RALEIGH and NEW YORK — First Citizens BancShares, Inc., the parent company of First Citizens Bank & Trust Company, and CIT Group Inc., the parent company of CIT Bank, N.A., jointly announced last week that they have entered into a definitive agreement under which the companies will combine in an all-stock merger of equals to create the 19th largest bank in the United States based on assets.
A statement to the press read, in part, “transformational partnership will create greater scale to drive growth, improve profitability and enhance stockholder value.” Company officials said the transaction was designed to bring together the complementary strengths of First Citizens’ low-cost retail deposit franchise and full suite of banking products with CIT’s national commercial lending expertise and strong market positions. In addition, officials noted that “it creates a more diversified deposit strategy with First Citizens’ 550+ full-service retail banking locations in key growth MSAs, including across the Southeast, and CIT’s rapidly growing homeowner association business, leading direct bank and complementary Southern California retail branch network.”
First Citizens has been in a continuous merger and integration cycle for the last 10plus years, acquiring over 25 companies resulting in strong business performance and stock price performance over this time period. CIT’s three acquisitions since 2014 represent over $30 billion in acquired and integrated assets.
Under the terms of the definitive merger agreement, which was unanimously approved by the boards of directors of both companies, CIT stockholders will receive 0.0620 shares of First Citizens class A common stock for each share of CIT common stock they own. First Citizens stockholders will own approximately 61% and CIT stockholders will own approximately 39% of the combined company.
The combined company will operate under the First Citizens name and will trade under the First Citizens ticker symbol FCNCA on the Nasdaq stock market. The combined company will be headquartered in Raleigh and will maintain significant operation centers in New York, Pasadena, Omaha, Phoenix, Jacksonville, Fla., New Jersey and Columbia, S.C., among other locations.
Frank Holding, Jr., Chairman and CEO of First Citizens, will retain the same roles at the combined company. Ellen R. Alemany, Chairwoman and CEO 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 board of directors of the combined company will consist of 14 directors, the current 11 First Citizens Board members and three CIT Board members, including Ms. Alemany.
“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 Frank 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. 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.”
Ellen R. Alemany, Chairwoman and CEO of CIT, 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.”
Founded in Smithfield in 1898, First-Citizens Bank & Trust Company provides a broad range of financial services to individuals, businesses, professionals and the medical community through branch offices in 19 states, including digital banking, mobile banking, ATMs and telephone banking. As of June 30, 2020, First Citizens had total assets of $47.9 billion.