as a component of salaries and employee benefits in Bancorporations Consolidated Statements
of Income:



|                                    |  |                                    |        |   |                                        |   |      |      |  |   |        |   |  |   |        |  
|----------------------------------- |  | ---------------------------------- | ------ | - | -------------------------------------- | - | ---- | ---- |  | - | ------ | - |  | - | ------ | -
|                                    |  | For the Quarter EndedSeptember 30, |        |   | For the Nine Months EndedSeptember 30, |  
|                                    |  | 2004                               |        |   | 2003                                   |   |      | 2004 |  |   | 2003   |  
|Service costs                       |  | $                                  | 813    |   |                                        | $ | 651  |      |  | $ | 2,415  |   |  | $ | 1,954  |  
|Interest costs                      |  |                                    | 837    |   |                                        |   | 770  |      |  |   | 2,486  |   |  |   | 2,312  |  
|Expected return on plan assets      |  |                                    | (1,024 | ) |                                        |   | (907 | )    |  |   | (3,043 | ) |  |   | (2,722 | )
|Amortization of prior service costs |  |                                    |       |   |                                        |   | 21   |      |  |   |       |   |  |   | 62     |  
|Recognized net actuarial loss       |  |                                    | 274    |   |                                        |   | 234  |      |  |   | 815    |   |  |   | 703    |  
|                                    |  |                                    |        |   |                                        |   |      |      |  |   |        |   |  |   |        |  
|Net pension expense                 |  | $                                  | 900    |   |                                        | $ | 769  |      |  | $ | 2,673  |   |  | $ | 2,309  |  
|                                    |  |                                    |        |   |                                        |   |      |      |  |   |        |   |  |   |        |  



Bancorporation previously disclosed in
its consolidated financial statements for the year ended December 31, 2003 that the estimated employer contributions for 2004 was $3,710. In April 2004, Bancorporation made its entire 2004 contribution of $3,528.



Page 8



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (continued)



F. Earnings per share (Dollars in thousands, except per share data)



Bancorporations basic and diluted earnings per common share were calculated as
follows:



|                                                             |  |                                    |         |   |                                        |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------------------ |  | ---------------------------------- | ------- | - | -------------------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                             |  | For the Quarter EndedSeptember 30, |         |   | For the Nine Months EndedSeptember 30, |  
|                                                             |  | 2004                               |         |   | 2003                                   |   |         | 2004 |  |   | 2003    |  
|Net income                                                   |  | $                                  | 8,890   |   |                                        | $ | 10,236  |      |  | $ | 25,295  |   |  | $ | 30,496  |  
|Less: Preferred stock dividends                              |  |                                    | (40     | ) |                                        |   | (40     | )    |  |   | (121    | ) |  |   | (122    | )
|Plus: Preferred stock redemption excess consideration        |  |                                    |        |   |                                        |   |        |      |  |   |        |   |  |   | 21      |  
|                                                             |  |                                    |         |   |                                        |   |         |      |  |   |         |   |  |   |         |  
|Net income applicable to common stock                        |  | $                                  | 8,850   |   |                                        | $ | 10,196  |      |  | $ | 25,174  |   |  | $ | 30,395  |  
|                                                             |  |                                    |         |   |                                        |   |         |      |  |   |         |   |  |   |         |  
|Weighted average common shares outstanding-basic and diluted |  |                                    | 899,899 |   |                                        |   | 907,075 |      |  |   | 902,760 |   |  |   | 909,045 |  
|Net income per common share-basic and diluted                |  | $                                  | 9.83    |   |                                        | $ | 11.24   |      |  | $ | 27.89   |   |  | $ | 33.44   |  



G. Long-term debt (Dollars in
thousands)



On May 7, 2004, Bancorporation completed the sale of trust
preferred securities in the aggregate amount of $50,000. The securities were issued by FCB/SC Capital Trust II, an unconsolidated statutory trust subsidiary (Cap Trust II) formed by Bancorporation, and were sold in a private transaction
pursuant to an applicable exemption from registration under the Securities Act of 1933, as amended (the Act). These trust preferred securities have a variable rate of interest set at 3 month LIBOR plus 2.25% which will reset quarterly.
The principal assets of Cap Trust II will mature on June 15, 2034. The principal amount of these securities can be prepaid at par, subject to possible regulatory approval, in whole or part at any time on or after June 15, 2009. Additionally, Cap
Trust II has issued to Bancorporation $1,547 in common securities which constitute all of Cap Trust IIs common outstanding securities.



These trust preferred securities are included in Tier I capital for regulatory capital adequacy purposes. The obligations of Bancorporation with respect to the issuance
of these trust preferred securities constitute a full and unconditional guarantee by Bancorporation of Cap Trust IIs obligations with respect to the trust preferred securities.



H. Subsequent events (Dollars in thousands, except share data)



On October 18, 2004, Bancorporation announced that First Citizens Bank and Trust Company, Inc. (the Bank) had signed a
definitive agreement to acquire Peoples Community Capital Corporation (Peoples), parent company of Peoples Community Bank of South Carolina. The Bank will pay $30 per share for all of the outstanding common stock of
Peoples. As of September 30, 2004, Peoples had total assets of $126 million, total deposits of $103 million and 1,179,237 shares of common stock outstanding.



On October 21, 2004, Bancorporations Board of Directors declared a $.35 dividend on common stock to shareholders of record on November
15, 2004, payable November 24, 2004.



Item 2. Managements Discussion
and Analysis of Financial Condition and Results of Operations



Forward-Looking Statements



This discussion may contain
statements that could be deemed forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act, which statements are inherently subject to risks and uncertainties.
Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results, or otherwise are not statements of historical fact. Such statements are often characterized by the use of the
qualifying words (and their derivatives) such as expect, believe, estimate, plan, project, anticipate, or other statements concerning opinions or judgments of Bancorporation and
its management about future events. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to, the financial success or changing strategies of Bancorporations customers, competition, deposit
attrition, actions of government regulators, the level of market interest rates, and general economic conditions.



Page 9



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)



Critical Accounting Policies



The accounting and reporting policies of Bancorporation and its subsidiaries are in
accordance with accounting principles generally accepted in the United States and conform to general practices within the banking industry. Bancorporations financial position and results of operations are affected by managements
application of accounting policies, including judgments made to arrive at the carrying value of assets and liabilities and amounts reported for revenues, expenses and related disclosures. Different assumptions in the application of these policies
could result in material changes in Bancorporations consolidated financial position and/or consolidated results of operations. The more critical accounting and reporting policies include Bancorporations accounting for the allowance for
loan losses, valuation of mortgage servicing rights, pension, goodwill and intangible assets associated with mergers and acquisitions, and income taxes. Bancorporations accounting policies are fundamental to understanding Managements
Discussion and Analysis of Financial Condition and Results of Operations. Accordingly, Bancorporations significant accounting policies are discussed in detail in Bancorporations 2003 Annual Report on Form 10-K filed with the Securities
and Exchange Commission.



EXECUTIVE OVERVIEW OF THIRD QUARTER
RESULTS AND CURRENT TRENDS



Third quarter earnings experienced continued
pressure from net interest margin compression and a decline in mortgage refinancing activity. Net interest income continues to experience pressure caused by the current low interest rate environment. In addition, noninterest income has been hampered
by a significant decline in mortgage refinancing activity. Consequently, growth in net interest income has not been sufficient to offset the decline in noninterest income and the increase in noninterest expense. Bancorporation expects that it will
continue to experience margin compression if interest rates remain at their current low levels. Credit quality remained strong during the quarter.



Reference should be made to the remainder of this Managements Discussion and Analysis and to the consolidated financial statements with respect to more detailed
information about the financial condition and operating results of Bancorporation.



RESULTS OF OPERATIONS



Summary
(Dollars in thousands, except share data)



Net income for the quarter and
nine months ended September 30, 2004 was $8,890 and $25,295, respectively. Net income per common share (basic and diluted) was $9.83 and $27.89 for the quarter and nine months ended September 30, 2004, respectively. Net income for the quarter and
nine months ended September 30, 2003 was $10,236 and $30,496, respectively. Net income per common share (basic and diluted) was $11.24 and $33.44, respectively. See calculation of earnings per share in the Notes to the Consolidated Financial
Statements.



Net interest income increased by $656 or by 1.72% over the
comparable quarter in 2003 and by $3,245 or by 2.93% over the comparable nine-month period in 2003 primarily due to loan growth and the acquisition of First Banks on April 1, 2003. The positive effect of loan growth was significantly offset by the
decline in the yield on earning assets for both periods. See Table 2 and Net interest income in Managements Discussion and Analysis of Financial Condition and Results of Operations for a detailed analysis and discussion of net
interest income.



For the quarter ended September 30, 2004, noninterest income
decreased by $4,073, or by 23.84% during the comparable period in 2003, while noninterest expense increased by $1,950, or by 5.63% over the comparable period in 2003. Noninterest income decreased by $3,458, or by 7.65%, while noninterest expense
increased by $10,427, or by 10.37% for the comparable nine-month period. See Noninterest income and expense in Managements Discussion and Analysis of Financial Condition and Results of Operations for a detailed discussion of
noninterest income and expense.



Return on average stockholders equity
and average assets are key measures of earnings performance. Return on average stockholders equity for the quarters ended September 30, 2004 and September 30, 2003 was 10.00% and 12.49%, respectively. Return on average stockholders
equity for the nine months ended September 30, 2004 and September 30, 2003 was 9.65% and 12.84%, respectively. Return on average assets decreased from 0.97% for the quarter ended September 30, 2003 to 0.79% for the quarter ended September 30, 2004.
Return on average assets decreased from 1.01% for the nine months ended September 30, 2003 to 0.76% for the nine months ended September 30, 2004. The declines in return on average assets and in return on average stockholders equity for both
periods were primarily due to net interest margin compression and a decline in mortgage income. See Noninterest income and expense in Managements Discussion and Analysis of Financial Condition and Results of Operations for a
detailed discussion of noninterest income and expense.



Page 10



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)



Table 1 provides summary information on selected ratios and average and year-to-date
balances.



Table 1: Selected Summary Information (Dollars in thousands,
except per share data)



|                                                                        |  |                                               |           |   |                                                  |   |           |      |  |   |           |   |  |   |           |  
|----------------------------------------------------------------------- |  | --------------------------------------------- | --------- | - | ------------------------------------------------ | - | --------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                                        |  | As of and for the Quarter Ended September 30, |           |   | As of and for the Nine Months EndedSeptember 30, |  
|                                                                        |  | 2004                                          |           |   | 2003                                             |   |           | 2004 |  |   | 2003      |  
|Selected ratios:                                                        |  |                                               |           |   |                                                  |   |           |      |  |   |           |   |  |   |           |  
|Return on average assets                                                |  |                                               | 0.79      | % |                                                  |   | 0.97      | %    |  |   | 0.76      | % |  |   | 1.01      | %
|Return on average stockholders equity                                  |  |                                               | 10.00     | % |                                                  |   | 12.49     | %    |  |   | 9.65      | % |  |   | 12.84     | %
|Net interest income to average interest-earning assets (tax equivalent) |  |                                               | 3.78      | % |                                                  |   | 3.98      | %    |  |   | 3.77      | % |  |   | 4.01      | %
|Average loans to average deposits                                       |  |                                               | 81.02     | % |                                                  |   | 77.71     | %    |  |   | 79.47     | % |  |   | 75.06     | %
|Allowance for loan losses to total loans                                |  |                                               | 1.69      | % |                                                  |   | 1.77      | %    |  |   | 1.69      | % |  |   | 1.77      | %
|Average stockholders equity to average total assets                    |  |                                               | 7.90      | % |                                                  |   | 7.80      | %    |  |   | 7.89      | % |  |   | 7.85      | %
|Average common stockholders equity to average total assets             |  |                                               | 7.83      | % |                                                  |   | 7.73      | %    |  |   | 7.82      | % |  |   | 7.77      | %
|                                                                        |  |                                               |           |  
|Dividends per common share                                              |  | $                                             | 0.35      |   |                                                  | $ | 0.35      |      |  | $ | 1.05      |   |  | $ | 0.85      |  
|Total risk-based capital ratio                                          |  |                                               | 13.96     | % |                                                  |   | 11.91     | %    |  |   | 13.96     | % |  |   | 11.91     | %
|Tier I risk-based capital ratio                                         |  |                                               | 12.22     | % |                                                  |   | 10.06     | %    |  |   | 12.22     | % |  |   | 10.06     | %
|Tier I leverage ratio                                                   |  |                                               | 8.69      | % |                                                  |   | 7.18      | %    |  |   | 8.69      | % |  |   | 7.18      | %
|                                                                        |  |                                               |           |  
|Selected average balances:                                              |  |                                               |           |   |                                                  |   |           |      |  |   |           |   |  |   |           |  
|Total assets                                                            |  | $                                             | 4,473,202 |   |                                                  | $ | 4,167,713 |      |  | $ | 4,438,467 |   |  | $ | 4,048,158 |  
|Interest-earning assets                                                 |  |                                               | 4,096,434 |   |                                                  |   | 3,821,412 |      |  |   | 4,060,796 |   |  |   | 3,715,693 |  
|Investment securities                                                   |  |                                               | 897,088   |   |                                                  |   | 916,595   |      |  |   | 907,870   |   |  |   | 925,213   |  
|Loans                                                                   |  |                                               | 3,071,607 |   |                                                  |   | 2,783,423 |      |  |   | 3,013,341 |   |  |   | 2,614,499 |  
|Deposits                                                                |  |                                               | 3,791,227 |   |                                                  |   | 3,582,033 |      |  |   | 3,791,867 |   |  |   | 3,483,036 |  
|Noninterest-bearing deposits                                            |  |                                               | 712,241   |   |                                                  |   | 655,881   |      |  |   | 688,000   |   |  |   | 621,948   |  
|Interest-bearing deposits                                               |  |                                               | 3,078,986 |   |                                                  |   | 2,926,152 |      |  |   | 3,103,867 |   |  |   | 2,861,088 |  
|Interest-bearing liabilities                                            |  |                                               | 3,382,019 |   |                                                  |   | 3,160,403 |      |  |   | 3,374,552 |   |  |   | 3,080,997 |  
|Stockholders equity                                                    |  |                                               | 353,555   |   |                                                  |   | 325,128   |      |  |   | 349,995   |   |  |   | 317,638   |  
|                                                                        |  |                                               |           |  
|Selected period end balances:                                           |  |                                               |           |   |                                                  |   |           |      |  |   |           |   |  |   |           |  
|Total assets                                                            |  |                                               |           |   |                                                  |   |           |      |  | $ | 4,478,206 |   |  | $ | 4,220,574 |  
|Interest-earning assets                                                 |  |                                               |           |   |                                                  |   |           |      |  |   | 4,101,964 |   |  |   | 3,862,089 |  
|Investment securities                                                   |  |                                               |           |   |                                                  |   |           |      |  |   | 900,754   |   |  |   | 924,311   |  
|Loans                                                                   |  |                                               |           |   |                                                  |   |           |      |  |   | 3,081,307 |   |  |   | 2,849,806 |  
|Deposits                                                                |  |                                               |           |   |                                                  |   |           |      |  |   | 3,787,002 |   |  |   | 3,650,293 |  
|Noninterest-bearing deposits                                            |  |                                               |           |   |                                                  |   |           |      |  |   | 729,289   |   |  |   | 676,486   |  
|Interest-bearing deposits                                               |  |                                               |           |   |                                                  |   |           |      |  |   | 3,057,713 |   |  |   | 2,973,807 |  
|Interest-bearing liabilities                                            |  |                                               |           |   |                                                  |   |           |      |  |   | 3,368,208 |   |  |   | 3,194,207 |  
|Stockholders equity                                                    |  |                                               |           |   |                                                  |   |           |      |  |   | 356,138   |   |  |   | 329,532   |  



Page 11



---

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)



Net interest income (Dollars in thousands)



Net interest income represents the principal source of earnings for Bancorporation. Tables 2
and 3 compare average balance sheet items and analyze net interest income on a tax equivalent basis for the quarters and nine months ended September 30, 2004 and 2003.



Table 2: Comparative Average Balance Sheets and Tax Equivalent Rate/Volume Variance (Dollars in thousands)



As of and for the Quarter Ended September 30,



|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|---------------------------------------------- |  | --------------- | --------- | -------------------- | - | ----------- |  | ---- | ----------------- | ---- | - | ----------------------- | ---- | ---- | - | ---------- | ---- | - | ------ | - | ------ | - |  | - | ----- | - |  | - | ----- | -
|                                               |  | Average Balance |           | Interest Inc/Exp (1) |   | Yield/ Rate |  |      | Change Due To (2) |      |   | Net Increase (Decrease) |     
|                                               |  | 2004            |           | 2003                 |   | 2004        |  | 2003 |                   | 2004 |   |                         | 2003 |      |   | Yield/Rate |      |   | Volume |   |       
|Interest-earning assets:                       |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Loans (3)                                      |  | $               | 3,071,607 |                      | $ | 2,783,423   |  | $    | 45,207            |      | $ | 43,649                  |      | 5.86 | % |            | 6.22 | % |        | $ | (2,664 | ) |  | $ | 4,222 |   |  | $ | 1,558 |  
|Investment securities:                         |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Taxable                                        |  |                 | 888,136   |                      |   | 904,668     |  |      | 5,151             |      |   | 5,805                   |      | 2.31 |   |            | 2.55 |   |        |   | (559   | ) |  |   | (95   | ) |  |   | (654  | )
|Non-taxable                                    |  |                 | 8,952     |                      |   | 11,927      |  |      | 140               |      |   | 210                     |      | 6.26 |   |            | 7.04 |   |        |   | (23    | ) |  |   | (47   | ) |  |   | (70   | )
|Federal funds sold                             |  |                 | 127,739   |                      |   | 121,394     |  |      | 442               |      |   | 299                     |      | 1.38 |   |            | 0.98 |   |        |   | 121    |   |  |   | 22    |   |  |   | 143   |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Total interest-earning assets                  |  |                 | 4,096,434 |                      |   | 3,821,412   |  |      | 50,940            |      |   | 49,963                  |      | 4.95 |   |            | 5.19 |   |        |   | (3,125 | ) |  |   | 4,102 |   |  |   | 977   |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Noninterest-earning assets:                    |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Cash and due from banks                        |  |                 | 150,416   |                      |   | 143,127     |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Premises and equipment                         |  |                 | 150,864   |                      |   | 125,908     |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Other, less allowance for loan losses          |  |                 | 75,488    |                      |   | 77,266      |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Total noninterest-earning assets               |  |                 | 376,768   |                      |   | 346,301     |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Total assets                                   |  | $               | 4,473,202 |                      | $ | 4,167,713   |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Interest-bearing liabilities:                  |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Deposits                                       |  | $               | 3,078,986 |                      | $ | 2,926,152   |  | $    | 9,451             |      | $ | 9,865                   |      | 1.22 | % |            | 1.34 | % |        | $ | (880   | ) |  | $ | 466   |   |  | $ | (414  | )
|Securities sold under agreements to repurchase |  |                 | 180,618   |                      |   | 161,894     |  |      | 611               |      |   | 338                     |      | 1.35 |   |            | 0.83 |   |        |   | 210    |   |  |   | 63    |   |  |   | 273   |  
|Long-term debt                                 |  |                 | 122,415   |                      |   | 72,357      |  |      | 1,955             |      |   | 1,460                   |      | 6.39 |   |            | 8.07 |   |        |   | (305   | ) |  |   | 800   |   |  |   | 495   |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Total interest-bearing liabilities             |  |                 | 3,382,019 |                      |   | 3,160,403   |  |      | 12,017            |      |   | 11,663                  |      | 1.41 |   |            | 1.47 |   |        |   | (975   | ) |  |   | 1,329 |   |  |   | 354   |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Noninterest-bearing liabilities:               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Demand deposits                                |  |                 | 712,241   |                      |   | 655,881     |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Other liabilities                              |  |                 | 25,387    |                      |   | 26,301      |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Total noninterest-bearing liabilities          |  |                 | 737,628   |                      |   | 682,182     |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Total liabilities                              |  |                 | 4,119,647 |                      |   | 3,842,585   |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Stockholders equity                           |  |                 | 353,555   |                      |   | 325,128     |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Total liabilities and stockholders equity     |  | $               | 4,473,202 |                      | $ | 4,167,713   |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Net interest spread                            |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      | 3.54 | % |            | 3.72 | % |        |   |        |   |  |   |       |   |  |   |       |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|Net interest income:                           |  |                 |           |                      |   |             |  | $    | 38,923            |      | $ | 38,300                  |      |      |   |            |      |   |        | $ | (2,150 | ) |  | $ | 2,773 |   |  | $ | 623   |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|to average assets                              |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      | 3.46 | % |            | 3.65 | % |        |   |        |   |  |   |       |   |  |   |       |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  
|to average interest-earning assets             |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      | 3.78 | % |            | 3.98 | % |        |   |        |   |  |   |       |   |  |   |       |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                         |      |      |   |            |      |   |        |   |        |   |  |   |       |   |  |   |       |  

---

|(1) | Non-taxable interest income has been adjusted to a tax equivalent amount using the incremental statutory federal income tax rate of 35%. The net tax equivalent adjustment amounts
included in the above table were $212 and $245 for the quarters ended September 30, 2004 and 2003, respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Yield/rate-volume changes have been allocated to each category based on the percentage of each to the total change.
|--- | -------------------------------------------------------------------------------------------------------------------

|(3) | Nonaccrual loans are included in the average loan balances. Interest income on nonaccrual loans is generally recognized on a cash basis.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------



Page 12



---

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)



Table 3: Comparative Average Balance Sheets and Tax Equivalent Rate/Volume Variance
(Dollars in thousands)



As of and for the Nine Months
Ended September 30,



|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|---------------------------------------------- |  | --------------- | --------- | -------------------- | - | ----------- |  | ---- | ----------------- | ---- | - | ---------------------- | ---- | ---- | - | ----------- | ---- | - | ------ | - | ------- | - |  | - | ------ | - |  | - | ------ | -
|                                               |  | Average Balance |           | Interest Inc/Exp (1) |   | Yield/ Rate |  |      | Change Due To (2) |      |   | NetIncrease (Decrease) |     
|                                               |  | 2004            |           | 2003                 |   | 2004        |  | 2003 |                   | 2004 |   |                        | 2003 |      |   | Yield/ Rate |      |   | Volume |   |        
|Interest-earning assets:                       |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Loans (3)                                      |  | $               | 3,013,341 |                      | $ | 2,614,499   |  | $    | 132,043           |      | $ | 127,528                |      | 5.85 | % |             | 6.52 | % |        | $ | (12,984 | ) |  | $ | 17,499 |   |  | $ | 4,515  |  
|Investment securities:                         |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Taxable                                        |  |                 | 898,143   |                      |   | 912,744     |  |      | 15,245            |      |   | 19,472                 |      | 2.27 |   |             | 2.85 |   |        |   | (3,978  | ) |  |   | (249   | ) |  |   | (4,227 | )
|Non-taxable                                    |  |                 | 9,727     |                      |   | 12,469      |  |      | 469               |      |   | 633                    |      | 6.43 |   |             | 6.77 |   |        |   | (32     | ) |  |   | (132   | ) |  |   | (164   | )
|Federal funds sold                             |  |                 | 139,585   |                      |   | 175,981     |  |      | 1,139             |      |   | 1,510                  |      | 1.09 |   |             | 1.15 |   |        |   | (73     | ) |  |   | (298   | ) |  |   | (371   | )
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Total interest-earning assets                  |  |                 | 4,060,796 |                      |   | 3,715,693   |  |      | 148,896           |      |   | 149,143                |      | 4.90 |   |             | 5.37 |   |        |   | (17,067 | ) |  |   | 16,820 |   |  |   | (247   | )
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Noninterest-earning assets:                    |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Cash and due from banks                        |  |                 | 155,686   |                      |   | 142,228     |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Premises and equipment                         |  |                 | 144,921   |                      |   | 118,534     |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Other, less allowance for loan losses          |  |                 | 77,064    |                      |   | 71,703      |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Total noninterest-earning assets               |  |                 | 377,671   |                      |   | 332,465     |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Total assets                                   |  | $               | 4,438,467 |                      | $ | 4,048,158   |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Interest-bearing liabilities:                  |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Deposits                                       |  | $               | 3,103,867 |                      | $ | 2,861,088   |  | $    | 27,890            |      | $ | 32,703                 |      | 1.20 | % |             | 1.53 | % |        | $ | (6,998  | ) |  | $ | 2,185  |   |  | $ | (4,813 | )
|Securities sold under agreements to repurchase |  |                 | 171,484   |                      |   | 153,890     |  |      | 1,291             |      |   | 1,070                  |      | 1.01 |   |             | 0.93 |   |        |   | 88      |   |  |   | 133    |   |  |   | 221    |  
|Long-term debt                                 |  |                 | 99,201    |                      |   | 66,019      |  |      | 5,214             |      |   | 3,992                  |      | 7.01 |   |             | 8.06 |   |        |   | (523    | ) |  |   | 1,745  |   |  |   | 1,222  |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Total interest-bearing liabilities             |  |                 | 3,374,552 |                      |   | 3,080,997   |  |      | 34,395            |      |   | 37,765                 |      | 1.36 |   |             | 1.64 |   |        |   | (7,433  | ) |  |   | 4,063  |   |  |   | (3,370 | )
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Noninterest-bearing liabilities:               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Demand deposits                                |  |                 | 688,000   |                      |   | 621,948     |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Other liabilities                              |  |                 | 25,920    |                      |   | 27,575      |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Total noninterest-bearing liabilities          |  |                 | 713,920   |                      |   | 649,523     |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Total liabilities                              |  |                 | 4,088,472 |                      |   | 3,730,520   |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Stockholders equity                           |  |                 | 349,995   |                      |   | 317,638     |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Total liabilities and stockholders equity     |  | $               | 4,438,467 |                      | $ | 4,048,158   |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Net interest spread                            |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      | 3.54 | % |             | 3.73 | % |        |   |         |   |  |   |        |   |  |   |        |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|Net interest income:                           |  |                 |           |                      |   |             |  | $    | 114,501           |      | $ | 111,378                |      |      |   |             |      |   |        | $ | (9,634  | ) |  | $ | 12,757 |   |  | $ | 3,123  |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|to average assets                              |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      | 3.45 | % |             | 3.68 | % |        |   |         |   |  |   |        |   |  |   |        |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  
|to average interest-earning assets             |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      | 3.77 | % |             | 4.01 | % |        |   |         |   |  |   |        |   |  |   |        |  
|                                               |  |                 |           |                      |   |             |  |      |                   |      |   |                        |      |      |   |             |      |   |        |   |         |   |  |   |        |   |  |   |        |  

---

|(1) | Non-taxable interest income has been adjusted to a tax equivalent amount using the incremental statutory federal income tax rate of 35%. The net tax equivalent adjustment amounts
included in the above table were $641 and $763 for the nine months ended September 30, 2004 and 2003, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Yield/rate-volume changes have been allocated to each category based on the percentage of each to the total change.
|--- | -------------------------------------------------------------------------------------------------------------------

|(3) | Nonaccrual loans are included in the average loan balances. Interest income on nonaccrual loans is generally recognized on a cash basis.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------



Page 13



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)





Net
interest income (continued)



Current quarter compared to prior year
quarter



Net interest income on a tax equivalent basis increased $623
or by 1.63% for the quarter ended September 30, 2004, over the comparable quarter in 2003. The increase in net interest income was due to a 7.20% increase in average earning assets, which was partially offset by a decline in the yield on
interest-earning assets.



Net interest income to average interest-earning
assets decreased from 3.98% for the quarter ended September 30, 2003 to 3.78% for the quarter ended September 30, 2004. This was primarily attributable to a decrease in the net interest spread from 3.72% for the quarter ended September 30, 2003 to
3.54% for the quarter ended September 30, 2004. The decrease in the net interest spread was due to the decrease in the ratio of interest income to interest-earning assets exceeding the decrease in the ratio of interest expense to interest-bearing
liabilities. The yield on interest-earning assets decreased from 5.19% for the quarter ended September 30, 2003 to 4.95% for the quarter ended September 30, 2004, or by 24 basis points, while the cost of interest-bearing liabilities decreased from
1.47% to 1.41%, or by 6 basis points. The decrease in the yield on interest-earning assets was primarily due to decreases in the yields on loans (from 6.22% for the quarter ended September 30, 2003 to 5.86% for the quarter ended September 30, 2004)
and investment securities (from 2.60% for the quarter ended September 30, 2003 to 2.35% for the quarter ended September 30, 2004). The decrease in the cost of interest-bearing liabilities was primarily due to a decrease in the rates paid on
interest-bearing deposits (from 1.34% for the quarter ended September 30, 2003 to 1.22% for the quarter ended September 30, 2004). The decrease in the cost of interest-bearing liabilities was partially offset by an increase in the rate paid on
securities sold under agreements to repurchase (repos) and an increase in the proportion of interest-bearing liabilities represented by long-term debt. Rates paid on repos have increased due to an increase in rates on the short end of the yield
curve (rates on repos are tied to the three-year treasury). Decreases in yields on interest-earning assets have occurred as rates have declined significantly on new loans and investment securities added to replace loans that had refinanced or paid
off and investment securities that matured, were called or sold. Decreases in rates paid on interest-bearing deposits are primarily due to lower rates paid on new and matured time deposits.



Current year-to-date period compared to prior year-to-date period



Net interest income on a tax equivalent basis increased $3,123 or by 2.80% for the nine
months ended September 30, 2004, over the comparable period in 2003. The increase in net interest income was due to 9.29% average earning asset growth, which was partially offset by a decline in net interest income to average interest-earning
assets.



Net interest income to average interest-earning assets decreased from
4.01% for the nine months ended September 30, 2003 to 3.77% for the nine months ended September 30, 2004. This was primarily attributable to a decrease in the net interest spread from 3.73% for the nine months ended September 30, 2003 to 3.54% for
the nine months ended September 30, 2004. The decrease in the net interest spread was due to the decrease in the yield on interest-earning assets exceeding the decrease in the cost of interest-bearing liabilities. The yield on interest-earning
assets decreased from 5.37% for the nine months ended September 30, 2003 to 4.90% for the nine months ended September 30, 2004, or by 47 basis points, while the cost of interest-bearing liabilities decreased from 1.64% to 1.36%, or by 28 basis
points. The decrease in the yield on interest-earning assets was primarily due to decreases in the yields on loans (from 6.52% for the nine months ended September 30, 2003 to 5.85% for the nine months ended September 30, 2004) and investment
securities (from 2.91% for the nine months ended September 30, 2003 to 2.31% for the nine months ended September 30, 2004). The decrease in the cost of interest-bearing liabilities was primarily due to a decrease in the rates paid on
interest-bearing deposits (from 1.53% for the nine months ended September 30, 2003 to 1.20% for the nine months ended September 30, 2004). Decreases in yields on interest-earning assets have occurred as rates have declined significantly on new loans
and investment securities added to replace loans that had refinanced or paid off and investment securities that matured, were called or sold. Decreases in rates paid on interest-bearing deposits are primarily due to lower rates paid on new and
matured time deposits.



Page 14



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)





Noninterest income and expense (Dollars in thousands)



Current quarter compared to prior year quarter



Noninterest income decreased by $4,073 or by 23.84% for the quarter ended September 30, 2004, compared to the same period in 2003. The most significant component of the decline in noninterest income was mortgage income. Mortgage income
declined by $3,338 or by 82.99% primarily due to impairment on mortgage servicing rights as a result of decreased interest rates since the second quarter 2004 and a decline in gain on sale of loans. The decrease in mortgage income included a $1,941
decrease in servicing income and a $1,397 decrease in the gain on sale of mortgage loans held for sale. Mortgage servicing income declined primarily due to a $452 impairment charge for the quarter ended September 30, 2004, compared to a $1,546
recapture of impairment recorded during the quarter ended September 30, 2003. The decline in the gain on sale of mortgage loans held for sale was primarily due to a decline in the volume of mortgage loans originated and sold into the secondary
market during the quarter. Originations of mortgage loans held for sale declined by $107,588, or by 68.65% for the comparable quarter of 2003. Other noninterest income declined due to a $644 loss on the sale of other real estate owned during the
quarter.



Noninterest expense increased by $1,950 or by 5.63% for the quarter
ended September 30, 2004 over the comparable period in 2003 due to increases in salaries and employee benefits, and in other operating expenses as a result of the on-going growth of the franchise. Salaries and employee benefits increased by $644, or
by 3.67%, during the quarter primarily due to a decline in deferred salary expense (resulting from a decline in new loans originated during the period) and an increase in employee benefit costs. These factors were partially offset by a decline in
incentive expense during the quarter. The remainder of noninterest expense increased primarily due to increases in occupancy (primarily depreciation expense discussed in Premises and equipment in Financial Condition below), furniture and
fixtures, and data processing expenses. These costs increased primarily due to expansion through acquisitions and construction of new branch offices and an increase in the number of accounts processed by third parties.



Current year-to-date period compared to prior year-to-date period



Noninterest income decreased by $3,458 or by 7.65% for the nine months ended September
30, 2004, compared to the same period in 2003 primarily due to a decrease in mortgage income. Mortgage income decreased by $3,612 or by 52.43% primarily due to a decline in mortgage refinancing activity during the first nine months of 2004. The
decrease in mortgage income included a $4,071 decrease in the gain on sale of mortgage loans held for sale. Mortgage servicing income was reduced by amortization expense on mortgage servicing rights of $1,130 and $1,588 for the nine months ended
September 30, 2004 and 2003, respectively. The decline in the gain on sale of mortgage loans held for sale was primarily due to a decline in the volume of mortgage loans originated and sold into the secondary market during the nine months ended
September 30, 2004. Originations of mortgage loans held for sale declined by $262,341, or by 62.75% during the nine months ended September 30, 2004.



Noninterest expense increased by $10,427 or by 10.37% for the nine months ended September 30, 2004 over the comparable period in 2003 primarily due to increases in
salaries and employee benefits, costs associated with the introduction of First Citizens new brand, amortization expense related to core deposit intangibles, and in other operating expenses as a result of the on-going growth of the franchise.
Salaries and employee benefits increased by $2,969, or by 5.71%, during the nine months primarily due to an increase in salaries and wages (primarily the result of merit increases) and a decline in deferred salary expense (resulting from a decline
in new loans originated), partially offset by a decline in incentive expense and health insurance claims. During the nine months ended September 30, 2004, expense of $2,289 was incurred relating to the introduction of First Citizens new brand.
The majority of these costs related to promotion of the new brand and the write-off of existing signage. These costs are included in the Other category under noninterest expense in the Consolidated Statements of Income. Amortization
expense related to core deposit intangibles increased by $851, or 14.38% during the nine months ended September 30, 2004 primarily due to acquisitions consummated in 2003. The remainder of the increase in noninterest expense was primarily due to
increases in occupancy (primarily depreciation expense discussed in Premises and equipment in Financial Condition below), furniture and fixtures and data processing expenses. These costs increased primarily due to expansion through
acquisitions and construction of new branch offices and an increase in the number of accounts processed by third parties.



Page 15



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)



Income taxes (Dollars in thousands)



Total income tax expense decreased by $934 or 16.09% for the quarter ended
September 30, 2004 compared to the same period in 2003. Total income tax expense decreased by $3,145 or 18.49% for the nine months ended September 30, 2004 compared to the same period in 2003. The effective tax rate was 35.40% and 36.19% for the
quarters ended September 30, 2004 and September 30, 2003, respectively. The effective tax rate was 35.40% and 35.80% for the nine months ended September 30, 2004 and September 30, 2003, respectively.



FINANCIAL CONDITION



Investment securities (Dollars in thousands)



As of September 30, 2004, the investment portfolio totaled $900,754 compared to $922,229 at
December 31, 2003 (a decrease of 2.33%) and $924,311 at September 30, 2003 (a decrease of 2.55%). The decline in the investment portfolio since December 31, 2003 was primarily due to reinvesting a portion of investments in other interest-earning
assets, primarily loans. Bancorporation continues to invest primarily in short-term U.S. government obligations and agency securities to minimize credit, interest rate and liquidity risks. The investment portfolio consisted of 91.99%, 92.16% and
92.58% U.S. government and agency securities as of September 30, 2004, December 31, 2003, and September 30, 2003, respectively. The remainder of the investment portfolio consisted of municipal bonds and equity securities.



Loans (Dollars in thousands)



As of September 30, 2004, loans totaled $3,081,307, compared to $2,939,989 at December 31,
2003 (an annualized increase of 6.41%) and $2,849,806 at September 30, 2003 (an increase of 8.12%), respectively. Most of the growth in loans was experienced in the commercial and home equity loan portfolios. The composition of the loan portfolio
has not shifted significantly since September 30, 2003 or December 31, 2003.



Allowance for loan losses and asset quality (Dollars in thousands)



Bancorporations allowance for loan losses represented 1.69% of gross loans at September 30, 2004, compared to 1.71% at June 30, 2004, 1.74% at December 31, 2003 and 1.77% at September 30, 2003. The decline in the allowance percentage
is the result of continued improvement in credit quality trends. Provision for loan losses of $1,349 was charged to operations for the quarter ended September 30, 2004 compared to $4,436 for the quarter ended September 30, 2003, a decrease of
69.59%. Provision for loan losses of $5,505 was charged to operations for the nine months ended September 30, 2004 compared to $7,799 for the nine months ended September 30, 2003, a decrease of 29.41%. The decline in provision recognized during the
quarter and nine months ended September 30, 2004 was due to continued improvement in trends in charge offs, nonperforming loans and classified loans.



Bancorporation believes that its allowance for loan losses is adequate to cover losses inherent in its portfolio at September 30, 2004. Management believes that the
provision taken during the quarter ended September 30, 2004 was appropriate to provide an allowance for loan losses which considers the past experience and current trend of charge-offs, the level of past due and nonaccrual loans, the size and mix of
the loan portfolio, credit classifications and general economic conditions affecting Bancorporations market areas.



Page 16



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)



An analysis of activity in the allowance for loan losses as of September 30, 2004 and
2003 is presented below. The allowance for loan losses is maintained through charges to the provision for loan losses. Loan charge-offs and recoveries are charged or credited directly to the allowance for loan losses.



|                                                        |  |                                             |        |   |                                                 |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------------------------- |  | ------------------------------------------- | ------ | - | ----------------------------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                        |  | As of and for theQuarter EndedSeptember 30, |        |   | As of and for theNine Months EndedSeptember 30, |  
|                                                        |  | 2004                                        |        |   | 2003                                            |   |        | 2004 |  |   | 2003   |  
|Allowance for loan losses:                              |  |                                             |        |   |                                                 |   |        |      |  |   |        |   |  |   |        |  
|Balance at beginning of period                          |  | $                                           | 52,188 |   |                                                 | $ | 48,120 |      |  | $ | 51,268 |   |  | $ | 43,305 |  
|Addition related to acquisitions                        |  |                                             |       |   |                                                 |   |       |      |  |   |       |   |  |   | 3,776  |  
|Provision for loan losses                               |  |                                             | 1,349  |   |                                                 |   | 4,436  |      |  |   | 5,505  |   |  |   | 7,799  |  
|                                                        |  |                                             |        |   |                                                 |   |        |      |  |   |        |   |  |   |        |  
|Charge-offs                                             |  |                                             | (2,118 | ) |                                                 |   | (2,532 | )    |  |   | (6,296 | ) |  |   | (5,789 | )
|Recoveries                                              |  |                                             | 573    |   |                                                 |   | 443    |      |  |   | 1,515  |   |  |   | 1,376  |  
|                                                        |  |                                             |        |   |                                                 |   |        |      |  |   |        |   |  |   |        |  
|Net charge-offs                                         |  |                                             | (1,545 | ) |                                                 |   | (2,089 | )    |  |   | (4,781 | ) |  |   | (4,413 | )
|                                                        |  |                                             |        |   |                                                 |   |        |      |  |   |        |   |  |   |        |  
|Balance at end of period                                |  | $                                           | 51,992 |   |                                                 | $ | 50,467 |      |  | $ | 51,992 |   |  | $ | 50,467 |  
|                                                        |  |                                             |        |   |                                                 |   |        |      |  |   |        |   |  |   |        |  
|Nonperforming assets:                                   |  |                                             |        |   |                                                 |   |        |      |  |   |        |   |  |   |        |  
|Nonperforming loans                                     |  | $                                           | 5,641  |   |                                                 | $ | 6,542  |      |  | $ | 5,641  |   |  | $ | 6,542  |  
|Foreclosed real estate                                  |  |                                             | 2,268  |   |                                                 |   | 3,022  |      |  |   | 2,268  |   |  |   | 3,022  |  
|                                                        |  |                                             |        |   |                                                 |   |        |      |  |   |        |   |  |   |        |  
|Total nonperforming assets                              |  | $                                           | 7,909  |   |                                                 | $ | 9,564  |      |  | $ | 7,909  |   |  | $ | 9,564  |  
|                                                        |  |                                             |        |   |                                                 |   |        |      |  |   |        |   |  |   |        |  
|Asset quality ratios:                                   |  |                                             |        |   |                                                 |   |        |      |  |   |        |   |  |   |        |  
|Nonperforming loans to total loans                      |  |                                             | .18    | % |                                                 |   | .23    | %    |  |   | .18    | % |  |   | .23    | %
|Nonperforming assets to total assets                    |  |                                             | .18    | % |                                                 |   | .23    | %    |  |   | .18    | % |  |   | .23    | %
|Annualized net charge-offs to average loans             |  |                                             | .20    | % |                                                 |   | .30    | %    |  |   | .21    | % |  |   | .23    | %
|Annualized net charge-offs to total loans               |  |                                             | .20    | % |                                                 |   | .29    | %    |  |   | .21    | % |  |   | .21    | %
|Allowance for loan losses to annualized net charge-offs |  |                                             | 8.41x  |   |                                                 |   | 6.04x  |      |  |   | 8.16x  |   |  |   | 8.58x  |  
|Allowance for loan losses to nonperforming loans        |  |                                             | 9.22x  |   |                                                 |   | 7.71x  |      |  |   | 9.22x  |   |  |   | 7.71x  |  



Premises and equipment (Dollars in
thousands)



As of September 30, 2004, premises and equipment totaled
$151,724, compared to $134,756 at December 31, 2003 (an increase of 12.59%) and $127,503 at September 30, 2003 (an increase of 19.00%). The increase from September 30, 2003 to September 30, 2004 was primarily due to construction of six new branch
offices. Provisions for depreciation included in noninterest expense were $3,210 and $2,500 for the quarters ended September 30, 2004 and 2003, respectively. Provisions for depreciation included in noninterest expense were $8,982 and $7,069 for the
nine months ended September 30, 2004 and 2003, respectively.



On April 22,
2004, Bancorporations Board of Directors approved the construction of a new headquarters building for First Citizens Bank and Trust Company, Inc. (First Citizens). As of September 30, 2004, construction in process related to the
new headquarters building was $1,489.



Liquidity (Dollars in thousands)



Bancorporation continues to have the liquidity necessary to meet cash
flow requirements. Bancorporations primary source of funds is its deposit base. As of September 30, 2004, deposits totaled $3,787,002, compared to $3,714,577 at December 31, 2003 (an annualized increase of 2.60%) and $3,650,293 at September
30, 2003 (an increase of 3.75%). Most of the growth in deposits was experienced in NOW accounts and money market demand accounts. Average deposits were $3,791,867 and $3,483,036 for the nine months ended September 30, 2004 and September 30, 2003,
respectively.



Short-term borrowings in the form of securities sold under
agreements to repurchase are another source of funds. As of September 30, 2004, short-term borrowings totaled $185,134, compared to $148,864 at December 31, 2003 (an increase of 24.36%) and $148,043 at September 30, 2003 (an increase of 25.05%),
respectively. Average short-term borrowings were $185,134 and $153,890 for the nine months ended September 30, 2004 and September 30, 2003, respectively. Loan growth was primarily funded through core deposits and short-term borrowed funds in the
form of repurchase agreements with customers.



Capital resources



Bank holding companies and their respective subsidiaries are subject to
regulatory requirements with respect to risk-based capital adequacy. The risk-weighted values of both balance sheet and off-balance sheet items are determined in accordance with risk factors specified by Federal bank regulatory pronouncements.



Page 17



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)



Tier I capital (common shareholders equity excluding unrealized gains or losses of
securities available-for-sale, net of deferred taxes, less nonqualifying intangible assets) is required to be at least 4% of risk-weighted assets, and total regulatory capital (the sum of Tier I capital, a qualifying portion of the allowance for
loan losses and qualifying subordinated debt) must be at least 8% of risk-weighted assets, with one half of the minimum consisting of Tier I capital.



In addition to the risk-based capital measures described above, bank regulators have also established minimum leverage capital requirements for banking organizations. The
minimum required Tier I leverage ratio is 3%.



Banks which meet or exceed a
Tier I ratio of 6%, a total capital ratio of 10% and Tier I leverage ratio of 5% are considered well-capitalized by regulatory standards.



The following table details Bancorporations capital ratios at September 30, 2004 and 2003.



|                           |  |                     |   |  |       |  
|-------------------------- |  | ------------------- | - |  | ----- | -
|                           |  | As of September 30, |  
|                           |  | 2004                |   |  | 2003  |  
|Risk-based capital ratios: |  |                     |   |  |       |  
|Total capital              |  | 13.96               | % |  | 11.91 | %
|Tier I capital             |  | 12.22               | % |  | 10.06 | %
|Tier I leverage ratio      |  | 8.69                | % |  | 7.18  | %



Repurchases of equity securities
(Dollars in thousands, except average price per share data)



The following
table contains information regarding repurchases by Bancorporation of shares of its outstanding voting common stock during the quarter ended September 30, 2004.



|                                       |  |                                      |  |                            |  |                                                                  |  |                                                                
|-------------------------------------- |  | ------------------------------------ |  | -------------------------- |  | ---------------------------------------------------------------- |  | ---------------------------------------------------------------
|Period                                 |  | Total Numberof SharesRepurchased (1) |  | Average PricePaid perShare |  | Total Number ofSharesPurchased asPart of PubliclyAnnounced Plans |  | Maximum Number of Sharesthat may yet bePurchased Underthe Plans
|July 1 through July 31, 2004           |  | 1,004                                |  | 520.00                     |  | N/A                                                              |  | N/A                                                            
|August 1 through August 31, 2004       |  | 1,963                                |  | 513.38                     |  | N/A                                                              |  | N/A                                                            
|September 1 through September 30, 2004 |  | 70                                   |  | 507.00                     |  | N/A                                                              |  | N/A                                                            
|                                       |  |                                      |  |                            |  |                                                                  |  |                                                                
|Total                                  |  | 3,037                                |  | 515.42                     |  |                                                                  |  |                                                                
|                                       |  |                                      |  |                            |  |                                                                  |  |                                                                

---

|(1) | All purchases were made pursuant to general authority that is given each year by Bancorporations Board of Directors and not pursuant to a formal repurchase plan or program.
Under that authority, Bancorporation is authorized to repurchase shares of its capital stock from time to time in unsolicited private and/or open market transactions. Purchases are subject to various conditions, including price and volume
limitations (including, in the case of purchases of Bancorporations voting common stock, an annual limit of up to 5% of outstanding shares), and compliance with applicable South Carolina law. Under that authority during the nine months ended
September 30, 2004 and September 30, 2003, Bancorporation repurchased an aggregate of 6,567 and 5,348 shares of its voting common stock for an aggregate price of $3,413 and $2,146, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



With respect to other classes of Bancorporations capital stock, there were no
repurchases during the quarters ended September 30, 2004 and 2003.



Item 3.
Quantitative and Qualitative Disclosures about Market Risk



There have
been no material changes in market risk exposures that affect the quantitative and qualitative disclosures presented as part of Bancorporations Annual Report on Form 10-K for the year ended December 31, 2003.



Page 18



---

Item 4. Controls and Procedures



|(a) | Evaluation of Disclosure Controls and Procedures
|--- | ------------------------------------------------



Bancorporations Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of Bancorporations disclosure
controls and procedures (as defined in the Securities Exchange Act of 1934 rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report, have concluded that Bancorporations disclosure controls and
procedures were effective as of the end of that period.



|(b) | Changes in Internal Control Over Financial Reporting
|--- | ----------------------------------------------------



There were no changes in Bancorporations internal control over financial reporting that occurred during our most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, Bancorporations internal control over financial reporting.



PART II - OTHER INFORMATION



Item 1. Legal Proceedings



Not Applicable.



Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities



The information required by Item 703 of Regulation S-K regarding Bancorporations repurchases of equity securities is incorporated herein by
reference to the information in Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operation under the caption Repurchases of equity securities on page 18 of this report.



Item 3. Defaults upon Senior Securities



Not Applicable.



Item 4. Submission of Matters to a Vote of Security Holders



Not Applicable.



Item 5. Other Information



Not Applicable.



Item 6. Exhibits



|                                                                                           |  |                                                                                     
|------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------
|Exhibits  The following exhibits are either attached hereto or incorporated by reference:
|                                                                                           | 
|31.1                                                                                       |  | Certification of Chief Executive Officer required by Rule 13a-14(a) (filed herewith)
|                                                                                           | 
|31.2                                                                                       |  | Certification of Chief Financial Officer required by Rule 13a-14(a) (filed herewith)
|                                                                                           | 
|32                                                                                         |  | Certification (Pursuant to 18 U.S.C. Section 1350) (filed herewith)                 



Page 19



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SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.



|                        |  |                                     |  |                        
|----------------------- |  | ----------------------------------- |  | -----------------------
|                        |  | FIRST CITIZENS BANCORPORATION, INC.
|                        |  | (Registrant)                       
|Dated: November 9, 2004 |  |                                     |  |                        
|                        |  | By:                                 |  | /s/ Craig L. Nix       
|                        |  |                                     |  | Craig L. Nix           
|                        |  |                                     |  | Chief Financial Officer



Page 20



---

EXHIBIT INDEX



|     |  |                                                                                     
|---- |  | ------------------------------------------------------------------------------------
|31.1 |  | Certification of Chief Executive Officer required by Rule 13a-14(a) (filed herewith)
|     | 
|31.2 |  | Certification of Chief Financial Officer required by Rule 13a-14(a) (filed herewith)
|     | 
|32   |  | Certification (Pursuant to 18 U.S.C. Section 1350) (filed herewith)                 



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