First Citizens BancShares, the parent company of First-Citizens Bank & Trust Company, and CIT Group, the parent company of CIT Bank, 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 partnership will create greater scale to drive growth, improve profitability and enhance stockholder value. The transaction brings together First Citizens’ low-cost retail deposit franchise and full suite of banking products with CIT’s national commercial lending expertise and market positions. In addition, it creates a more diversified deposit strategy with First Citizens’ more than 550 full-service retail banking locations in key growth MSAs, including across the Southeast, and CIT’s homeowner association business, 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, NC, and will maintain operation centers in New York; Pasadena, CA; Omaha, NE; Phoenix; Jacksonville, FL; New Jersey; and Columbia, SC, 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 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,” Holding Jr. said. “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.”

“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,” Ellen R. Alemany, chairwoman and CEO of CIT, said. “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.”

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.

Piper Sandler served as financial advisor to First Citizens, with Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan serving as legal advisor. Keefe, Bruyette & Woods and Morgan Stanley served as financial advisor to CIT, with Sullivan & Cromwell serving as legal advisor.