First Citizens BancShares to acquire rival US bank firm CIT Group


First Citizens BancShares, the parent company of First-Citizens Bank & Trust, has signed a $2.2 billion deal to acquire CIT Group, the parent company of CIT Bank, in a move to create the 19th largest bank in the US on the basis of assets under management.

While First Citizens BancShares is headquartered in Raleigh, North Carolina, CIT Group is based in New York City and incorporated in Delaware. CIT Bank is headquartered in Pasadena, California.

First-Citizens Bank & Trust offers a range of financial services to individuals, businesses, professionals, and the medical community via its branch offices across 19 states. As of 30 June 2020, First-Citizens Bank & Trust had total assets of $47.9 billion.

CIT Bank is a national bank, which as of 30 June 2020 had total assets of $61.7 billion.

The deal is said to bring together the complementary strengths of First-Citizens Bank & Trust’s low-cost retail deposit franchise and complete suite of banking products with CIT Bank’s national commercial lending expertise and strong positions in the market.

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It will also help in creating a more diversified deposit strategy with First-Citizens Bank & Trust’s more than 550 full-service retail banking locations in key growth MSAs, which include the Southeast, and CIT Bank’s homeowner association business, direct bank, and complementary Southern California retail branch network.

Frank Holding Jr. – Chairman and CEO of First Citizens BancShares said: “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.

“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. 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.

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“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.”

First Citizens BancShares acquisition of CIT Group.

First Citizens BancShares acquisition of CIT Group. Photo courtesy of Aurora30/

As per the terms of the merger deal, CIT Group stockholders will exchange each of their shares with 0.0620 shares of First Citizens BancShares.

In the combined bank holding company, First Citizens BancShares’ stockholders will own nearly 61% stake, while CIT Group’s stockholders will own around 39% stake.

First Citizens BancShares and First-Citizens Bank & Trust will be the surviving bank holding company and bank subsidiary, respectively. The combined banking company will be based in Raleigh, and will have significant operation centers across New York, Pasadena, Jacksonville in Florida, Omaha, Phoenix, New Jersey, and Columbia in South Carolina among other locations.

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Ellen R. Alemany – Chairwoman and CEO of CIT Group said: “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. 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 U.S. bank will enable greater opportunities for our team, our customers and our communities.”

The merger, which is subject to regulatory approvals and shareholders’ approval of both the firms, and meeting of other customary closing conditions, is expected to be completed in the first half of 2021.

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