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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

For the quarter ended June 30, 2004

Commission File Number 0-11172

FIRST CITIZENS BANCORPORATION, INC.

(Exact name of registrant as specified in its charter)

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.)

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.

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)

See accompanying Notes to the Consolidated Financial Statements

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FIRST CITIZENS BANCORPORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(Dollars in thousands-except per share data)

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 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 statement 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 immaterial 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 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. Other assets and long-term debt reflect $3,094 related to FCB/SC Capital Trust I and II in the Consolidated Statements of Condition. As of December 31, 2003, Bancorporation 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 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 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.

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. Management is currently assessing the long-term effect of the SOP.

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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 our results of operations.

Goodwill and Other Intangibles (Dollars in thousands)

In accordance with SFAS No.142, no goodwill amortization was recorded for the quarter or six months ended June 30, 2004. The changes in the carrying amount of goodwill for the six months ended June 30, 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 $4,516 and $3,675 for the six months ended June 30, 2004 and 2003, respectively. Amortization expense on core deposit intangibles was $2,252 and $1,849 for the quarters ended June 30, 2004 and 2003, respectively. The increase in amortization expense during the periods is primarily due to an increase in core deposit intangibles related to an acquisition completed after June 30, 2003.

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:

Mortgage servicing rights as of June 30, 2004, December 31, 2003 and June 30, 2003 were $6,939, $6,458, and $4,180, respectively.

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

For the quarter ended June 30, 2004, amortization expense related to mortgage servicing rights, included as a reduction of mortgage income in the Consolidated Statements of Income, was negative $741. This was the result of the recapture of $1,216 of previously recorded impairment partially offset by normal amortization. For the quarter ended June 30, 2003, amortization was $1,836, consisting of $1,372 in impairment charges and the remainder consisting of normal amortization.

Amortization expense related to mortgage servicing rights, included as a reduction of mortgage income in the Consolidated Statements of Income, was $275 and $2,666 for the six months ended June 30, 2004 and 2003, respectively. Amortization expense was reduced for $680 of net recapture of impairment of mortgage servicing rights for the six months ended June 30, 2004. For the six months ended June 30, 2003, amortization expense was increased by $1,801 for impairment of mortgage servicing rights. Normal amortization was $955 and $865 for the six months ended June 30, 2004 and 2003, respectively.

Mergers and Acquisitions (Dollars in thousands)

There were no mergers or acquisitions completed during the six months ended June 30, 2004.

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:

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.

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

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