The merger creates a top 20 US bank with more than $100bn in assets
First Citizens BancShares, the parent company of First-Citizens Bank & Trust, has agreed to acquire bank holding company CIT Group in an agreement valued at over $2bn.
The merger will create a new US bank with over $100bn in assets and operate under the First Citizens name with headquarters in Raleigh, North Carolina.
CIT Group operates a principal bank subsidiary, CIT Bank. As of 30 June 2020, CIT had total assets of $61.7bn.
Under the terms of the deal, CIT shareholders will get 0.062 shares of First Citizens Class A common stock for each share of CIT common stock. First Citizens shareholders will own around 61% of the combined company, with CIT holding the remaining 39%.
The deal brings together First Citizens’ low-cost retail deposit franchise and full suite of banking products and CIT’s national commercial lending franchise and market positions.
It combines First Citizens’ more than 550 retail banking locations in the southeastern and western US with CIT’s Southern California retail branch network and homeowner-association business.
The merger is expected to close in the first half of 2021
First Citizens chairman and CEO Frank Holding will continue to keep the CEO title after the merger, while CIT’s chairwoman and CEO Ellen Alemany will assume the role of vice chairwoman.
Upon completion of the deal, the board of directors will feature 14 directors, of which 11 will be existing First Citizens board members and three will come over from CIT.
Subject to regulatory and other approvals, the merger is anticipated to close in the first half of 2021.
Holding said: “Under Ellen’s leadership, CIT has made tremendous progress in reducing its cost of funds, enhancing risk management processes and retaining key talent.
“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.”
Earlier this year, First-Citizens Bank & Trust has completed its merger with Community Financial Holding Company and its subsidiary, Gwinnett Community Bank.