First Citizens BancShares, Inc., the parent company of First Citizens Bank, entered a definitive agreement to merge with CIT Group Inc., the company announced in a press release Friday.
The deal, expected to close in the first half of 2021, is an all-stock merger of equals and will create the 19th largest bank by assets in the U.S.
For every share of CIT common stock owned by shareholders, they will receive 0.0620 shares of First Citizens class A common stock, according to the terms of the merger agreement. First Citizens shareholders will own around 61 percent of the new company, whereas CIT shareholders will own approximately 39 percent.
The new company will operate under the First Citizens name and will be headquartered in Raleigh. It will trade under First Citizens’ ticker symbol “FCNCA” on the Nasdaq.
First Citizens described the deal as a “transformational partnership,” pointing to its “low-cost retail deposit franchise and full suite of banking products with CIT’s national commercial lending expertise and strong market positions” as key strengths.
“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,” First Citizens CEO Frank Holding, Jr. said in the release.
Holding will resume his roles in the new company, and Ellen R. Alemany, chairwoman and CEO of CIT, will take on the role of vice chairwoman and aid in the merger integration. She will also become a member of the board of directors of the new company.
“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,” Alemany added.
First Citizens BancShares, Inc. shares (FCNCA) rose more than 7.2 percent to last trade near $379 on Friday morning. CIT Group’s stock jumped more than 22 percent to last trade near $24.15.
