The transaction included $6.8bn in deposits, with $4.5bn community association deposits, and $8.3bn of total assets, with $3.9bn of middle-market commercial loans
Salmon Tower Building, CIT Group headquarters in New York City, US. (Credit: Sonja Pieper/Wikipedia.)
CIT Bank, a banking subsidiary of financial holding firm CIT Group, has completed the acquisition of Mutual of Omaha Bank, a US-based full-service bank, for approximately $1bn.
CIT has paid $850m of the $1bn purchase price in cash and issued approximately 3.1 million shares of stock to Mutual of Omaha Insurance.
The transaction included $6.8bn in deposits, with $4.5bn community association deposits, and $8.3bn of total assets, with $3.9bn of middle-market commercial loans, as of 30 September 2019.
CIT chairwoman and chief executive officer Ellen R Alemany said: “The completion of this transaction accelerates CIT’s strategic plan to further enhance our capability as a leading national bank and create additional long-term shareholder value.
“The addition of the homeowner association deposit channel has significant growth potential and will reduce CIT’s overall cost of funds, and the middle market banking franchise will expand our footprint and customer base. These capabilities complement CIT’s core strengths and will allow us to unlock greater potential and create an even stronger company.”
CIT has approximately $42bn of total deposits and $60bn of total assets
CIT said that the transaction would strengthen its plans to add a stable, lower-cost homeowner association deposit channel from the community association banking business.
In addition, it will also reinforce its commercial banking strengths by adding relationship banking teams and expanding the product and technology solutions.
With the acquisition, the total deposits of CIT reached approximately $42bn, and total assets reached $60bn.
Mutual of Omaha Bank is expected to start its transition to the CIT brand and its retail branch locations would adopt the CIT Bank brand within a few months.
The customer accounts would remain unchanged and can be accessed through Mutual of Omaha Bank branches, website, mobile apps and relationship managers, during the transition time, said the company.
Alemany added: “We are excited to welcome the teammates and clients of Mutual of Omaha Bank to the CIT family. We look forward to strengthening existing relationships, building new ones, and continuing to deliver value for our customers, colleagues, shareholders and communities.”