- First Citizens BancShares and CIT Group have extended the timeline to complete their $2.2 billion merger until March 1, the banks said Thursday in a release.
- “Action by the Federal Reserve Board is the remaining regulatory approval required to complete the merger, and both parties are committed to continuing to seek such approval,” the banks said, noting that the Federal Deposit Insurance Corp. (FDIC) and the Office of the North Carolina Commissioner of Banks had each approved the deal. The combined company would be headquartered in Raleigh, North Carolina.
- If the deal is not completed by March 1, either bank has the right to back out, American Banker reported Thursday.
Thursday’s delay wouldn’t be the first for the First Citizens-CIT merger, which would create the country’s 19th-largest bank, with roughly $110 billion in assets.
When the deal was announced in October 2020, the banks estimated it would be complete in the first half of 2021. The Fed and the FDIC in January each extended their public comment period on the merger "in light of the ongoing challenges from the coronavirus.” That, in turn, pushed the expected completion time frame to Oct. 15.
A Fed spokesperson declined to comment Thursday on the merger. But Christopher Marinac, director of research at Janney Montgomery Scott, suggested to American Banker the delay may have more to do with staffing at regulatory agencies rather than any outstanding reservations about the deal.
“I’m not aware of an instance in which the FDIC approved a merger and then the Fed had not,” Marinac told the publication. “Now anything is possible, and there is always a first time for everything.”
First Citizens and CIT, for their part, “have responded to all questions issued by the staff of the Federal Reserve Board, and the staff has informed us that they do not have further questions at this time,” the banks said in their statement Thursday.
The application is at the governor level, the banks said, adding that the central bank’s board of governors has not given a timetable for the deal’s potential approval.
Marinac told American Banker investors had questioned the deal’s timing and whether any issues could torpedo the deal but that no problems were publicly known.
The transaction has been billed as a merger of equals, but First Citizens investors would own 61% of the surviving company. The entity would carry the First Citizens name and keep the Raleigh-based bank’s CEO as its chief executive.