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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

QUARTERLY REPORT UNDER SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

FIRST CITIZENS BANCORPORATION, INC.

(Exact name of registrant as specified in its charter)

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

First Citizens Bancorporation of South Carolina, Inc.

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

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.

PART1-FINANCIAL INFORMATION

Item 1. Financial Statements

FIRST CITIZENS BANCORPORATION INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CONDITION-UNAUDITED (Dollars in thousands, except per values)

See accompanying Notes to the Consolidated Financial Statements

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FIRST CITIZENS BANCORPORATION INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CONDITION-UNAUDITED

-(Dollars in thousands, except per values)

See accompanying Notes to the Consolidated Financial Statements.

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FIRST CITIZENS BANCORPORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME – UNAUDITED

(Dollars in thousands)

See accompanying Notes to the Consolidated Financial Statements.

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FIRST CITIZENS BANCORPORATION, INC. AND SUBSIDIARIES

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

See accompanying Notes to the Consolidated Financial Statements

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

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 preparation. In the opinion of management, all material 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 presentation of the consolidated financial statements have been recorded. Certain amounts in prior periods have been reclassified to conform to the 2004 presentation. Such reclassifications had no effect on shareholders’ equity or net income.

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 to entities other than Special Purpose Entities (“SPEs”) until financial statements are issued for periods ending after March 15, 2004. 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 that issued trust preferred securities, thus trust preferred securities were deconsolidated as of December 31, 2003. As a result, other assets and long-term debt increased by $1,547, respectively. As of December 31, 2003, Bancorporation has adopted FIN 46R. 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 the 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. Because these investments generate tax credits which minimize the financial impact of a loss of capital, Bancorporation has chosen to utilize established syndicators to reduce this risk. 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 FASB issued SFAS No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Postretirement Benefits.” This Statement requires additional disclosures about the assets, obligations and cash flows of defined benefit pension and postretirement plans, as well as the expense recorded for such plans. The revised disclosures, which are required to be provided on a quarterly basis, are presented herein.

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 our results of operations.

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

Goodwill and Other Intangibles (Dollars in thousands)

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

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:

Amortization expense on core deposit intangibles was $2,265 and $1,827 for the quarters ended March 31, 2004 and 2003, respectively. The increase in amortization expense during the period is due to an increase in core deposit intangibles related to 2003 acquisitions.

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

Mortgage servicing rights as of March 31, 2004, December 31, 2003 and March 31, 2003 were $5,668, $6,458, and $5,157, respectively. The amortization expense related to mortgage servicing rights, included as a reduction of mortgage income in the Consolidated Statements of Income, was $1,016 and $830 for the quarters ended March 31, 2004 and 2003, respectively. Amortization expense includes $536 and $429 for impairment of mortgage servicing rights for the quarters ended March 31, 2004 and 2003, respectively.

Mergers and Acquisitions (Dollars in thousands)

There were no mergers or acquisitions completed during the quarter ended March 31, 2004.

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

Employee benefits (Dollars in thousands)

The following table details the components of pension expense recognized in Bancorporation’s Consolidated Statements of Income:

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. As of March 31, 2004, no contributions were made; however, in April 2004 Bancorporation made its entire 2004 contribution of $3,528.

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

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

Subsequent events (Dollars in thousands)

On April 22, 2004, Bancorporation’s Board of Directors declared a $.35 dividend on common stock to shareholders of record on May 14, 2004, payable May 25, 2004.

In addition, 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”). We currently expect construction to begin during June 2004 and that construction costs for the building and a related parking deck will amount to approximately $40.0 million. Combined with the additional costs associated with the facility, including upfitting and furniture and fixtures, we estimate that our total costs related to the project will be $48.5 million.

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 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”), and will not be registered under the Act. The trust preferred securities sold have a variable rate of interest set at 3 month LIBOR plus 2.25%. The variable rate of interest will reset quarterly.

Bancorporation intends to use the proceeds from the sale primarily to infuse capital into First Citizens to finance the building described previously.

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

Forward-Looking Statements

The following 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 Bancorporations’ customers, competition, deposit attrition, actions of government regulators, the level of market interest rates, and general economic conditions.

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, pensions, 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 FIRST QUARTER RESULTS AND CURRENT TRENDS

First quarter earnings experienced continued pressure from net interest margin (the ratio of net interest income to average interest-earning assets) compression and a decline in mortgage refinancing activity. These two factors had the most significant impact on the decline in Bancorporation’s return on average assets and return on stockholder’s equity during the quarter. Bancorporation expects that it will continue to experience margin compression if interest rates remain at their current low levels. Additionally, mortgage rates have increased since the end of the quarter which may continue to put pressure on Bancorporation’s mortgage income. Credit quality remained strong during the quarter.

During the quarter, First Citizens introduced a new brand. The new brand includes a new logo, colors and tag line (“We’re on it”). The new brand is intended to reflect our goal of continued growth and commitment to our customers and employee associates.

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)

Net income for the quarters ended March 31, 2004 and 2003 was $8,324 and $9,963, respectively. The net income per common share (basic and diluted) was $9.16 and $10.91, respectively (see calculation of earnings per share in the table above).

Net interest income increased by $2,268 or by 6.43% over the comparable quarter in 2003 primarily due to earning asset growth. Earning asset growth is attributable to internal growth as well as the First Banks, Inc. (“First Banks”) acquisition on April 1, 2003. The effect of earning asset growth was partially offset by a decline in the ratio of net interest income to average earning assets from 4.09% to 3.78% during the quarter. See Table 2 and the section “Net interest income” for a detailed analysis and discussion of net interest income.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(continued)

The increase in net interest income during the quarter was not sufficient to mitigate the increase in net noninterest expense (noninterest income less noninterest expense). Noninterest income declined by $139, or by 1.06%, while noninterest expense increased by $4,497, or by 14.04%. See the section “Noninterest income and expense” 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 March 31, 2004 and March 31, 2003 was 9.69% and 13.05%, respectively. Return on average assets decreased from 1.05% for the quarter ended March 31, 2003 to 0.76% for the quarter ended March 31, 2004. The decline in return on average assets is primarily due to net interest margin compression.

Individual components of net income are discussed further in the following sections.

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

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

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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. Table 2 compares average balance sheet items and analyzes net interest income on a tax equivalent basis for the quarters ended March 31, 2004 and 2003.

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