BY Richard Summerfield
First Citizens BancShares and CIT Group have announced an agreement to merge in a deal worth $2.2bn.
The deal is being billed as a merger of equals, though First Citizens would be the surviving company and its investors would own 61 percent of its outstanding shares. First Citizens will pay $2.2bn in stock for CIT, with CIT shareholders receiving 0.062 shares of First Citizens’ stock for each share they own. The deal is expected to close in the first half of 2021.
Frank Holding, Jr, chairman and chief executive of First Citizens, will retain the same roles at the combined company. Ellen R. Alemany, chairwoman and chief executive of CIT, will assume the role of vice chairwoman and play a key role in the merger integration. In addition, she will serve on the board of directors of the combined company.
The deal will create the 19th-largest bank holding company in the US, with roughly $110bn of assets and a nationwide network of branches.
“This is a transformational partnership for First Citizens and CIT designed to create long-term value for all of our constituents including our stockholders, our customers, our associates and our communities,” said Mr Holding, Jr. “We have long admired CIT’s market-leading commercial business, including their strong market position across multiple asset classes. Under Ellen’s leadership, CIT has made tremendous progress in reducing its cost of funds, enhancing risk management processes and retaining key talent.”
He continued: “First Citizens has a long history of delivering strong returns to our stockholders, gathering low-cost deposits and driving strong earnings, which are all supported by an exceptional credit culture, strong capital and excellent risk management. Together, First Citizens and CIT will be able to leverage both companies’ unique attributes to create the 19th largest bank in the country, well-positioned to compete across the United States.”
“Frank and I have long respected each other’s companies and believe this transaction will accelerate our strategic goals by bringing together the expertise of both banks to create scale, strength and value,” said Ms Alemany. “I’m proud of the work we have done to transform CIT in recent years to a leading, national commercial bank. This transaction will build on those efforts and more fully unlock the potential in our core franchises. In addition, the strength that is created as a larger US bank will enable greater opportunities for our team, our customers and our communities.”
News: Regional lender First Citizens to buy CIT in $2.2 billion deal