RALEIGH, N.C. and NEW YORK, Oct. 16,
2020 /PRNewswire/ -- First Citizens BancShares, Inc.
(NASDAQ: FCNCA) ("First Citizens"), the parent company of
First-Citizens Bank & Trust Company, and CIT Group Inc. (NYSE:
CIT) ("CIT"), the parent company of CIT Bank, N.A., jointly
announced today 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.
The transformational partnership will create greater scale to
drive growth, improve profitability and enhance stockholder
value. The transaction brings 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,
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.
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, N.C.,
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."
Financially Compelling Transaction for All
Stockholders
Significant Earnings Per Share Accretion and Tangible Book
Value Per Share Accretion: The transaction is targeted to
deliver in excess of 50% EPS accretion once cost savings are fully
phased in. The tangible book value per share accretion is
targeted to be in excess of 30% at closing.
Cost Synergies: The companies have identified
approximately 10% in targeted pro forma combined noninterest
expense savings.
Long-term Stockholder Value Creation and Tangible Book Value
Per Share Growth Focus: The combined company expects to
continue to emphasize tangible book value growth over time.
On a pro forma basis, the combined company targets delivering
top-tier operating performance, with a ROTCE of approximately
13%.
Strong Capital and Credit Reserve Levels: The
combined company is expected to have in excess of 9.4% Tier I
Common Equity at closing. The combined allowance for credit
losses will be approximately $1.8
billion in aggregate, representing approximately 2.4% of the
loan portfolio. The combined company's targeted strong
capital ratios are designed to support organic growth, additional
acquisitions and capital management strategies to enhance
stockholder value.
Strategically Compelling for Both Organizations
Enhanced Scale to Drive Growth, Improve Profitability and
Enhance Stockholder Value: The pro forma organization, with
over $100 billion in assets and over
$80 billion in deposits, combines two
high-quality companies focused on driving strong, consistent growth
and profitability. First Citizens stockholders have enjoyed
stock price performance that has exceeded the Nasdaq Bank Index
over the last 5-, 10- and 20-year periods. This transaction
provides a platform for growth and profitability that is expected
to drive stockholder returns for many years into the future.
Combines First Citizens' Lower Cost Deposit Franchises and
CIT's Market-Leading Nationwide Commercial Franchise: The
combined company expects to benefit from the combination of First
Citizens' strong, low-cost deposit base and CIT's leading
nationwide lending platform. CIT's industry, asset class and
capital markets expertise can deliver financing solutions to First
Citizens' strong client base. First Citizens brings a full
suite of banking products and services to CIT commercial and retail
customers, including deposit, mortgage, auto financing, merchant
services, credit and debit cards, wealth management and trust
solutions. First Citizens' strong deposit suite and low-cost
funding is targeted to enable the pro forma company to expand its
business and compete more effectively with larger
competitors. CIT's HOA business is also expected to continue
to be an important low-cost funding source.
Experienced Management Teams with Significant Integration
Experience: This merger combines two highly respected
management teams operating complementary business lines. Both
companies have significant merger integration experience and proven
track records of successfully integrating acquisitions to drive
stockholder value. First Citizens has been in a continuous
merger and integration cycle for the last 10+ years acquiring over
25 companies resulting in superior 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.
Combined Company Poised For Long-Term
Growth: Several of the combined companies' business lines
will be enhanced through this combination. The combined
Southern Californian branch and deposit-gathering footprint will be
substantially enhanced. The mortgage business is targeted to
double in size with attractive growth prospects.
Complementary SBA business lines are targeted to significantly
increase in scale and present additional opportunities for
growth.
Significant Opportunity to Optimize the Balance Sheet and
Earnings: Lower funding costs are targeted to enable CIT's
commercial lines to compete more effectively, and a diversified
funding mix should enable the combined company to reduce financing
costs through improved credit ratings for CIT's businesses and
additional scale and diversification.
Combined Company Laser-Focused on Credit Quality, Capital
Adequacy and Risk Management: First Citizens has a long
track record of significantly below peer Non-Performing Asset
ratios and Net Charge-Off ratios. Both companies have
completed extensive due diligence. This transaction provides
immediate product and geographic diversification.
Strong Reputation, Robust Customer Relationships and Similar
Cultures Reduce Integration Risk: The combined company is
designed to leverage the strong reputation of both companies with
the goal of delivering strong performance and results for
customers, colleagues and communities.
Company Well Positioned for Long-Term Value Creation Due to
Stable Low-Cost Deposits, Strong Presence in High-Growth MSAs
Nationwide and Online Platform, Providing Diverse Funding
Mix: First Citizens' deposit costs are currently 0.13% and
have historically been consistently below peer funding costs.
CIT's direct banking deposit platform offers a unique opportunity
to scale online deposits in a cost-efficient manner and its leading
homeowner association deposit channel offers additional growth and
diversification.
Approval and Timing
The merger is expected to close in the first half of 2021,
subject to satisfaction of customary closing conditions, including
receipt of regulatory approvals and approval by the stockholders of
each company.
Transaction Advisors
Piper Sandler & Co. served as
financial advisor to First Citizens, with Smith, Anderson, Blount,
Dorsett, Mitchell & Jernigan, L.L.P. serving as legal
advisor. Keefe, Bruyette & Woods, A Stifel
Company, and Morgan Stanley & Co. LLC served as financial
advisor to CIT, with Sullivan & Cromwell LLP serving as legal
advisor.
Joint Investor Conference Call
There will be a joint conference call to discuss the transaction
at 8 a.m. Eastern time today.
To listen to the live call, please dial 1-888-317-6003 (U.S.),
1-866-284-3684 (Canada) or
1-412-317-6061 (international) and enter the participant code
7110614.
A link to the live webcast, along with the related
presentations, will be available on the investor relations section
of each company's website at ir.cit.com/CorporateProfile and
firstcitizens.com/investor-relations.
An audio replay will be available an hour after the conclusion
of the call. To access the replay, dial 1-877-344-7529 (U.S.),
1-855-669-9658 (Canada) or
1-412-317-0088 (international) and use access number
10149208. This replay will be available through November 30, 2020.
About First Citizens
First Citizens is the financial holding company for Raleigh, North Carolina-headquartered First
Citizens Bank & Trust Company. 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.
For more information, visit First Citizens' website at
firstcitizens.com. First Citizens Bank. Forever
First®.
About CIT
CIT is a leading national bank focused on empowering businesses
and personal savers with the financial agility to navigate their
goals. CIT Group Inc. (NYSE: CIT) is a financial holding
company with over a century of experience and operates a principal
bank subsidiary, CIT Bank, N.A. (Member FDIC, Equal Housing
Lender). CIT's commercial banking segment includes commercial
financing, community association banking, middle market banking,
equipment and vendor financing, factoring, railcar financing,
treasury and payments services, and capital markets and asset
management. CIT's consumer banking segment includes a
national direct bank and regional branch network. As of
June 30, 2020, CIT had total assets
of $61.7 billion. Discover more
at cit.com/about.
Forward-Looking Statements
This communication contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
regarding the financial condition, results of operations, business
plans and future performance of First Citizens and CIT. Words such
as "anticipates," "believes," "estimates," "expects," "forecasts,"
"intends," "plans," "projects," "targets," "designed," "could,"
"may," "should," "will" or other similar words and expressions are
intended to identify these forward-looking statements. These
forward-looking statements are based on First Citizens' and CIT's
current expectations and assumptions regarding First Citizens' and
CIT's businesses, the economy, and other future conditions.
Because forward-looking statements relate to future results and
occurrences, they are subject to inherent risks, uncertainties,
changes in circumstances and other factors that are difficult to
predict. Many possible events or factors could affect First
Citizens' and/or CIT's future financial results and performance and
could cause the actual results, performance or achievements of
First Citizens and/or CIT to differ materially from any anticipated
results expressed or implied by such forward-looking
statements. Such risks and uncertainties include, among
others, (1) the risk that the cost savings, any revenue synergies
and other anticipated benefits of the proposed merger may not be
realized or may take longer than anticipated to be realized,
including as a result of the impact of, or problems arising from,
the integration of the two companies or as a result of the strength
of the economy and competitive factors in areas where First
Citizens and CIT do business, (2) disruption to the parties'
businesses as a result of the announcement and pendency of the
proposed merger and diversion of management's attention from
ongoing business operations and opportunities, (3) the occurrence
of any event, change or other circumstances that could give rise to
the right of one or both of the parties to terminate the definitive
merger agreement between First Citizens and CIT, (4) the risk that
the integration of First Citizens' and CIT's operations will be
materially delayed or will be more costly or difficult than
expected or that First Citizens and CIT are otherwise unable to
successfully integrate their businesses, (5) the failure to obtain
the necessary approvals of the stockholders of First Citizens
and/or CIT, (6) the outcome of any legal proceedings that may be
instituted against First Citizens and/or CIT, (7) the failure to
obtain required governmental approvals (and the risk that such
approvals may result in the imposition of conditions that could
adversely affect the combined company or the expected benefits of
the proposed transaction), (8) reputational risk and potential
adverse reactions of First Citizens' and/or CIT's customers,
suppliers, employees or other business partners, including those
resulting from the announcement or completion of the proposed
merger, (9) the failure of any of the closing conditions in the
definitive merger agreement to be satisfied on a timely basis or at
all, (10) delays in closing the proposed merger, (11) the
possibility that the proposed merger may be more expensive to
complete than anticipated, including as a result of unexpected
factors or events, (12) the dilution caused by First Citizens'
issuance of additional shares of its capital stock in connection
with the proposed merger, (13) general competitive, economic,
political and market conditions, and (14) other factors that may
affect future results of CIT and/or First Citizens including
changes in asset quality and credit risk, the inability to sustain
revenue and earnings growth, changes in interest rates and capital
markets, inflation, customer borrowing, repayment, investment and
deposit practices, the impact, extent and timing of technological
changes, capital management activities, and other actions of the
Federal Reserve Board and legislative and regulatory actions and
reforms, and (15) the impact of the global COVID-19 pandemic on
First Citizens' and/or CIT's businesses, the ability to complete
the proposed merger and/or any of the other foregoing risks.
Except to the extent required by applicable law or regulation,
each of First Citizens and CIT disclaims any obligation to update
such factors or to publicly announce the results of any revisions
to any of the forward-looking statements included herein to reflect
future events or developments. Further information regarding
First Citizens, CIT and factors which could affect the
forward-looking statements contained herein can be found in First
Citizens' Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, its Quarterly
Reports on Form 10-Q for the periods ended March 31, 2020 and June
30, 2020, and its other filings with the Securities and
Exchange Commission (the "SEC"), and in CIT's Annual Report on Form
10-K for the fiscal year ended December 31,
2019, its Quarterly Reports on Form 10-Q for the periods
ended March 31, 2020 and June 30, 2020, and its other filings with the
SEC.
Important Information about the Merger and Where to Find
It
First Citizens intends to file a registration statement on Form
S-4 with the SEC to register the shares of First Citizens' capital
stock that will be issued to CIT's stockholders in connection with
the proposed transaction. The registration statement will
include a joint proxy statement of First Citizens and CIT that also
constitutes a prospectus of First Citizens. The definitive
joint proxy statement/prospectus will be sent to the stockholders
of First Citizens and CIT seeking their approval of the proposed
merger and the issuance of First Citizens shares in the proposed
merger.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT ON FORM S-4 AND THE JOINT PROXY
STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON
FORM S-4 WHEN THEY BECOME AVAILABLE (AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED
TRANSACTION OR INCORPORATED BY REFERENCE INTO THE JOINT PROXY
STATEMENT/PROSPECTUS) BECAUSE SUCH DOCUMENTS WILL CONTAIN IMPORTANT
INFORMATION REGARDING FIRST CITIZENS, CIT, THE PROPOSED MERGER AND
RELATED MATTERS.
Investors and security holders may obtain free copies of these
documents and other documents filed with the SEC by First Citizens
or CIT through the website maintained by the SEC at
http://www.sec.gov or from First Citizens at its website,
www.firstcitizens.com, or from CIT at its website,
www.cit.com. Documents filed with the SEC by First Citizens
will be available free of charge by accessing the "Newsroom" page
of First Citizens' website at www.firstcitizens.com or,
alternatively, by directing a request by telephone or mail to First
Citizens BancShares, Inc., Mail Code: FCC-22, PO Box 27131,
Raleigh, North Carolina
27611-7131, (919) 716-7000, and documents filed with the SEC by CIT
will be available free of charge by accessing CIT's website at
www.cit.com under the tab "About Us," and then under the heading
"Investor Relations" or, alternatively, by directing a request by
telephone or mail to CIT Group Inc., One CIT Drive, Livingston, New Jersey 07039, (866)
542-4847.
Participants in Solicitation
First Citizens, CIT, and certain of their respective directors
and executive officers may be deemed participants in the
solicitation of proxies from the stockholders of each of First
Citizens and CIT in connection with the proposed merger under the
rules of the SEC. Certain information regarding the interests
of the directors and executive officers of First Citizens and CIT
and other persons who may be deemed participants in the
solicitation of the stockholders of First Citizens or of CIT in
connection with the proposed merger and a description of their
direct and indirect interests, by security holdings or otherwise,
will be included in the joint proxy statement/prospectus related to
the proposed merger, which will be filed with the SEC.
Additional information about First Citizens, the directors and
executive officers of First Citizens and their ownership of First
Citizens common stock can also be found in First Citizens'
definitive proxy statement in connection with its 2020 annual
meeting of stockholders, as filed with the SEC on February 26, 2020, and other documents
subsequently filed by First Citizens with the SEC. Additional
information about CIT, the directors and executive officers of CIT
and their ownership of CIT common stock can also be found in CIT's
definitive proxy statement in connection with its 2020 annual
meeting of stockholders, as filed with the SEC on April 2, 2020, and other documents subsequently
filed by CIT with the SEC. These documents can be obtained
free of charge from the sources described above.
First Citizens Contact Information
Barbara Thompson
Director of Corporate Communications and Brand Marketing
(919) 716-2716
barbara.thompson@firstcitizens.com
Tom Heath
Director of Investor Relations
(919) 716-4565
tom.heathIII@firstcitizens.com
CIT Contact Information
Gina Proia
EVP, Chief Marketing and Communications Officer
212-771-6008
gina.proia@cit.com
Barbara Callahan
SVP and Head of Investor Relations
973-740-5058
barbara.callahan@cit.com
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SOURCE CIT Group Inc.