Delaware | | | 6022 | | | 56-1528994 |
(State or other jurisdiction of incorporation or organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) |
Elizabeth Ostendorf, Esq. Senior Vice President & Director, Legal Department First Citizens BancShares, Inc. 4300 Six Forks Road Raleigh, North Carolina 27609 Phone: (919) 716-7000 | | | Gerald F. Roach, Esq. Jason L. Martinez, Esq. Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. Wells Fargo Capitol Center 150 Fayetteville Street, Suite 2300 Raleigh, North Carolina 27601 Phone: (919) 821-1220 | | | James R. Hubbard Executive Vice President and General Counsel CIT Group Inc. 11 W. 42nd Street New York, New York 10036 Phone: (212) 461-5200 | | | H. Rodgin Cohen, Esq. Mitchell S. Eitel, Esq. Sullivan & Cromwell LLP 125 Broad Street New York, New York 10004 Phone: (212) 558-3588 |
Large accelerated filer | | | ☒ | | | Accelerated filer | | | ☐ |
Non-accelerated filer | | | ☐ | | | Smaller reporting company | | | ☐ |
| | | | Emerging Growth Company | | | ☐ |
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Frank B. Holding, Jr. | | | Ellen R. Alemany |
Chairman and Chief Executive Officer | | | Chairwoman and Chief Executive Officer |
if you are a First Citizens stockholder: First Citizens BancShares, Inc. 4300 Six Forks Road Raleigh, North Carolina 27609 Attn: Bridget L. Welborn (919) 716-8941 | | | if you are a CIT stockholder: CIT Group Inc. One CIT Drive Livingston, New Jersey 07039 Attn: James R. Hubbard (866) 542-4847 |
• | Proposal to approve the issuance of First Citizens Class A common stock to holders of CIT common stock pursuant to the merger agreement (the “First Citizens stock issuance proposal”). |
• | Proposal to adjourn the First Citizens special meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes to approve the First Citizens stock issuance proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to holders of First Citizens common stock (the “First Citizens adjournment proposal”). |
| | By Order of the Board of Directors | |
| | ![]() | |
| | Frank B. Holding, Jr. Chairman and Chief Executive Officer First Citizens BancShares, Inc. Raleigh, North Carolina December [ ], 2020 |
• | Proposal to adopt the merger agreement (the “CIT merger proposal”). |
• | Proposal to approve, on an advisory (non-binding) basis, the executive officer compensation that will or may be paid to CIT’s named executive officers in connection with the transactions contemplated by the merger agreement (the “CIT compensation proposal”). |
• | Proposal to adjourn the CIT special meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes to approve the CIT merger proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to holders of CIT common stock (the “CIT adjournment proposal”). |
| | By Order of the Board of Directors | |
| | ![]() | |
| | Ellen R. Alemany Chairwoman and Chief Executive Officer CIT Group Inc. December [ ], 2020 |
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• | “CIT” refers to CIT Group Inc.; |
• | “CIT Bank” refers to CIT Bank, N.A., a national banking association and wholly-owned subsidiary of CIT; |
• | “CIT common stock” refers to the common stock, par value $0.01 per share, of CIT; |
• | “CIT preferred stock” refers, collectively, to the CIT series A preferred stock and the CIT series B preferred stock; |
• | “CIT series A preferred stock” refers to the fixed-to-floating rate non-cumulative perpetual preferred stock, Series A, par value $0.01 per share, of CIT; |
• | “CIT series B preferred stock” refers to the 5.625% non-cumulative perpetual preferred stock, Series B, par value $0.01 per share, of CIT; |
• | “First Citizens” refers to First Citizens BancShares, Inc.; |
• | “First Citizens Bank” refers to First-Citizens Bank & Trust Company, a North Carolina chartered commercial bank and a direct, wholly-owned subsidiary of First Citizens; |
• | “First Citizens Class A common stock” refers to the Class A common stock, par value $1.00 per share, of First Citizens; |
• | “First Citizens Class B common stock” refers to the Class B common stock, par value $1.00 per share, of First Citizens; |
• | “First Citizens common stock” refers, collectively, to the First Citizens Class A common stock and the First Citizens Class B common stock; |
• | “First Citizens series A preferred stock” refers to the 5.375% non-cumulative perpetual preferred stock, Series A, par value $0.01 per share, of First Citizens; |
• | “First Citizens series B preferred stock” refers to the fixed-to-floating rate non-cumulative perpetual preferred stock, Series B, par value $0.01, of First Citizens; |
• | “First Citizens series C preferred stock” refers to the 5.625% non-cumulative perpetual preferred stock, Series C, par value $0.01, of First Citizens; |
• | “New First Citizens preferred stock” refers, collectively, to the First Citizens series B preferred stock and the First Citizens series C preferred stock that will be issued to holders of CIT series A preferred stock and CIT series B preferred stock, respectively, pursuant to the merger agreement; and |
• | “Merger Sub” refers to FC Merger Subsidiary IX, Inc., a direct, wholly-owned subsidiary of First Citizens Bank. |
Q: | Why am I receiving this joint proxy statement/prospectus? |
A: | You are receiving this joint proxy statement/prospectus because First Citizens, First Citizens Bank, Merger Sub, and CIT have entered into an Agreement and Plan of Merger, dated October 15, 2020 (as amended from time to time, the “merger agreement”) pursuant to which First Citizens and CIT will combine their companies in a merger of equals. Pursuant to the merger agreement, (i) Merger Sub will merge with and into CIT (which we refer to as the “first step merger”), with CIT surviving the first step merger and |
• | holders of First Citizens common stock must approve the issuance of First Citizens Class A common stock to holders of CIT common stock pursuant to the merger agreement in order to comply with applicable Nasdaq Global Select Market (“Nasdaq”) listing rules (the “First Citizens stock issuance proposal”); and |
• | holders of CIT common stock must adopt the merger agreement (the “CIT merger proposal”). |
Q: | What will happen in the mergers? |
A: | During the first step merger, Merger Sub will merge with and into CIT, with CIT surviving. In the second step merger, CIT, as the surviving entity of the first step merger, will merge with and into First Citizens Bank, with First Citizens Bank surviving. Immediately following the second step merger, First Citizens Bank and CIT Bank will merge and First Citizens Bank will continue as the surviving bank. |
Q: | When and where will each of the special meetings take place? |
A: | The First Citizens special meeting will be held virtually at the following website: www.virtualshareholdermeeting.com/FIZN2021, on February 9, 2021 at 10:00 a.m. local time. |
Q: | What matters will be considered at each of the special meetings? |
A: | At the First Citizens special meeting, holders of First Citizens common stock will be asked to consider and vote on the following proposals: |
• | First Citizens Proposal 1: The First Citizens stock issuance proposal. Approval of the issuance of First Citizens common stock to holders of CIT common stock pursuant to the merger agreement; and |
• | First Citizens Proposal 2: The First Citizens adjournment proposal. Approval of the adjournment of the First Citizens special meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes at the time of the First Citizens special meeting to approve the First Citizens stock issuance proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to holders of First Citizens common stock. |
• | CIT Proposal 1: The CIT merger proposal. Adoption of the merger agreement; |
• | CIT Proposal 2: The CIT compensation proposal. Approval of, on an advisory (non-binding) basis, the executive officer compensation that will or may be paid to CIT’s named executive officers in connection with the transactions contemplated by the merger agreement; and |
• | CIT Proposal 3: The CIT adjournment proposal. Approval of the adjournment of the CIT special meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes to approve the CIT merger proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to holders of CIT common stock. |
Q: | What will holders of CIT common stock receive in the first step merger? |
A: | At the effective time, each share of CIT common stock issued and outstanding immediately prior to the effective time (other than certain shares held by First Citizens or CIT) will be automatically converted into the right to receive 0.06200 shares of First Citizens Class A common stock. First Citizens will not issue any fractional shares of First Citizens common stock in the first step merger. Holders of CIT common stock who would otherwise be entitled to a fractional share of First Citizens Class A common stock in the first step merger will instead receive an amount in cash (rounded to the nearest cent) determined by multiplying (i) the average of the closing-sale prices per share of First Citizens Class A common stock on Nasdaq as reported by The Wall Street Journal for the consecutive period of twenty (20) full trading days ending on and including the business day that is two (2) business days immediately prior to the closing date by (ii) the fraction of a share (after taking into account all shares of CIT common stock held by such holder immediately prior to the effective time and rounded to the nearest one-thousandth when expressed in decimal form) of First Citizens Class A common stock that such stockholder would otherwise be entitled to receive. |
Q: | What will holders of CIT preferred stock receive in the first step merger? |
A: | At the effective time, each share of CIT series A preferred stock and CIT series B preferred stock issued and outstanding immediately prior to the effective time will be automatically converted into the right to receive one (1) share of First Citizens series B preferred stock and one (1) share of First Citizens series C preferred stock, respectively. The CIT series B preferred stock is currently listed on the NYSE under the symbol “CITPRB”. The shares of First Citizens series C preferred stock are expected to be listed on Nasdaq upon completion of the mergers. |
Q: | What will holders of First Citizens common stock receive in the first step merger? |
A: | In the first step merger, holders of First Citizens common stock will not receive any consideration, and their shares of First Citizens common stock will remain outstanding and will constitute shares of the combined company. Following the mergers, shares of First Citizens Class A common stock will continue to be listed on Nasdaq. |
Q: | Will the value of the merger consideration change between the date of this joint proxy statement/prospectus and the time the mergers are completed? |
A: | Yes. Although the number of shares of First Citizens Class A common stock that holders of CIT common stock will receive is fixed, the value of the merger consideration will fluctuate between the date of this joint proxy statement/prospectus and the completion of the mergers based upon the market value for First Citizens Class A common stock. Any fluctuation in the market price of First Citizens Class A common stock after the date of this joint proxy statement/prospectus will change the value of the shares of First Citizens Class A common stock that holders of CIT common stock will receive. Neither First Citizens nor CIT is permitted to terminate the merger agreement as a result, in and of itself, of any increase or decrease in the market price of First Citizens Class A common stock or CIT common stock. |
Q: | How will the mergers affect CIT equity awards? |
A: | At the effective time: |
• | except as otherwise agreed by First Citizens and CIT, each outstanding restricted stock unit award in respect of shares of CIT common stock, including any deferred restricted stock unit award (each, a “CIT RSU Award”), other than a CIT Director RSU (as defined below), will, at the effective time, automatically and without any required action on the part of the holder thereof, be converted into a number of restricted stock units in respect of shares of First Citizens Class A common stock equal to the product (with the result rounded up to the nearest whole share) of (i) the number of shares of CIT common stock subject to each such CIT RSU Award as of immediately prior to the effective time determined based on target level performance (to the extent applicable) multiplied by (ii) the exchange ratio. Each converted award will in all other respects be subject to the same terms and conditions (including vesting terms, payment timing and rights to receive dividend equivalents) applicable to the existing CIT RSU Award under the applicable equity plan and award agreement as in effect immediately prior to the effective time; |
• | except as otherwise agreed by First Citizens and CIT, each outstanding restricted stock unit award in respect of shares of CIT common stock that (i) is outstanding and unvested as of immediately prior to the effective time, (ii) is held by a member of the CIT board of directors, (iii) will automatically vest upon the effective time in accordance with its terms and (iv) is not subject to a deferral election (each, a “CIT Director RSU”), will, at the effective time, automatically and without any required action on the part of the holder thereof, be converted into the right to receive the merger consideration in respect of the number of shares of CIT common stock subject to such CIT Director RSU, less applicable tax withholding (if any), which will be delivered as soon as reasonably practicable following the closing date and in no event later than five (5) days following the closing date; and |
• | except as otherwise agreed by First Citizens and CIT, each outstanding performance unit award in respect of shares of CIT common stock (each, a “CIT PSU”) that is outstanding immediately prior to the effective time will, automatically and without any required action on the part of the holder thereof, be converted into a number of restricted stock units in respect of shares of First Citizens Class A common stock equal to the product (with the result rounded up to the nearest whole share) of (i) the number of shares of CIT common stock subject to each such CIT PSU as of immediately prior to the effective time determined based on target level performance multiplied by (ii) the exchange ratio. Each converted award will in all other respects be subject to the same terms and conditions (including rights to receive dividend equivalents) applicable to the existing CIT PSU under the applicable equity plan and award agreement as in effect immediately prior to the effective time, provided that vesting will be subject only to continued service of the holder through each applicable final performance date and will not be subject to any performance goals or metrics following the effective time. |
Q: | How will the mergers affect CIT’s employee stock purchase plan? |
A: | The CIT board of directors (or appropriate committee thereof) will take all necessary actions to ensure that (i) the “offering period” in effect immediately prior to the closing of the mergers (the “final offering”) under the CIT Group Inc. Employee Stock Purchase Plan (the “CIT ESPP”) will end at least five (5) business days prior to the closing date, (ii) each individual participating in the final offering will receive notice of the mergers no later than fifteen days prior to the closing date, (iii) each CIT ESPP participant’s accumulated contributions under the CIT ESPP will be refunded to such participant as soon as practicable following the effective time and will not be used to purchase shares of CIT common stock, and (iv) the CIT ESPP will terminate in its entirety at the effective time and no further rights will be granted or exercised under the CIT ESPP thereafter. |
Q: | What if I own CIT preferred stock? |
A: | If you are a holder of CIT preferred stock, no action is required of you. You are not entitled to, and are not requested to, vote on the CIT merger proposal, the CIT compensation proposal or the CIT adjournment proposal or to exercise appraisal or dissenters’ rights. |
Q: | How does the First Citizens board of directors recommend that I vote at the First Citizens special meeting? |
A: | The First Citizens board of directors unanimously recommends that you vote “FOR” the First Citizens stock issuance proposal and “FOR” the First Citizens adjournment proposal. |
Q: | How does the CIT board of directors recommend that I vote at the CIT special meeting? |
A: | The CIT board of directors unanimously recommends that you vote “FOR” the CIT merger proposal, “FOR” the CIT compensation proposal and “FOR” the CIT adjournment proposal. |
Q: | Who is entitled to vote at the First Citizens special meeting? |
A: | The record date for the First Citizens special meeting is December 30, 2020. All holders of First Citizens common stock who held shares at the close of business on the record date for the First Citizens special meeting are entitled to receive notice of, and to vote at, the First Citizens special meeting. |
Q: | Who is entitled to vote at the CIT special meeting? |
A: | The record date for the CIT special meeting is December 30, 2020. All holders of CIT common stock who held shares at the close of business on the record date for the CIT special meeting are entitled to receive notice of, and to vote at, the CIT special meeting. |
Q: | What constitutes a quorum for the First Citizens special meeting? |
A: | Holders of shares representing a majority of the total votes entitled to be cast by holders of outstanding shares of First Citizens Class A common stock and First Citizens Class B common stock, present or represented by proxy, will be necessary to constitute a quorum for the transaction of business at the First Citizens special meeting. If you fail to submit a proxy or to vote at the First Citizens special meeting, or fail to instruct your bank, broker, trustee or other nominee how to vote, your shares of First Citizens common stock will not be counted towards a quorum. Abstentions are considered present for purposes of establishing a quorum. |
Q: | What constitutes a quorum for the CIT special meeting? |
A: | Holders of a majority of the voting power of the outstanding shares of CIT common stock entitled to vote at the CIT special meeting, present or represented by proxy, will be necessary to constitute a quorum for the transaction of business at the CIT special meeting. If you fail to submit a proxy or to vote at the CIT special meeting, or fail to instruct your bank, broker, trustee or other nominee how to vote, your shares of CIT common stock will not be counted towards a quorum. Abstentions are considered present for purposes of establishing a quorum. |
Q: | If my shares of common stock are held in “street name” by my broker, will my broker vote my shares for me? |
A: | If you hold your shares in a stock brokerage account or if your shares are held by a bank, broker or other nominee (that is, in “street name”), please follow the voting instructions provided by your broker, bank, trustee or other nominee. Please note that you may not vote shares held in street name by returning a proxy card directly to First Citizens or CIT or by voting at either special meeting unless you provide a “legal proxy,” which you must obtain from your bank, broker, trustee or other nominee. Further, brokers who hold shares of First Citizens or CIT common stock may not give a proxy to First Citizens or CIT to vote those shares on any of the First Citizens proposals or any of the CIT proposals without specific instructions from their customers. |
Q: | What vote is required for the approval of each proposal at the First Citizens special meeting? |
A: | First Citizens Proposal 1: First Citizens stock issuance proposal. Under applicable Nasdaq Listing Rules, approval of the First Citizens stock issuance proposal requires the affirmative vote of a majority of the total votes cast by the holders of First Citizens common stock at the First Citizens special meeting or by proxy at the First Citizens special meeting. Accordingly, if you mark “ABSTAIN” on your proxy card, fail to submit a proxy card or vote at the First Citizens special meeting, or fail to instruct your bank or broker how to vote with respect to the First Citizens stock issuance proposal, you will not be deemed to have cast a vote with respect to the proposal and such abstention or broker non-vote or other failure to vote will have no effect on the outcome of the First Citizens stock issuance proposal. |
Q: | What vote is required for the approval of each proposal at the CIT special meeting? |
A: | CIT Proposal 1: CIT merger proposal. Approval of the CIT merger proposal requires the affirmative vote of a majority of the outstanding shares of CIT common stock entitled to vote on the merger agreement. Shares of CIT common stock not present, and shares present and not voted, whether by broker non-vote, abstention or otherwise, will have the same effect as votes cast “AGAINST” the CIT merger proposal. |
Q: | Why am I being asked to consider and vote on the CIT compensation proposal? |
A: | Under Securities and Exchange Commission (“SEC”) rules, CIT is required to seek a non-binding, advisory vote with respect to the compensation that may be paid or become payable to CIT’s named executive officers that is based on or otherwise relates to the mergers, or “golden parachute” compensation. |
Q: | What happens if holders of CIT common stock do not approve, by non-binding, advisory vote, the CIT compensation proposal? |
A: | The vote on the proposal to approve the merger-related compensation arrangements for each of CIT’s named executive officers is separate and apart from the votes to approve the other proposals being presented at the CIT special meeting. Because the vote on the proposal to approve the merger-related executive compensation is advisory in nature only, it will not be binding upon CIT, First Citizens, or the combined company in the mergers. Accordingly, the merger-related compensation will be paid to CIT’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and arrangements even if the holders of CIT common stock do not approve the proposal to approve the merger-related executive compensation. |
Q: | What if I hold shares in both First Citizens and CIT? |
A: | If you hold shares of both First Citizens common stock and CIT common stock, you will receive two (2) separate packages of proxy materials. A vote cast as a holder of First Citizens common stock will not count as a vote cast as a holder of CIT common stock, and a vote cast as a holder of CIT common stock will not count as a vote cast as a holder of First Citizens common stock. Therefore, please submit separate proxies for your shares of First Citizens common stock and your shares of CIT common stock. |
Q: | How can I vote my shares at the First Citizens special meeting or the CIT special meeting? |
A: | Record Holders. Shares held directly in your name as the holder of record of First Citizens common stock or CIT common stock may be voted at the First Citizens special meeting or the CIT special meeting, as applicable. |
Q: | How can I vote my shares without attending my respective special meeting? |
A: | Whether you hold your shares directly as the holder of record of First Citizens common stock or CIT common stock or beneficially in “street name”, you may direct your vote by proxy without attending the First Citizens special meeting or the CIT special meeting, as applicable. |
Q: | What do I need to do now? |
A: | After carefully reading and considering the information contained in this joint proxy statement/prospectus, please vote as soon as possible. If you hold shares of First Citizens common stock or CIT common stock, please respond by completing, signing and dating the accompanying proxy card and returning it in the enclosed postage-paid envelope, or by submitting your proxy by telephone or through the Internet, as soon as possible so that your shares may be represented at your meeting. Please note that if you hold shares beneficially in “street name”, you should follow the voting instructions provided by your bank, broker, trustee or other nominee. |
Q: | If my shares are held in “street name” by a broker, bank, trustee or other nominee, will my broker, bank, trustee or other nominee vote my shares for me? |
A: | No. Your bank, broker, trustee or other nominee cannot vote your shares on non-routine matters without instructions from you. You should instruct your bank, broker, trustee or other nominee how to vote your shares in accordance with the instructions provided to you, including each company’s respective merger proposals. Please check the voting form used by your bank, broker, trustee or other nominee. |
Q: | Why is my vote important? |
A: | If you do not vote, it will be more difficult for First Citizens or CIT to obtain the necessary quorum to hold its special meeting. In addition, if you are a holder of CIT common stock and you fail to vote, mark “ABSTAIN” on your proxy, or fail to instruct your bank or broker with respect to the CIT merger proposal, it will have the same effect as a vote “AGAINST” the CIT merger proposal. |
Q: | Can I change my vote after I have delivered my proxy or voting instruction card? |
A: | Yes. You can change your vote at any time before your proxy is voted at your meeting. You can do this by: |
• | submitting a written statement that you would like to revoke your proxy to the corporate secretary of First Citizens or CIT, as applicable; |
• | signing and returning a proxy card with a later date; |
• | attending the special meeting and voting at the special meeting; or |
• | voting by telephone or the Internet at a later time. |
Q: | Will First Citizens be required to submit the First Citizens stock issuance proposal to its stockholders even if the First Citizens board of directors has withdrawn, modified or qualified its recommendation? |
A: | Yes. Unless the merger agreement is terminated before the First Citizens special meeting, First Citizens is required to submit the First Citizens stock issuance proposal to its stockholders even if the First Citizens board of directors has withdrawn or modified its recommendation. |
Q: | Will CIT be required to submit the CIT merger proposal to its stockholders even if the CIT board of directors has withdrawn, modified or qualified its recommendation? |
A: | Yes. Unless the merger agreement is terminated before the CIT special meeting, CIT is required to submit the CIT merger proposal to its stockholders even if the CIT board of directors has withdrawn or modified its recommendation. |
Q: | Are holders of First Citizens common stock entitled to appraisal or dissenters’ rights? |
A: | No. Holders of First Citizens common stock are not entitled to appraisal or dissenters’ rights under the Delaware General Corporation Law (the “DGCL”). For more information, see the section entitled “The Mergers—Appraisal or Dissenters’ Rights in the Mergers” beginning on page 129. |
Q: | Are holders of CIT common stock entitled to appraisal or dissenters’ rights? |
A: | No. Holders of CIT common stock are not entitled to appraisal or dissenters’ rights under the DGCL. For more information, see the section entitled “The Mergers—Appraisal or Dissenters’ Rights in the Mergers” beginning on page 129. |
Q: | Are there any risks that I should consider in deciding whether to vote for the approval of the First Citizens stock issuance proposal or the approval of the CIT merger proposal, or the other proposals to be considered at the First Citizens special meeting and the CIT special meeting, respectively? |
A: | Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 43. You also should read and carefully consider the risk factors of First Citizens and CIT contained in the documents that are incorporated by reference into this joint proxy statement/prospectus. |
Q: | What are the material U.S. federal income tax consequences of the first step merger and the second step merger to holders of CIT common stock and CIT preferred stock? |
A: | The first step merger and the second step merger have been structured to qualify as a reorganization for federal income tax purposes, and it is a condition to our respective obligations to complete the mergers that First Citizens and CIT each receive a legal opinion to the effect that the first step merger and the second step merger will so qualify. Accordingly, holders of CIT common stock and CIT preferred stock generally will not recognize any gain or loss for U.S. federal income tax purposes on the exchange of their CIT common stock for First Citizens Class A common stock and CIT preferred stock for new First Citizens preferred stock, as applicable, in the first step merger, except for any gain or loss that may result from the receipt of cash instead of a fractional share of First Citizens Class A common stock. You should be aware that the tax consequences to you of the mergers may depend upon your own situation. In addition, you may |
Q: | When are the mergers expected to be completed? |
A: | First Citizens and CIT expect the mergers to close in the first half of 2021. However, neither First Citizens nor CIT can predict the actual date on which the mergers will be completed, or if the mergers will be completed at all, because completion is subject to conditions and factors outside the control of both companies. First Citizens and CIT must first obtain the approval of holders of CIT common stock for the CIT merger proposal and obtain the approval of holders of First Citizens common stock for the First Citizens stock issuance proposal, as well as obtain necessary regulatory approvals and satisfy certain other closing conditions. |
Q: | What are the conditions to completion of the mergers? |
A: | As more fully described in this joint proxy statement/prospectus and in the merger agreement, the obligations of First Citizens and CIT to complete the mergers are subject to the satisfaction or waiver (where legally permissible) of certain closing conditions contained in the merger agreement, including the receipt of required regulatory approvals and the expiration of statutory waiting periods without the imposition of any materially burdensome regulatory condition, the receipt of certain tax opinions, approval by holders of First Citizens common stock of the First Citizens stock issuance proposal and approval by holders of CIT common stock of the CIT merger proposal. For more information, see the section entitled “The Merger Agreement—Conditions to Completion of the Mergers” beginning on page 144. |
Q: | What happens if the mergers are not completed? |
A: | If the mergers are not completed, holders of CIT common stock will not receive any consideration for their shares of CIT common stock in connection with the mergers. Instead, CIT will remain an independent public company, CIT common stock and CIT series B preferred stock will continue to be listed on the NYSE, and First Citizens will not complete the issuance of shares of First Citizens Class A common stock and new First Citizens preferred stock pursuant to the merger agreement. In addition, if the merger agreement is terminated in certain circumstances, a termination fee of $64 million may be payable by either First Citizens or CIT to the other party, as applicable. See the section entitled “The Merger Agreement—Termination Fee” beginning on page 146 for a more detailed discussion of the circumstances under which a termination fee will be required to be paid. |
Q: | Should I send in my stock certificates now? |
A: | No. Please do not send in your stock certificates with your proxy. After the mergers are completed, Broadridge Corporate Issuer Solutions, Inc. (the “exchange agent”) will send you instructions for exchanging CIT stock certificates for the consideration to be received in the mergers. See the section entitled “The Merger Agreement—Conversion of Shares; Exchange of CIT Stock Certificates” beginning on page 134. |
Q: | What should I do if I receive more than one set of voting materials for the same special meeting? |
A: | If you hold shares of First Citizens common stock or CIT common stock in “street name” and also directly in your name as a holder of record or otherwise or if you hold shares of First Citizens common stock or CIT common stock in more than one (1) brokerage account, you may receive more than one (1) set of voting materials relating to the same special meeting. |
Q: | Who can help answer my questions? |
A: | First Citizens stockholders: If you have any questions about the mergers or how to submit your proxy or voting instruction card, or if you need additional copies of this document or the enclosed proxy card or voting instruction card, you should contact Investor Relations at 4300 Six Forks Road Raleigh, North Carolina 27609, (919) 716-7000, or First Citizens’ proxy solicitor, Alliance Advisors, LLC, at the following address, e-mail address or toll-free phone number: 200 Broadacres Drive, 3rd Floor, Bloomfield, New Jersey 07003, pcasey@allianceadvisors.com, (833) 670-0697. |
| | First Citizens Class A Common Stock | | | CIT Common Stock | | | Implied Value of One Share of CIT Common Stock | |
October 15, 2020 | | | $353.32 | | | $19.74 | | | $21.91 |
December 18, 2020 | | | $585.26 | | | $36.51 | | | $36.29 |
• | Certain of First Citizens’ directors and executive officers will continue to serve as directors or executive officers, as applicable, of the combined company following the closing of the mergers; and |
• | First Citizens’ directors and executive officers are entitled to continued indemnification and insurance coverage under their existing agreements with First Citizens. |
• | Unvested CIT equity awards held by the CIT non-employee directors that are not subject to a deferral election will automatically vest at the effective time in accordance with their terms and automatically be converted into the right to receive the merger consideration; |
• | First Citizens has entered into an employment letter agreement with Ms. Ellen Alemany that will be effective at the closing of the mergers and provide Ms. Alemany with (i) an annualized base salary of $1,000,000, (ii) a guaranteed annual bonus of $6,850,000 at the conclusion of each 12-month period during the two year period immediately following the closing of the mergers, and (iii) a retention bonus of $13,000,000, payable in a lump sum following the second anniversary of the closing of the mergers in lieu of all compensation and benefits which she would otherwise have been entitled to receive upon a qualifying termination under existing severance arrangements with CIT; |
• | First Citizens has also entered into retention letter agreements with Mr. David Harnisch and one other executive officer that will be effective at the closing of the mergers and provide certain compensation and benefits in connection with such executives’ employment following the effective time; |
• | Certain of CIT’s executive officers are party to letter agreements with CIT that clarify certain provisions of the CIT Group Inc. Employee Severance Plan, providing for, among other things, benefits upon both a change in control and a subsequent qualifying termination; |
• | At the closing of the mergers, certain of CIT’s directors and executive officers will continue to serve as directors or executive officers, as applicable, of the combined company; and |
• | CIT directors and executive officers are entitled to continued indemnification and insurance coverage under the merger agreement. |
• | eleven (11) current First Citizens directors, which will include Frank B. Holding, Jr., the current Chairman and Chief Executive Officer of First Citizens; and |
• | three (3) current CIT directors, which will include Ellen R. Alemany, the current Chairwoman and Chief Executive Officer of CIT. |
• | adoption of the merger agreement by the stockholders of CIT; |
• | approval of the issuance of the shares of First Citizens Class A common stock by the stockholders of First Citizens; |
• | authorization for listing on Nasdaq, subject to official notice of issuance, of the shares of First Citizens Class A common stock and shares of the newly created First Citizens series C preferred stock to be issued pursuant to the merger agreement; |
• | all regulatory authorizations, consents, orders and approvals from (and the expiration or termination of all statutory waiting periods in respect thereof) the Financial Industry Regulatory Authority (“FINRA”), |
• | effectiveness of the registration statement of which this joint proxy statement/prospectus is a part, and the absence of any stop order suspending the effectiveness of the registration statement, or proceedings for such purpose initiated or threatened by the SEC and not withdrawn; |
• | no order, injunction or other legal restraint preventing the consummation of the mergers or making the completion of the first step merger, the second step merger, the bank merger or the other transactions contemplated by the merger agreement illegal; |
• | subject to materiality standards provided in the merger agreement, the accuracy of the representations and warranties of First Citizens and CIT in the merger agreement; |
• | performance in all material respects by each of First Citizens and CIT of their respective obligations, covenants and agreements under the merger agreement; and |
• | receipt by each of First Citizens and CIT of an opinion from counsel as to certain tax matters. |
• | by mutual written consent of First Citizens and CIT; |
• | by either First Citizens or CIT if any governmental entity that must grant a requisite regulatory approval has denied approval of the first step merger, the second step merger or the bank merger and such denial has become final and nonappealable or any governmental entity of competent jurisdiction has issued a final and nonappealable order, injunction, decree or other legal restraint or prohibition permanently enjoining or otherwise prohibiting or making illegal the completion of the first step merger, the second step merger or the bank merger, unless the failure to obtain a requisite regulatory approval is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations, covenants and agreements under the merger agreement; |
• | by either First Citizens or CIT if the first step merger has not been completed on or before October 15, 2021 (the “termination date”), unless the failure of the first step merger to be completed by such date is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations, covenants and agreements under the merger agreement; |
• | by either First Citizens or CIT (provided that the terminating party is not then in material breach of any representation, warranty, obligation, covenant or other agreement contained in the merger agreement) if there is a breach of any of the obligations, covenants or agreements or any of the representations or warranties (or any such representation or warranty ceases to be true) set forth in the merger agreement on the part of CIT, in the case of a termination by First Citizens, or First Citizens, in the case of a termination by CIT, which breach or failure to be true, either individually or in the aggregate with all other breaches by such party (or failures of such representations or warranties to be true), would constitute, if occurring or continuing on the closing date, the failure of an applicable closing condition of the terminating party and which is not cured within forty-five (45) days following written notice to the other party, or by its nature or timing cannot be cured during such period (or such fewer days as remain prior to the termination date); |
• | by either First Citizens or CIT if: (1) the adoption of the merger agreement by the stockholders of CIT has not been obtained at the CIT special meeting or at any adjournment or postponement thereof taken |
• | by either First Citizens or CIT if, prior to obtaining the requisite vote from their respective stockholders, the CIT board of directors or the First Citizens board of directors authorizes CIT or First Citizens, respectively, to enter into an alternative acquisition agreement in response to a superior proposal; |
• | by either First Citizens or CIT if, prior to obtaining the requisite vote from their respective stockholders, the CIT board of directors or the First Citizens board of directors, respectively, has made a recommendation change or breaches in any material respect its obligations relating to non-solicitation of acquisition proposals or its obligations related to stockholder approval and the board of directors’ recommendation. |
• | approve the First Citizens stock issuance proposal; and |
• | approve the First Citizens adjournment proposal. |
• | approve the CIT merger proposal; |
• | approve, on an advisory (non-binding) basis, the CIT compensation proposal; and |
• | approve the CIT adjournment proposal. |
| | As of and for the Nine Months Ended September 30, (unaudited) | | | As of and for the Year Ended December 31, | ||||||||||||||||
(Dollars in millions, except share data) | | | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 |
SUMMARY OF OPERATIONS | | | | | | | | | | | | | | | |||||||
Interest income | | | $1,107.2 | | | $1,050.0 | | | $1,404.0 | | | $1,245.8 | | | $1,103.7 | | | $987.8 | | | $969.2 |
Interest expense | | | 77.7 | | | 65.7 | | | 92.6 | | | 36.9 | | | 43.8 | | | 43.1 | | | 44.3 |
Net interest income | | | 1,029.5 | | | 984.2 | | | 1,311.4 | | | 1,208.9 | | | 1,059.9 | | | 944.7 | | | 924.9 |
Provision for credit losses(1) | | | 52.9 | | | 23.7 | | | 31.4 | | | 28.5 | | | 25.7 | | | 32.9 | | | 20.7 |
Net interest income after provision for credit losses | | | 976.5 | | | 960.5 | | | 1,279.9 | | | 1,180.4 | | | 1,034.2 | | | 911.7 | | | 904.2 |
Gain on acquisitions | | | — | | | — | | | — | | | — | | | 134.7 | | | 5.8 | | | 42.9 |
Noninterest income excluding gain on acquisitions | | | 350.0 | | | 311.5 | | | 415.9 | | | 400.1 | | | 387.2 | | | 371.3 | | | 424.2 |
Noninterest expense | | | 883.3 | | | 811.5 | | | 1,103.7 | | | 1,077.0 | | | 1,012.5 | | | 937.8 | | | 1,038.9 |
Income before income taxes | | | 443.2 | | | 460.5 | | | 592.0 | | | 503.6 | | | 543.7 | | | 351.1 | | | 332.4 |
Income taxes | | | 89.5 | | | 105.0 | | | 134.7 | | | 103.3 | | | 219.9 | | | 125.6 | | | 122.0 |
Net income | | | 353.6 | | | 355.5 | | | 457.4 | | | 400.3 | | | 323.8 | | | 225.5 | | | 210.4 |
Net income available to common shareholders | | | $344.2 | | | $355.5 | | | $457.4 | | | $400.3 | | | $323.8 | | | $225.5 | | | $210.4 |
PER COMMON SHARE DATA | | | | | | | | | | | | | | | |||||||
Net income | | | $33.96 | | | $31.50 | | | $41.05 | | | $33.53 | | | $26.96 | | | $18.77 | | | $17.52 |
Cash dividends | | | 1.20 | | | 1.20 | | | 1.60 | | | 1.45 | | | 1.25 | | | 1.20 | | | 1.20 |
Book value at period end | | | 380.43 | | | 327.86 | | | 337.38 | | | 300.04 | | | 277.60 | | | 250.82 | | | 239.14 |
SELECTED PERIOD-END BALANCES | | | | | | | | | | | | | | | |||||||
Total assets | | | $48,666.9 | | | $37,748.3 | | | $39,824.5 | | | $35,408.6 | | | $34,527.5 | | | $32,990.8 | | | $31,475.9 |
Investment securities | | | 9,860.6 | | | 7,167.7 | | | 7,173.0 | | | 6,834.4 | | | 7,180.3 | | | 7,006.7 | | | 6,861.5 |
Loans and leases | | | 32,845.1 | | | 27,196.5 | | | 28,881.5 | | | 25,523.3 | | | 23,596.8 | | | 21,737.9 | | | 20,240.0 |
Allowance for credit losses(1) | | | 223.9 | | | 226.8 | | | 225.1 | | | 223.7 | | | 221.9 | | | 218.8 | | | 206.2 |
Deposits | | | 42,250.6 | | | 32,743.3 | | | 34,431.2 | | | 30,672.5 | | | 29,266.3 | | | 28,161.3 | | | 26,930.8 |
Borrowings | | | 1,945.9 | | | 976.1 | | | 1,326.9 | | | 892.2 | | | 1,564.1 | | | 1,436.4 | | | 1,299.0 |
Common shareholders’ equity | | | $3,734.5 | | | $3,568.5 | | | $3,586.2 | | | $3,489.0 | | | $3,334.1 | | | $3,012.4 | | | $2,872.1 |
Shareholders’ equity | | | $4,074.4 | | | $3,568.5 | | | $3,586.2 | | | $3,489.0 | | | $3,334.1 | | | $3,012.4 | | | $2,872.1 |
Shares outstanding | | | 9.8 | | | 10.9 | | | 10.6 | | | 11.6 | | | 12.0 | | | 12.0 | | | 12.0 |
SELECTED RATIOS AND OTHER DATA | | | | | | | | | | | | | | | |||||||
Rate of return on average assets | | | 1.05% | | | 1.29% | | | 1.23% | | | 1.15% | | | 0.94% | | | 0.70% | | | 0.68% |
Rate of return on average shareholders’ equity | | | 12.59 | | | 13.41 | | | 12.88 | | | 11.69 | | | 10.10 | | | 7.51 | | | 7.52 |
Average equity to average assets ratio | | | 8.69 | | | 9.64 | | | 9.56 | | | 9.81 | | | 9.35 | | | 9.25 | | | 9.00 |
Net yield on interest-earning assets (taxable equivalent) | | | 3.23 | | | 3.80 | | | 3.74 | | | 3.69 | | | 3.30 | | | 3.14 | | | 3.22 |
Net charge-offs (annualized) to average loans and leases | | | 0.07 | | | 0.10 | | | 0.11 | | | 0.11 | | | 0.10 | | | 0.10 | | | 0.10 |
Allowance for credit losses to total loans and leases(2): | | | | | | | | | | | | | | | |||||||
PCD | | | 5.07 | | | 1.34 | | | 1.35 | | | 1.51 | | | 1.31 | | | 1.70 | | | 1.72 |
Non-PCD | | | 0.61 | | | 0.82 | | | 0.77 | | | 0.86 | | | 0.93 | | | 0.98 | | | 0.98 |
Total | | | 0.68 | | | 0.83 | | | 0.78 | | | 0.88 | | | 0.94 | | | 1.01 | | | 1.02 |
Ratio of total nonperforming assets to total loans, leases and other real estate owned | | | 0.73 | | | 0.57 | | | 0.58 | | | 0.52 | | | 0.61 | | | 0.67 | | | 0.83 |
Tier 1 risk-based capital ratio | | | 11.48 | | | 11.80 | | | 10.86 | | | 12.67 | | | 12.88 | | | 12.42 | | | 12.65 |
Common equity Tier 1 ratio | | | 10.43 | | | 11.80 | | | 10.86 | | | 12.67 | | | 12.88 | | | 12.42 | | | 12.51 |
Total risk-based capital ratio | | | 13.70 | | | 13.09 | | | 12.12 | | | 13.99 | | | 14.21 | | | 13.85 | | | 14.03 |
Leverage capital ratio | | | 7.80 | | | 9.18 | | | 8.81 | | | 9.77 | | | 9.47 | | | 9.05 | | | 8.96 |
(1) | First Citizens adopted ASC Topic 326 (“CECL”) utilizing the modified retrospective approach. First Citizens did not restate selected financial data for the periods prior to 2020 presented above. |
(2) | Upon adoption of CECL as of January 1, 2020, the concept of purchased credit impaired loans under ASC 310-30 was eliminated. Loans and leases determined at the date of acquisition, to have experienced more than insignificant credit quality since origination are accounted for under the guidance in ASC Topic 326-20, Credit Losses as purchased credit deteriorated assets. PCD loans and leases are recorded at fair value at the date of acquisition with an initial reserve recorded directly to the allowance for credit losses. Provision is recorded if there is additional credit deterioration after the acquisition date. Non-PCD loans include originated and purchased non-credit deteriorated loans. Loans previously classified as PCI were determined to be PCD. |
| | Nine Months Ended September 30, (unaudited) | | | At or for the Years Ended December 31, | ||||||||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | |
Select Statement of Operations Data | | | | | | | | | | | | | | | |||||||
Net interest revenue | | | $790.1 | | | $813.2 | | | $1,064.8 | | | $1,075.3 | | | $1,117.9 | | | $1,158.3 | | | $713.8 |
Provision for credit losses | | | 800.8 | | | 88.2 | | | 110.8 | | | 171.0 | | | 114.6 | | | 194.7 | | | 158.6 |
Total non-interest income | | | 991.2 | | | 946.3 | | | 1,272.9 | | | 1,382.8 | | | 1,371.6 | | | 1,182.2 | | | 1,167.7 |
Total non-interest expenses | | | 1,720.4 | | | 1,227.3 | | | 1,603.0 | | | 1,650.1 | | | 2,183.3 | | | 2,124.9 | | | 1,536.9 |
(Loss) income from continuing operations, net of tax | | | (623.9) | | | 398.8 | | | 529.4 | | | 472.1 | | | 259.4 | | | (182.6) | | | 724.1 |
Net (loss) income | | | (623.9) | | | 399.3 | | | 529.9 | | | 447.1 | | | 468.2 | | | (848.0) | | | 1,034.1 |
Net (loss) income available to common shareholders | | | (642.8) | | | 389.9 | | | 511.0 | | | 428.2 | | | 458.4 | | | (848.0) | | | 1,034.1 |
Per Common Share Data | | | | | | | | | | | | | | | |||||||
Diluted (loss) income per common share - continuing operations | | | $(6.54) | | | $3.99 | | | $5.27 | | | $3.82 | | | $1.52 | | | $(0.90) | | | $3.89 |
Diluted (loss) income per common share | | | (6.54) | | | 4.00 | | | 5.27 | | | 3.61 | | | 2.80 | | | (4.20) | | | 5.55 |
Book value per common share | | | 53.17 | | | 60.27 | | | 61.37 | | | 55.70 | | | 53.25 | | | 49.50 | | | 54.45 |
Dividends declared per common share | | | 1.05 | | | 1.05 | | | 1.30 | | | 0.82 | | | 0.61 | | | 0.60 | | | 0.60 |
Dividend payout ratio | | | NM | | | 26.3% | | | 24.7% | | | 22.7% | | | 21.8% | | | NM | | | 10.8% |
Performance Ratios | | | | | | | | | | | | | | | |||||||
Return (available to common shareholders; continuing operations) on average common stockholders' equity(1) | | | NM | | | 9.25% | | | 9.03% | | | 7.30% | | | 3.53% | | | NM | | | 11.96% |
Average total equity to average total asset ratio | | | 10.2% | | | 12.1% | | | 12.2% | | | 13.8% | | | 16.1% | | | 17.0% | | | 17.9% |
Balance Sheet Data | | | | | | | | | | | | | | | |||||||
Loans including receivables pledged | | | $37,319.6 | | | $31,345.5 | | | $30,998.9 | | | $30,795.4 | | | $29,113.9 | | | $29,535.9 | | | $30,518.7 |
Allowance for credit losses | | | (1,206.2) | | | (486.2) | | | (482.6) | | | (489.7) | | | (431.1) | | | (432.6) | | | (347.0) |
Operating lease equipment, net | | | 7,799.3 | | | 7,099.9 | | | 7,319.7 | | | 6,970.6 | | | 6,738.9 | | | 7,486.1 | | | 6,851.7 |
Total cash and deposits | | | 6,705.6 | | | 1,824.6 | | | 2,685.6 | | | 1,795.6 | | | 1,718.7 | | | 6,430.6 | | | 7,652.4 |
Investment securities | | | 6,608.8 | | | 6,109.7 | | | 6,276.8 | | | 6,233.8 | | | 6,469.9 | | | 4,491.1 | | | 2,953.7 |
Total assets | | | 60,865.0 | | | 51,403.1 | | | 50,832.8 | | | 48,537.4 | | | 49,278.7 | | | 64,170.2 | | | 67,391.9 |
Deposits | | | 44,706.2 | | | 35,910.0 | | | 35,139.5 | | | 31,239.5 | | | 29,569.3 | | | 32,304.3 | | | 32,761.4 |
Borrowings | | | 7,284.7 | | | 6,423.2 | | | 6,473.4 | | | 8,118.8 | | | 8,974.4 | | | 14,935.5 | | | 16,350.3 |
Total common stockholders’ equity | | | 5,239.0 | | | 5,708.5 | | | 5,814.0 | | | 5,621.6 | | | 6,995.0 | | | 10,002.7 | | | 10,944.7 |
Credit Quality | | | | | | | | | | | | | | | |||||||
Non-accrual loans as a percentage of loans | | | 1.73% | | | 0.95% | | | 1.05% | | | 0.92% | | | 0.76% | | | 0.94% | | | 0.83% |
Net charge-offs as a percentage of average loans | | | 1.02% | | | 0.39% | | | 0.39% | | | 0.39% | | | 0.39% | | | 0.37% | | | 0.58% |
Allowance for loan losses as a percentage of loans | | | 3.23% | | | 1.55% | | | 1.56% | | | 1.59% | | | 1.48% | | | 1.46% | | | 1.14% |
Capital Ratios | | | | | | | | | | | | | | | |||||||
CET1 capital ratio (fully phased-in) | | | 9.9% | | | 11.6% | | | 12.0% | | | 12.0% | | | 14.4% | | | 13.8% | | | 12.6% |
Tier 1 capital ratio (fully phased-in) | | | 10.9% | | | 12.3% | | | 13.2% | | | 12.7% | | | 15.1% | | | 13.8% | | | 12.6% |
Total capital ratio (fully phased-in) | | | 13.1% | | | 14.3% | | | 15.4% | | | 14.8% | | | 16.2% | | | 14.6% | | | 13.2% |
(1) | 2017 and prior periods are adjusted to reflect an estimated reduction in equity for Commercial Air, that was transferred to discontinued operations and sold. |
• | changes in the trading price for First Citizens’ Class A common stock; |
• | net cash used or generated in First Citizens’ or CIT’s operations between the signing of the merger agreement and the completion of the mergers; |
• | the timing of the completion of the mergers, changes in total merger-related expenses, and integration costs, including costs associated with systems implementation, severance, and other costs related to exit or disposal activities; |
• | other changes in First Citizens’ or CIT’s net assets that occur prior to the completion of the mergers, which could cause material differences in the information presented below; and |
• | changes in the financial results of the combined company. |
• | the accompanying notes to the unaudited pro forma condensed combined financial statements; |
• | First Citizens’ separate audited historical consolidated financial statements and accompanying notes as of and for the year ended December 31, 2019, included in First Citizens’ Annual Report on Form 10-K for the year ended December 31, 2019; |
• | CIT’s separate audited historical consolidated financial statements and accompanying notes as of and for the year ended December 31, 2019, included in CIT’s Annual Report on Form 10-K for the year ended December 31, 2019; |
• | First Citizens’ separate unaudited historical consolidated financial statements and accompanying notes as of and for the nine months ended September 30, 2020, included in First Citizens’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2020; |
• | CIT’s separate unaudited historical consolidated financial statements and accompanying notes as of and for the nine months ended September 30, 2020, included in CIT’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020; and |
• | other information pertaining to First Citizens and CIT contained in or incorporated by reference into this joint proxy statement/prospectus. See the sections entitled “—Selected Consolidated Historical Financial Data of First Citizens” and “—Selected Consolidated Historical Financial Data of CIT” included elsewhere in this joint proxy statement/prospectus. |
(Dollars in millions, except per share data) | | | First Citizens as Reported | | | CIT as Reported | | | Transaction Accounting Adjustments | | | (Note 3) | | | Pro Forma First Citizens & CIT |
Assets | | | | | | | | | | | |||||
Cash and due from banks | | | $352.4 | | | $175.7 | | | $— | | | | | $528.1 | |
Overnight investments | | | 3,137.9 | | | 6,529.9 | | | — | | | | | 9,667.8 | |
Investment securities | | | 9,860.6 | | | 6,608.8 | | | — | | | | | 16,469.4 | |
Assets held for sale | | | 120.3 | | | 56.7 | | | — | | | | | 177.0 | |
Loans and leases | | | 32,845.1 | | | 37,319.6 | | | 34.1 | | | (1) | | | 70,198.8 |
Allowance for credit losses | | | (223.9) | | | (1,206.2) | | | — | | | | | (1,430.1) | |
Net loans and leases | | | 32,621.2 | | | 36,113.4 | | | 34.1 | | | | | 68,768.7 | |
Operating lease equipment, net | | | — | | | 7,799.3 | | | — | | | | | 7,799.3 | |
Premises and equipment | | | 1,255.3 | | | 191.6 | | | — | | | | | 1,446.9 | |
Goodwill | | | 350.3 | | | 140.4 | | | (140.4) | | | (2) | | | 350.3 |
Other intangible assets | | | 54.2 | | | 143.4 | | | (59.1) | | | (3) | | | 138.5 |
Income earned not collected and other assets | | | 914.7 | | | 3,105.8 | | | — | | | | | 4,020.5 | |
Total assets | | | $48,666.9 | | | $60,865.0 | | | $(165.4) | | | | | $109,366.5 | |
Liabilities | | | | | | | | | | | |||||
Deposits: | | | | | | | | | | | |||||
Noninterest-bearing | | | $18,234.6 | | | $3,022.1 | | | $— | | | | | $21,256.7 | |
Interest-bearing | | | 24,016.0 | | | 41,684.1 | | | 161.9 | | | (4) | | | 65,862.0 |
Total deposits | | | 42,250.6 | | | 44,706.2 | | | 161.9 | | | | | 87,118.7 | |
Credit balances of factoring clients | | | — | | | 1,320.2 | | | — | | | | | 1,320.2 | |
Borrowings | | | 1,946.0 | | | 7,284.7 | | | 215.3 | | | (5) | | | 9,446.0 |
Deferred tax liability | | | 32.7 | | | 78.6 | | | 33.5 | | | (6) | | | 144.8 |
Other liabilities | | | 363.2 | | | 1,711.3 | | | 17.0 | | | (7) | | | 2,091.5 |
Total liabilities | | | 44,592.5 | | | 55,101.0 | | | 427.7 | | | | | 100,121.2 | |
Shareholders’ equity | | | | | | | | | | | |||||
Common stock: | | | | | | | | | | | |||||
Class A | | | 8.8 | | | 1.6 | | | 4.6 | | | (8) | | | 15.0 |
Class B | | | 1.0 | | | — | | | — | | | | | 1.0 | |
Preferred stock | | | 339.9 | | | 525.0 | | | — | | | | | 864.9 | |
Surplus | | | — | | | 6,882.1 | | | (3,289.6) | | | (9) | | | 3,592.5 |
Retained earnings | | | 3,738.4 | | | 1,467.1 | | | (419.9) | | | (10) | | | 4,785.6 |
Accumulated other comprehensive loss | | | (13.7) | | | 46.4 | | | (46.4) | | | (11) | | | (13.7) |
Treasury stock | | | — | | | (3,158.2) | | | 3,158.2 | | | (12) | | | — |
Total shareholders’ equity | | | 4,074.4 | | | 5,764.0 | | | (593.1) | | | | | 9,245.3 | |
Total liabilities and shareholders’ equity | | | $48,666.9 | | | $60,865.0 | | | $(165.4) | | | | | $109,366.5 | |
Book value per share(a) | | | $380.43 | | | $53.17 | | | | | | | $524.63 |
(a) | The pro forma book value per share amounts were calculated by totaling the historic stockholders’ equity (excluding preferred stock) of First Citizens and CIT, adjusted for purchase accounting entries, and dividing the resulting amount by the pro forma shares of First Citizens and CIT, giving effect to the merger as if it had occurred as of the beginning of the period presented. The pro forma shares of First Citizens and CIT reflect historical shares, plus historical shares of CIT, as adjusted based on the fixed exchange ratio of 0.062 shares of First Citizens Class A common stock for each share of CIT common stock. The number of shares to be issued is subject to adjustment in certain limited circumstances. See Note 2 for pro forma share information. |
(Dollars in millions, except share and per share data) | | | First Citizens as Reported | | | CIT as Reported | | | Transaction Accounting Adjustments | | | (Note 3) | | | Pro Forma First Citizens & CIT |
Interest income | | | | | | | | | | | |||||
Loans and leases | | | $988.0 | | | $1,280.6 | | | $(8.5) | | | (13) | | | $2,260.1 |
Investment securities interest and dividend income | | | 113.3 | | | 93.7 | | | (28.5) | | | (14) | | | 178.5 |
Overnight investments | | | 5.8 | | | 9.5 | | | — | | | | | 15.3 | |
Total interest income | | | 1,107.1 | | | 1,383.8 | | | (37.0) | | | | | 2,453.9 | |
Interest expense | | | | | | | | | | | |||||
Deposits | | | 55.6 | | | 398.1 | | | (46.3) | | | (15) | | | 407.4 |
Borrowings | | | 22.1 | | | 195.6 | | | (53.8) | | | (16) | | | 163.9 |
Total interest expense | | | 77.7 | | | 593.7 | | | (100.1) | | | | | 571.3 | |
Net interest income | | | 1,029.4 | | | 790.1 | | | 63.1 | | | | | 1,882.6 | |
Provision for credit losses | | | 52.9 | | | 800.8 | | | — | | | | | 853.7 | |
Net interest income after provision for credit losses | | | 976.5 | | | (10.7) | | | 63.1 | | | | | 1,028.9 | |
Noninterest income | | | 350.0 | | | 991.2 | | | — | | | | | 1,341.2 | |
Noninterest expense | | | 883.3 | | | 1,720.4 | | | (10.5) | | | (17) | | | 2,593.2 |
Income before income taxes | | | 443.2 | | | (739.9) | | | 73.6 | | | | | (223.1) | |
Income taxes | | | 89.6 | | | (116.0) | | | 15.4 | | | (18) | | | (11.0) |
Net income (loss) | | | $353.6 | | | $(623.9) | | | $58.2 | | | | | $(212.1) | |
Less: Preferred stock dividends | | | 9.4 | | | 18.9 | | | — | | | | | 28.3 | |
Net income (loss) available to common shareholders | | | $344.2 | | | $(642.8) | | | $58.2 | | | | | $(240.4) | |
Pro Forma Combined Per Share Data | | | | | | | | | | | |||||
(Common Stock)(a) | | | | | | | | | | | |||||
Earnings: | | | | | | | | | | | |||||
Basic | | | $33.96 | | | $(6.54) | | | | | | | $(14.75) | ||
Diluted(b) | | | $33.96 | | | $(6.54) | | | | | | | $(14.75) | ||
Weighted average common shares outstanding(a) (thousands): | | | | | | | | | | | |||||
Basic | | | 10,137 | | | 98,350 | | | (92,193) | | | (19) | | | 16,294 |
Diluted(b) | | | 10,137 | | | 98,350 | | | (92,193) | | | (19) | | | 16,294 |
(a) | The pro forma combined earnings per share amounts were calculated by totaling the historical earnings of First Citizens and CIT, adjusted for the transaction accounting adjustments, and dividing the resulting amount by the average pro forma shares of First Citizens and CIT, giving effect to the number of First Citizens Class A common shares to be issued in the first step merger as if such shares are issued as of the beginning of period presented. The First Citizens Class A common stock to be issued in the first step merger is based on the fixed exchange ratio of 0.062 shares of First Citizens Class A common stock for each share of CIT common stock. The number of shares to be issued in the first step merger is subject to adjustment in certain limited circumstances. See pro forma adjustment (19) in Note 3. |
(b) | Does not include the dilutive effect of CIT restricted stock units and performance stock units that are expected to vest after the merger close which were deemed immaterial. |
(Dollars in millions, except share and per share data) | | | First Citizens as Reported | | | CIT as Reported | | | Transaction Accounting Adjustments | | | (Note 3) | | | Pro Forma First Citizens & CIT |
Interest income | | | | | | | | | | | |||||
Loans and leases | | | $1,217.3 | | | $1,783.3 | | | $(11.4) | | | (13) | | | $2,989.2 |
Investment securities interest and dividend income | | | 160.5 | | | 196.4 | | | (47.5) | | | (14) | | | 309.4 |
Overnight investments | | | 26.2 | | | 37.1 | | | — | | | | | 63.3 | |
Total interest income | | | 1,404.0 | | | 2,016.8 | | | (58.9) | | | | | 3,361.9 | |
Interest expense | | | | | | | | | | | |||||
Deposits | | | 76.2 | | | 664.9 | | | (115.6) | | | (15) | | | 625.5 |
Borrowings | | | 16.4 | | | 287.1 | | | (71.8) | | | (16) | | | 231.7 |
Total interest expense | | | 92.6 | | | 952.0 | | | (187.4) | | | | | 857.2 | |
Net interest income | | | 1,311.4 | | | 1,064.8 | | | 128.5 | | | | | 2,504.7 | |
Provision for credit losses | | | 31.5 | | | 110.8 | | | 322.3 | | | (20) | | | 464.6 |
Net interest income after provision for credit losses | | | 1,279.9 | | | 954.0 | | | (193.8) | | | | | 2,040.1 | |
Noninterest income | | | 415.9 | | | 1,273.4 | | | 1,301.8 | | | (21) | | | 2,991.1 |
Noninterest expense | | | 1,103.7 | | | 1,603.0 | | | 0.8 | | | (17) | | | 2,707.5 |
Income before income taxes | | | 592.1 | | | 624.4 | | | 1,107.2 | | | | | 2,323.7 | |
Income taxes | | | 134.7 | | | 94.5 | | | (40.9) | | | (18) | | | 188.3 |
Net income | | | $457.4 | | | $529.9 | | | $1,148.1 | | | | | $2,135.4 | |
Less: Preferred stock dividends | | | — | | | 18.9 | | | — | | | | | 18.9 | |
Net income available to common shareholders | | | $457.4 | | | $511.0 | | | $1,148.1 | | | | | $2,116.5 | |
Pro Forma Combined Per Share Data | | | | | | | | | | | |||||
(Common Stock)(a) | | | | | | | | | | | |||||
Earnings: | | | | | | | | | | | |||||
Basic | | | $41.05 | | | $5.30 | | | | | | | $122.35 | ||
Diluted(b) | | | $41.05 | | | $5.27 | | | | | | | $122.35 | ||
Weighted average common shares outstanding(a) (thousands): | | | | | | | | | | | |||||
Basic | | | 11,141 | | | 96,503 | | | (90,346) | | | (19) | | | 17,298 |
Diluted(b) | | | 11,141 | | | 96,921 | | | (90,764) | | | (19) | | | 17,298 |
(a) | The pro forma combined earnings per share amounts were calculated by totaling the historical earnings of First Citizens and CIT, adjusted for the transaction accounting adjustments, and dividing the resulting amount by the average pro forma shares of First Citizens and CIT, giving effect to the number of First Citizens Class A common shares to be issued in the first step merger as if such shares are issued as of the beginning of period presented. The First Citizens Class A common stock to be issued in the first step merger is based on the fixed exchange ratio of 0.062 shares of First Citizens Class A common stock for each share of CIT common stock. The number of shares to be issued in the first step merger is subject to adjustment in certain limited circumstances. See pro forma adjustment (19) in Note 3. |
(b) | Does not include the dilutive effect of CIT restricted stock units and performance stock units that are expected to vest after the merger close which were deemed immaterial. |
Common share summary (thousands): | | | First Citizens Class A | | | First Citizens Class B | | | CIT |
Current shares outstanding as of December 18, 2020 | | | 8,811 | | | 1,005 | | | 98,538 |
CIT restricted stock units (“RSU”) and performance stock units (“PSU”) converted to shares(1) | | | | | | | 776 | ||
Total current shares outstanding to be exchanged | | | 8,811 | | | 1,005 | | | 99,314 |
Fixed exchange ratio: | | | | | | | 0.062 | ||
First Citizens Class A common shares issued to former CIT shareholders: | | | | | | | 6,157 |
(1) | Represents an estimate of CIT’s outstanding equity awards expected to be converted to shares based on a preliminary analysis of the vesting schedule. This does not include grants awarded subsequent to December 18, 2020. |
Pro forma ownership as of December 18, 2020 (thousands) | | | Pro Forma Shares | | | Percentage Ownership |
First Citizens Class A common shares held by current First Citizens shareholders | | | 8,811 | | | 55% |
First Citizens Class B common shares held by current First Citizens shareholders | | | 1,005 | | | 6% |
First Citizens Class A common shares issued to former CIT shareholders | | | 6,157 | | | 39% |
| | 15,973 | | | 100% |
(Dollars in millions, except share and per share data) | | | December 18, 2020 | | | 10% Increase | | | 10% Decrease |
Total First Citizens Class A common shares to be issued (thousands) | | | 6,157 | | | 6,157 | | | 6,157 |
Price per share of First Citizens Class A common stock | | | $585.26 | | | $643.79 | | | $526.73 |
Total pro forma purchase price from common stock | | | $3,603.7 | | | $3,964.1 | | | $3,243.3 |
CIT preferred stock converted to new First Citizens preferred stock | | | 525.0 | | | 525.0 | | | 525.0 |
Total pro forma purchase price consideration | | | $4,128.7 | | | $4,489.1 | | | $3,768.3 |
Preliminary bargain purchase gain | | | $1,301.8 | | | $941.4 | | | $1,662.2 |
(Dollars in millions) | | | | | ||
Purchase price consideration | | | | | $4,128.7 | |
Fair value of assets acquired: | | | | | ||
Cash and due from banks | | | $175.7 | | | |
Overnight investments | | | 6,529.9 | | | |
Investment securities | | | 6,608.8 | | | |
Loans held for sale | | | 56.7 | | | |
Net loans and leases | | | 36,469.8 | | | |
Operating lease equipment | | | 7,799.3 | | | |
Premises and equipment | | | 191.6 | | | |
Other intangible assets | | | 84.3 | | | |
Income earned not collected and other assets | | | 3,105.8 | | | |
Total assets acquired | | | 61,021.9 | | |
(Dollars in millions) | | | | | ||
Fair value of liabilities assumed: | | | | | ||
Deposits | | | 44,868.1 | | | |
Credit balances on factoring clients | | | 1,320.2 | | | |
Borrowings | | | 7,500.0 | | | |
Deferred tax liability | | | 179.8 | | | |
Other liabilities | | | 1,723.3 | | | |
Total liabilities assumed | | | $55,591.4 | | | |
Fair value of net assets acquired | | | | | 5,430.5 | |
Bargain purchase gain recorded for CIT | | | | | $1,301.8 |
(1) | Adjustment to CIT’s total loans, net of deferred costs, to reflect the estimated fair value of the loan portfolio as described in the table below. First Citizens utilized the publicly disclosed fair value information in Note 11 - Fair Value from CIT’s September 30, 2020 Form 10-Q as a proxy for the fair value for purposes of these pro forma financial statements. This adjustment also considers the gross up to PCD loans recorded along with initial allowance for credit losses on PCD loans. |
(Dollars in millions) | | | Amount |
Establish fair value mark on CIT’s loans | | | $(849.8) |
PCD gross-up of credit mark | | | 883.9 |
Total | | | $34.1 |
(2) | Elimination of CIT’s goodwill of $140.4 million associated with prior acquisitions. |
(3) | Adjustments to other intangible assets to eliminate CIT's other intangible assets of $143.4 million associated with prior acquisitions and record estimated core deposit intangible assets associated with the mergers of $84.3 million. Core deposit intangible assets recorded as a result of the mergers are expected to be amortized on a sum of years digit basis over a period of six years. |
(4) | Adjustment to record a fair value mark on CIT's stated maturity deposits of $161.9 million. First Citizens utilized the publicly disclosed fair value information in Note 11 - Fair Value from CIT’s September 30, 2020 Form 10-Q as a proxy for the fair value for purposes of these pro forma financial statements. |
(5) | Adjustment to record a fair value mark on CIT's borrowings of $215.3 million. First Citizens utilized the publicly disclosed fair value information in Note 11 - Fair Value from CIT’s September 30, 2020 Form 10-Q as a proxy for the fair value for purposes of these pro forma financial statements. |
(6) | Adjustments to the deferred taxes on the tax attributes acquired and fair value adjustments made during purchase accounting. |
(7) | Adjustment to reflect the liability of $17.0 million of acquisition-related costs for investment banker and legal fees associated with the transaction. |
(8) | Adjustment to reflect the issuance of 6.2 million shares of First Citizens Class A common stock with $1.00 par value per share in connection with the mergers and eliminating 163.2 million issued shares of CIT common stock with $0.01 par value per share. |
(9) | Adjustments to eliminate CIT’s surplus of $6.88 billion, record the issuance of First Citizens Class A |
(10) | Adjustments to eliminate CIT’s retained earnings of $1.47 billion and record the estimated bargain purchase gain of $1.30 billion, partially offset by the allowance recorded through provision for CIT's Non-PCD loans of $254.6 million net of tax. |
(11) | Adjustment to eliminate historical accumulated other comprehensive income of CIT. |
(12) | Eliminate CIT's historical treasury stock. |
(13) | Net adjustment to interest income to recognize estimated amortization of the premium on loans and leases as a result of the application of purchase accounting as of the transaction date. |
(14) | Adjustment to interest income to recognize estimated amortization associated with recording CIT's investment securities at fair value as of transaction date. |
(15) | Adjustment to interest expense to recognize estimated amortization associated with recording CIT's stated maturity deposits at fair value as of transaction date. |
(16) | Adjustment to interest expense to recognize estimated amortization associated with recording CIT's borrowings at fair value as of transaction date. |
(17) | Adjustment to eliminate CIT's amortization of intangible assets from previous transactions and record new amortization for CIT's core deposit intangible. |
(18) | Adjustment to recognize the tax impact related to pro forma adjustments at a tax rate of 21.0%, which represents the statutory federal tax rate. |
(19) | Adjustment to eliminate CIT's average common shares outstanding during the period presented and recognize $6.2 million related to the issuance of 6.2 million shares of First Citizens Class A common stock at $1 par value based on CIT's 99.3 million common shares outstanding, adjusted for restricted stock units (RSU), at September 30, 2020 and the merger exchange ratio of 0.062 shares. |
(20) | Adjustment to record provision expense on CIT's Non-PCD loans of $322.3 million. |
(21) | Bargain purchase gain of $1.30 billion which is not taxable. |
Comparative per share data | | | First Citizens Historical | | | CIT Historical | | | Pro Forma Combined |
Book value per share | | | | | | | |||
As of September 30, 2020 | | | $380.43 | | | $53.17 | | | $524.63 |
As of December 31, 2019 | | | 337.38 | | | 61.37 | | | 505.85 |
Cash dividends paid | | | | | | | |||
For the nine months ended September 30, 2020 | | | 1.20 | | | 1.05 | | | 1.20 |
For the year ended December 31, 2019 | | | 1.60 | | | 1.30 | | | 1.60 |
Basic earnings | | | | | | | |||
For the nine months ended September 30, 2020 | | | 33.96 | | | (6.54) | | | (14.75) |
For the year ended December 31, 2019 | | | 41.05 | | | 5.30 | | | 122.35 |
Diluted earnings(a) | | | | | | | |||
For the nine months ended September 30, 2020 | | | 33.96 | | | (6.54) | | | (14.75) |
For the year ended December 31, 2019 | | | 41.05 | | | 5.27 | | | 122.35 |
(a) | Does not include the dilutive effect of CIT restricted stock units and performance stock units that are expected to vest after the merger close which were deemed immaterial. |
• | the risk that the cost savings, any revenue synergies and other anticipated benefits of the proposed mergers 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 condition of the economy and competitive factors in areas where First Citizens and CIT do business; |
• | disruption to the parties’ businesses as a result of the announcement and pendency of the proposed mergers and diversion of management’s attention from ongoing business operations and opportunities; |
• | 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 merger agreement; |
• | 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; |
• | the failure to obtain the necessary approvals of the stockholders of First Citizens and/or CIT; |
• | the outcome of any legal proceedings that may be instituted against First Citizens and/or CIT; |
• | 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 mergers); |
• | 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 mergers; |
• | the failure of any of the closing conditions in the merger agreement to be satisfied on a timely basis or at all; |
• | delays in closing the mergers; |
• | the possibility that the mergers may be more expensive to complete than anticipated, including as a result of unexpected factors or events; |
• | the dilution caused by First Citizens’ issuance of additional shares of its capital stock in connection with the mergers; |
• | general competitive, economic, political and market conditions; |
• | 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 |
• | the impact of the COVID-19 pandemic on First Citizens’ and/or CIT’s businesses, the ability to complete the mergers and/or any of the other foregoing risks. |
• | limit the combined company’s ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; |
• | restrict the combined company from making strategic acquisitions or cause the combined company to make non-strategic divestitures; |
• | restrict the combined company from paying dividends to its stockholders; |
• | increase the combined company’s vulnerability to general economic and industry conditions; and |
• | require a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on the combined company’s indebtedness and dividends on the preferred stock, thereby reducing the combined company’s ability to use cash flows to fund its operations, capital expenditures and future business opportunities. |
• | the First Citizens stock issuance proposal; and |
• | the First Citizens adjournment proposal. |
• | Vote required: Under applicable Nasdaq Listing Rules, approval of the First Citizens stock issuance proposal requires the affirmative vote of a majority of the total votes cast by the holders of First Citizens common stock at the First Citizens special meeting. |
• | Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote at the First Citizens special meeting or fail to instruct your bank, broker, trustee or other nominee how to vote with respect to the First Citizens stock issuance proposal, you will not be deemed to have cast a vote with respect to the First Citizens stock issuance proposal and it will have no effect on the First Citizens stock issuance proposal. |
• | Vote required: Approval of the First Citizens adjournment proposal requires the affirmative vote of a majority of the total votes cast by the holders of First Citizens common stock at the First Citizens special meeting. |
• | Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote at the First Citizens special meeting or fail to instruct your bank, broker, trustee or other nominee how to vote with respect to the First Citizens adjournment proposal, you will not be deemed to have cast a vote with respect to the First Citizens adjournment proposal and it will have no effect on the First Citizens adjournment proposal. |
• | By telephone: by calling the toll-free number indicated on the accompanying proxy card and following the recorded instructions. |
• | Through the Internet: by visiting the website indicated on the accompanying proxy card and following the instructions. |
• | By mail: by completing and returning the accompanying proxy card in the enclosed postage-paid envelope. The envelope requires no additional postage if mailed in the United States. |
• | submitting a written notice of revocation to First Citizens’ corporate secretary; |
• | granting a subsequently dated proxy; |
• | voting by telephone or the Internet at a later time, before 11:59 p.m. on the day before the First Citizens special meeting; or |
• | attending virtually and voting at the First Citizens special meeting. |
• | the CIT merger proposal; |
• | the CIT compensation proposal; and |
• | the CIT adjournment proposal. |
• | Vote required: Approval of the CIT merger proposal requires the affirmative vote of the holders of at least a majority of the outstanding shares of CIT common stock entitled to vote on the merger agreement. |
• | Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the CIT special meeting or fail to instruct your bank, broker, trustee or other nominee how to vote with respect to the CIT merger proposal, it will have the same effect as a vote “AGAINST” the CIT merger proposal. |
• | Vote required: Approval of the CIT compensation proposal requires the affirmative vote of the holders of a majority of the shares of CIT common stock entitled to vote who are present or represented by proxy at the CIT special meeting. |
• | Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy card, fail to submit a proxy card or vote in person at the CIT special meeting, or fail to instruct your bank or broker how to vote with respect to the CIT compensation proposal, you will not be deemed to have cast a vote with respect to the proposal and it will have no effect on the proposal. |
• | Vote required: Approval of the CIT adjournment proposal requires the affirmative vote of the holders of a majority of the shares of CIT common stock entitled to vote who are present or represented by proxy at the CIT special meeting |
• | Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy card, fail to submit a proxy card or vote in person at the CIT special meeting, or fail to instruct your bank or broker how to vote with respect to the CIT adjournment proposal, you will not be deemed to have cast a vote with respect to the proposal and it will have no effect on the proposal. |
• | By telephone: by calling the toll-free number indicated on the accompanying proxy card and following the recorded instructions. |
• | Through the Internet: by visiting the website indicated on the accompanying proxy card and following the instructions. |
• | By mail: by completing and returning the accompanying proxy card in the enclosed postage-paid envelope. The envelope requires no additional postage if mailed in the United States. |
• | submitting a written notice of revocation to CIT’s corporate secretary; |
• | granting a subsequently dated proxy; |
• | voting by telephone or the Internet at a later time, before 11:59 p.m. on the day before the CIT special meeting; or |
• | attending in person and voting at the CIT special meeting. |
• | First Citizens proposed an exchange ratio of 0.049, subject to potential upward adjustment of 5% to 10% based on the 10-day volume-weighted average price of CIT prior to execution of the transaction agreement, which would result in CIT stockholders owning approximately 34% of the combined company’s common equity (taking into account the upward adjustment based on the then-current market prices). |
• | Company A proposed that shares of CIT common stock would be exchanged for shares of Company A common stock based on a fixed exchange ratio that would result in CIT stockholders owning 32% to 34% of the combined company’s common equity. |
• | Company B proposed a fixed exchange ratio that would result in CIT stockholders owning approximately 40% of the combined company’s common equity. |
• | First Citizens proposed an exchange ratio of 0.05, subject to potential upward adjustment of 5% to 10% based on the 10-day volume-weighted average price of CIT prior to signing of a definitive merger agreement, which would result in CIT stockholders owning approximately 36.6% of the combined company’s common equity and an implied exchange ratio of 0.055 (taking into account the upward adjustment based on the then-current market prices). |
• | Company B proposed the same exchange ratio as set forth in its non-binding letter of intent to CIT on August 13, 2020. |
• | management presented its recommendation regarding the proposed transaction; |
• | representatives of Piper Sandler reviewed its financial analyses of the proposed transaction, which is summarized under “—Opinion of First Citizens’ Financial Advisor” and rendered to the First Citizens Board its oral opinion, subsequently confirmed by delivery of a written opinion attached to this joint proxy statement/prospectus as Annex C, to the effect that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations on the review undertaken in preparing its opinion, the exchange ratio pursuant to the merger agreement was fair from a financial point of view to First Citizens. See “—Opinion of First Citizens’ Financial Advisor” beginning on page 79; and |
• | representatives of Smith Anderson reviewed with the directors their duties in the context of a merger transaction, discussed the terms of the merger agreement and described the resolutions the First Citizens directors would be asked to adopt if they were to approve the mergers. |
• | each of First Citizens’, CIT’s and the combined company’s business, operations, financial condition, stock performance, asset quality, earnings and prospects, and legal and regulatory compliance. In reviewing these factors, the First Citizens board of directors considered its view that CIT’s business and operations complement those of First Citizens and that the mergers would result in a combined company with a larger market presence, more diversified revenue sources, a well-balanced loan portfolio and an attractive funding base; |
• | its understanding of the current and prospective environment in which First Citizens and CIT operate, including national and local economic conditions, the interest rate environment, increasing operating costs resulting from regulatory initiatives and compliance mandates, increasing competition from both banks and non-bank financial and financial technology firms, current financial market conditions and the likely effects of these factors on First Citizens, both with and without the proposed mergers; |
• | the strategic rationale for the mergers, including the potential to increase First Citizens’ national footprint, particularly in the western United States; |
• | the governance structure for the combined company, including the composition of the board of directors and management; |
• | the anticipated pro forma financial impact of the mergers on the combined company, including earnings, dividends, return on equity, tangible book value accretion, liquidity and regulatory capital levels; |
• | its review and discussion with First Citizens’ management concerning the due diligence investigation of CIT; |
• | the potential cost savings and funding synergies that could be achieved as a result of operational efficiencies of the combined company; |
• | the ability to leverage the combined company’s investments in innovation and technology to improve customer offerings and service; |
• | CIT’s successful track record and the First Citizens board of directors’ belief that the combined enterprise would benefit from CIT’s ability to take advantage of economies of scale and grow in the current economic environment, making CIT an attractive partner for First Citizens; |
• | the opinion, dated October 15, 2020, of Piper Sandler & Co., to the First Citizens board of directors as to the fairness, from a financial point of view and as of the date of the opinion, to First Citizens of the exchange ratio in the proposed merger, as more fully described below under “—Opinion of First Citizens’ Financial Advisor” beginning on page 79; |
• | the fact that First Citizens’ stockholders will have a chance to vote on the stock issuance in connection with the mergers; |
• | the terms of the mergers and the fact that the exchange ratio is fixed, with no adjustment in the merger consideration to be received by CIT stockholders as a result of possible increases or decreases in the trading price of CIT common stock or First Citizens common stock following the announcement of the mergers, which the First Citizens board of directors believed was consistent with market practice for mergers of this type and with the strategic nature of the mergers, as more fully described above under “—Terms of the Mergers” beginning on page 67; |
• | the fact that the merger consideration will consist of shares of First Citizens Class A common stock, First Citizens series B preferred stock and First Citizens series C preferred stock, which will allow CIT stockholders to participate in a significant portion of the future performance of the combined business and synergies resulting from the mergers, and the value to CIT stockholders represented by that consideration; and |
• | the regulatory and other approvals required pursuant to the merger agreement and the expectation that such regulatory approvals will be received in a timely manner and without the imposition of unacceptable conditions. |
• | the requirement that First Citizens conduct its business in the ordinary course and the other restrictions on the conduct of First Citizens’ business prior to the completion of the mergers, which may delay or prevent First Citizens from undertaking business opportunities that may arise pending completion of the mergers; |
• | the potential risk of diverting management attention and resources from the operation of First Citizens’ business and towards the completion of the mergers; |
• | the dilution to current First Citizens stockholders from the issuance of additional shares of First Citizens Class A common stock in the first step merger; |
• | the possible disruption to First Citizens’ and CIT’s business that may result from the announcement of the mergers; |
• | the potential risks associated with achieving anticipated cost synergies and savings in the amounts estimated or in the time frame contemplated; |
• | the potential risks associated with successfully integrating CIT’s business, operations and workforce with those of First Citizens; |
• | the risk of losing key First Citizens or CIT employees during the pendency of the mergers and thereafter; |
• | the possibility that the mergers may not be completed or may be unduly delayed because conditions to closing may not be satisfied or CIT may exercise its rights allowing termination; |
• | the substantial costs to be incurred in connection with the mergers, including the costs of integrating the businesses of First Citizens and CIT and the transaction expenses arising from the mergers; |
• | the mergers’ effect on the combined company’s regulatory capital levels; |
• | the potential for legal claims challenging the mergers; and |
• | the other risks described under the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.” |
• | a draft of the merger agreement, dated October 15, 2020; |
• | a draft of the Employment Letter Agreement to be entered into between Ms. Ellen R. Alemany and First Citizens Bank in connection with the mergers; |
• | certain publicly available financial statements and other historical financial information of First Citizens that Piper Sandler deemed relevant; |
• | certain publicly available financial statements and other historical financial information of CIT that Piper Sandler deemed relevant; |
• | certain internal financial projections for First Citizens for the years ending December 31, 2020, December 31, 2021 and December 31, 2022 with estimated long-term annual assets and net income to common stock growth rates for the years ending December 31, 2023, December 31, 2024 and December 31, 2025, as provided by the senior management of First Citizens, as well as an estimated dividend payout ratio for First Citizens for the years ending December 31, 2023, December 31, 2024 and December 31, 2025, as provided by the senior management of First Citizens; |
• | publicly available mean analyst earnings per share and dividends per share estimates for CIT for the quarter ending December 31, 2020 and for the years ending December 31, 2021 and December 31, 2022 with an estimated annual long-term earnings per share growth rate for the years ending |
• | the estimated financial impact of the mergers on First Citizens based on certain assumptions relating to transaction expenses, purchase accounting adjustments and cost savings, as well as the establishment of certain reserves for current expected credit losses (CECL) accounting standards, as provided by the senior management of First Citizens; |
• | the publicly reported historical price and trading activity for First Citizens class A common stock and CIT common stock, including a comparison of certain stock trading information for First Citizens class A common stock and CIT common stock and certain stock indices, as well as similar publicly available information for certain other companies, the securities of which are publicly traded; |
• | a comparison of certain financial information for First Citizens and CIT with similar financial institutions for which information was publicly available; |
• | the financial terms of certain recent business combinations in the bank and thrift industry (on a nationwide basis), to the extent publicly available; |
• | the current market environment generally and the banking environment in particular; and |
• | such other information, financial studies, analyses and investigations and financial, economic and market criteria as Piper Sandler considered relevant. |
Transaction Price / Tangible Book Value per Share | | | 43.3% |
Transaction Price / LTM Earnings per Share | | | N/M(1) |
Transaction Price / 2021E Mean Consensus Earnings per Share(2) | | | 9.4x |
Transaction Price / 2022E Mean Consensus Earnings per Share(3) | | | 5.1x |
Tangible Book Premium / Core Deposits (Excluding CDs > $100K)(4) | | | (7.2%) |
Tangible Book Premium / Core Deposits (Excluding CDs > $250K)(5) | | | (6.4%) |
Premium to CIT Market Price as of October 13, 2020 | | | 12.3% |
(1) | N/M represents a negative value |
(2) | 2021E Mean Consensus Earnings per Share as provided by FactSet |
(3) | 2022E Mean Consensus Earnings per Share as provided by FactSet |
(4) | Core deposits equal to total deposits less CDs greater than $100K |
(5) | Core deposits equal to total deposits less CDs greater than $250K |
| | Beginning Value October 13, 2019 | | | Ending Value October 13, 2020 | |
First Citizens | | | 100% | | | 73.5% |
CIT | | | 100% | | | 43.9% |
Asset Peer Group | | | 100% | | | 79.3% |
NASDAQ Bank Index | | | 100% | | | 76.1% |
S&P 500 Index | | | 100% | | | 118.2% |
| | Beginning Value October 13, 2017 | | | Ending Value October 13, 2020 | |
First Citizens | | | 100% | | | 91.0% |
CIT | | | 100% | | | 39.2% |
Asset Peer Group | | | 100% | | | 73.9% |
NASDAQ Bank Index | | | 100% | | | 69.7% |
S&P 500 Index | | | 100% | | | 137.6% |
Associated Banc-Corp | | | Pinnacle Financial Partners, Inc. |
BankUnited, Inc. | | | Prosperity Bancshares, Inc. |
BOK Financial Corporation | | | Regions Financial Corporation |
Comerica Incorporated | | | Signature Bank |
Commerce Bancshares, Inc. | | | South State Corporation |
Cullen/Frost Bankers, Inc. | | | Sterling Bancorp |
East West Bancorp, Inc. | | | SVB Financial Group |
F.N.B. Corporation | | | Synovus Financial Corp. |
First Horizon National Corporation | | | TCF Financial Corporation |
First Republic Bank | | | Texas Capital Bancshares, Inc. |
Hancock Whitney Corporation | | | Valley National Bancorp |
Huntington Bancshares Incorporated | | | Webster Financial Corporation |
M&T Bank Corporation | | | Western Alliance Bancorporation |
New York Community Bancorp, Inc. | | | Wintrust Financial Corporation |
People's United Financial, Inc. | | | Zions Bancorporation, National Association |
| | First Citizens | | | CIT | | | Asset Peer Group Median | | | Asset Peer Group Mean | | | Asset Peer Group Low | | | Asset Peer Group High | |
Total assets ($B) | | | 47.9 | | | 61.7 | | | 44.7 | | | 57.8 | | | 30.5 | | | 144.1 |
Loans / Deposits (%) | | | 78.2 | | | 81.9 | | | 87.4 | | | 86.2 | | | 49.3 | | | 133.3 |
LLR / Gross loans (%) | | | 0.68 | | | 3.20 | | | 1.46 | | | 1.42 | | | 0.41 | | | 2.48 |
CET1 Ratio (%) | | | 10.3 | | | 10.0 | | | 10.1 | | | 10.4 | | | 8.8 | | | 13.3 |
Tier 1 Ratio (%) | | | 11.4 | | | 11.0 | | | 10.9 | | | 11.2 | | | 9.8 | | | 14.0 |
Total RBC Ratio (%) | | | 13.6 | | | 13.2 | | | 13.2 | | | 13.2 | | | 11.6 | | | 15.2 |
CRE / Total RBC Ratio (%) | | | 123 | | | 131 | | | 204 | | | 215 | | | 2 | | | 750 |
MRQ Cost of Deposits (%) | | | 0.18 | | | 1.23 | | | 0.32 | | | 0.36 | | | 0.03 | | | 1.04 |
MRQ Net interest margin (%) | | | 3.14 | | | 2.14(1) | | | 2.97 | | | 2.97 | | | 2.18 | | | 4.19 |
LTM Return on average assets (%) | | | 1.08 | | | (0.81) | | | 0.84 | | | 0.85 | | | (0.22) | | | 1.56 |
LTM Return on average equity (%) | | | 11.81 | | | (7.15) | | | 7.49 | | | 7.55 | | | (1.97) | | | 14.43 |
LTM Efficiency ratio (%) | | | 64.9 | | | 69.8 | | | 56.2 | | | 54.4 | | | 39.2 | | | 66.4 |
Price/Tangible book value (%) | | | 106 | | | 39 | | | 105 | | | 117 | | | 72 | | | 231 |
Price/LTM Earnings per share (x) | | | 8.5 | | | NM | | | 10.2 | | | 12.0 | | | 6.4 | | | 23.3 |
Price/2021E Earnings per share (x) | | | — | | | 8.4 | | | 10.2 | | | 11.2 | | | 7.2 | | | 21.8 |
Price/2022E Earnings per share (x) | | | — | | | 4.6 | | | 8.4 | | | 9.4 | | | 6.4 | | | 19.3 |
Current Dividend Yield (%) | | | 0.5 | | | 7.3 | | | 4.3 | | | 4.1 | | | 0.0 | | | 8.4 |
Market Cap ($B) | | | 3.4 | | | 1.9 | | | 4.0 | | | 5.4 | | | 1.8 | | | 21.3 |
(1) | CIT NIM information reflects net finance margin |
Ally Financial Inc. | | | Discover Financial Services |
Axos Financial, Inc. | | | Hope Bancorp, Inc. |
Bank OZK | | | Investors Bancorp, Inc. |
BankUnited, Inc. | | | New York Community Bancorp, Inc. |
Berkshire Hills Bancorp, Inc. | | | Synchrony Financial |
Cathay General Bancorp | | | Washington Federal, Inc. |
Customers Bancorp, Inc. | | |
| | CIT | | | Funding Peer Group Median | | | Funding Peer Group Mean | | | Funding Peer Group Low | | | Funding Peer Group High | |
Total assets ($B) | | | 61.7 | | | 26.4 | | | 49.0 | | | 13.1 | | | 184.1 |
Loans / Deposits (%) | | | 81.9 | | | 95.8 | | | 104.4 | | | 87.0 | | | 135.2 |
LLR / Gross loans (%) | | | 3.20 | | | 1.28 | | | 2.75 | | | 0.41 | | | 12.52 |
CET1 Ratio (%) | | | 10.0 | | | 11.8 | | | 11.8 | | | 7.8 | | | 15.3 |
Tier 1 Ratio (%) | | | 11.0 | | | 12.7 | | | 12.4 | | | 9.7 | | | 16.3 |
Total RBC Ratio (%) | | | 13.2 | | | 14.3 | | | 14.2 | | | 11.9 | | | 17.6 |
CRE / Total RBC Ratio (%) | | | 131 | | | 257 | | | 260 | | | 0 | | | 750 |
MRQ Cost of Funds (%) | | | 1.53 | | | 0.98 | | | 1.24 | | | 0.82 | | | 2.15 |
MRQ NIM (%) | | | 2.14(1) | | | 2.79 | | | 4.20 | | | 2.18 | | | 13.53 |
LTM Return on average assets (%) | | | (0.81) | | | 0.88 | | | 0.63 | | | (3.93) | | | 2.06 |
LTM Return on average equity (%) | | | (7.15) | | | 7.29 | | | 5.89 | | | (30.09) | | | 15.61 |
LTM Efficiency ratio (%) | | | 69.8 | | | 51.8 | | | 50.2 | | | 30.9 | | | 64.5 |
Price/Tangible book value (%) | | | 39 | | | 83 | | | 104 | | | 49 | | | 239 |
Price/LTM Earnings per share (x) | | | NM | | | 9.7 | | | 10.5 | | | 6.0 | | | 20.3 |
Price/2021E Earnings per share (x) | | | 8.4 | | | 8.9 | | | 9.5 | | | 4.2 | | | 14.8 |
Price/2022E Earnings per share (x) | | | 4.6 | | | 7.4 | | | 7.7 | | | 4.1 | | | 12.4 |
Current Dividend Yield (%) | | | 7.3 | | | 3.8 | | | 4.1 | | | 0.0 | | | 8.4 |
Market Cap ($B) | | | 1.9 | | | 1.9 | | | 5.0 | | | 0.4 | | | 19.7 |
(1) | CIT NIM information reflects net finance margin |
Acquiror | | | Target |
Capital One Financial Corporation | | | North Fork Bancorporation, Inc. |
Wachovia Corporation | | | Golden West Financial Corporation |
Regions Financial Corporation | | | AmSouth Bancorporation |
Toronto-Dominion Bank | | | TD Banknorth Inc. |
Bank of New York Company, Inc. | | | Mellon Financial Corporation |
Banco Bilbao Vizcaya Argentaria, S.A. | | | Compass Bancshares, Inc. |
Bank of America Corporation | | | ABN AMRO Holding N.V. |
Toronto-Dominion Bank | | | Commerce Bancorp, Inc. |
Bank of America Corporation | | | Countrywide Financial Corporation |
Mitsubishi UFJ Financial Group, Inc. | | | UnionBanCal Corporation |
Wells Fargo & Company | | | Wachovia Corporation |
Banco Santander, S.A. | | | Sovereign Bancorp, Inc. |
PNC Financial Services Group, Inc. | | | National City Corporation |
Bank of Montreal | | | Marshall & Ilsley Corporation |
Capital One Financial Corporation | | | ING Groep N.V. |
PNC Financial Services Group, Inc. | | | Royal Bank of Canada |
M&T Bank Corporation | | | Hudson City Bancorp, Inc. |
Acquiror | | | Target |
Royal Bank of Canada | | | City National Corporation |
KeyCorp | | | First Niagara Financial Group, Inc. |
Huntington Bancshares Incorporated | | | FirstMerit Corporation |
TIAA Board of Overseers | | | EverBank Financial Corp |
BB&T Corporation | | | SunTrust Banks, Inc. |
First Horizon National Corporation | | | IBERIABANK Corporation |
| | | | Nationwide Precedent Transactions | |||||||||||
| | First Citizens/ CIT | | | Median | | | Mean | | | Low | | | High | |
Transaction Price / LTM Earnings Per Share (x) | | | NM | | | 15.4 | | | 15.2 | | | 7.0 | | | 22.1 |
Transaction Price / Fwd Earnings Per Share (x) | | | 9.4 | | | 15.1 | | | 15.6 | | | 4.6 | | | 26.1 |
Transaction Price / Tangible Book Value Per Share (%) | | | 43 | | | 166 | | | 198 | | | 32 | | | 490 |
Tangible Book Value Premium to Core Deposits (%) | | | (7.2) | | | 8.2 | | | 13.3 | | | (9.1) | | | 42.6 |
1-Day Market Premium (%) | | | 12.3 | | | 8.3 | | | 12.6 | | | (18.9) | | | 79.0 |
Discount Rate | | | 8.0x | | | 9.0x | | | 10.0x | | | 11.0x | | | 12.0x | | | 13.0x |
8.0% | | | $352.44 | | | $395.46 | | | $438.49 | | | $481.51 | | | $524.53 | | | $567.56 |
9.0% | | | 339.02 | | | 380.39 | | | 421.76 | | | 463.13 | | | 504.50 | | | 545.87 |
10.0% | | | 326.22 | | | 366.02 | | | 405.81 | | | 445.61 | | | 485.40 | | | 525.20 |
11.0% | | | 314.02 | | | 352.32 | | | 390.61 | | | 428.91 | | | 467.20 | | | 505.49 |
12.0% | | | 302.39 | | | 339.25 | | | 376.11 | | | 412.97 | | | 449.83 | | | 486.69 |
13.0% | | | 291.28 | | | 326.77 | | | 362.27 | | | 397.76 | | | 433.26 | | | 468.75 |
Discount Rate | | | 80% | | | 90% | | | 100% | | | 110% | | | 120% | | | 130% |
8.0% | | | $320.07 | | | $359.05 | | | $398.02 | | | $437.00 | | | $475.98 | | | $514.95 |
9.0% | | | 307.89 | | | 345.37 | | | 382.85 | | | 420.33 | | | 457.81 | | | 495.29 |
10.0% | | | 296.28 | | | 332.33 | | | 368.39 | | | 404.44 | | | 440.49 | | | 476.54 |
11.0% | | | 285.21 | | | 319.90 | | | 354.59 | | | 389.29 | | | 423.98 | | | 458.67 |
12.0% | | | 274.65 | | | 308.04 | | | 341.44 | | | 374.83 | | | 408.23 | | | 441.62 |
13.0% | | | 264.57 | | | 296.73 | | | 328.89 | | | 361.04 | | | 393.20 | | | 425.36 |
Annual Estimate Variance | | | 8.0x | | | 9.0x | | | 10.0x | | | 11.0x | | | 12.0x | | | 13.0x |
(10.0%) | | | $291.71 | | | $327.20 | | | $362.69 | | | $398.18 | | | $433.66 | | | $469.15 |
(5.0%) | | | 307.49 | | | 344.95 | | | 382.40 | | | 419.86 | | | 457.32 | | | 494.78 |
0.0% | | | 323.26 | | | 362.69 | | | 402.12 | | | 441.55 | | | 480.98 | | | 520.41 |
5.0% | | | 339.03 | | | 380.43 | | | 421.83 | | | 463.24 | | | 504.64 | | | 546.04 |
10.0% | | | 354.80 | | | 398.18 | | | 441.55 | | | 484.92 | | | 528.30 | | | 571.67 |
Discount Rate | | | 6.0x | | | 7.0x | | | 8.0x | | | 9.0x | | | 10.0x | | | 11.0x |
12.0% | | | $25.67 | | | $29.15 | | | $32.63 | | | $36.10 | | | $39.58 | | | $43.06 |
13.0% | | | 24.80 | | | 28.14 | | | 31.49 | | | 34.84 | | | 38.19 | | | 41.54 |
14.0% | | | 23.96 | | | 27.18 | | | 30.41 | | | 33.63 | | | 36.86 | | | 40.08 |
15.0% | | | 23.16 | | | 26.26 | | | 29.37 | | | 32.48 | | | 35.59 | | | 38.69 |
16.0% | | | 22.39 | | | 25.38 | | | 28.38 | | | 31.37 | | | 34.37 | | | 37.36 |
17.0% | | | 21.65 | | | 24.54 | | | 27.43 | | | 30.32 | | | 33.21 | | | 36.09 |
Discount Rate | | | 40% | | | 60% | | | 80% | | | 90% | | | 100% | | | 110% |
12.0% | | | $19.96 | | | $27.54 | | | $35.12 | | | $38.90 | | | $42.69 | | | $46.48 |
13.0% | | | 19.30 | | | 26.59 | | | 33.89 | | | 37.54 | | | 41.18 | | | 44.83 |
14.0% | | | 18.66 | | | 25.69 | | | 32.72 | | | 36.23 | | | 39.74 | | | 43.26 |
15.0% | | | 18.05 | | | 24.82 | | | 31.59 | | | 34.98 | | | 38.37 | | | 41.75 |
16.0% | | | 17.47 | | | 24.00 | | | 30.52 | | | 33.79 | | | 37.05 | | | 40.31 |
17.0% | | | 16.91 | | | 23.20 | | | 29.50 | | | 32.64 | | | 35.79 | | | 38.94 |
Annual Estimate Variance | | | 6.0x | | | 7.0x | | | 8.0x | | | 9.0x | | | 10.0x | | | 11.0x |
(10.0%) | | | $20.07 | | | $22.69 | | | $25.31 | | | $27.93 | | | $30.55 | | | $33.17 |
(5.0%) | | | 20.94 | | | 23.71 | | | 26.47 | | | 29.24 | | | 32.00 | | | 34.77 |
0.0% | | | 21.81 | | | 24.72 | | | 27.64 | | | 30.55 | | | 33.46 | | | 36.37 |
5.0% | | | 22.69 | | | 25.74 | | | 28.80 | | | 31.86 | | | 34.91 | | | 37.97 |
10.0% | | | 23.56 | | | 26.74 | | | 29.97 | | | 33.17 | | | 36.47 | | | 39.57 |
• | each of CIT’s and First Citizens’ business, operations, financial condition, stock performance, asset quality, earnings and prospects, including the impact of the COVID-19 pandemic and the interest rate environment; increased operating costs resulting from regulatory and compliance mandates; increasing competition from both banks and non-bank financial and financial technology firms; current financial market conditions; and the likely effects of the foregoing factors on CIT’s and the combined company’s potential growth, development, productivity and strategic options. In reviewing these factors, including the information obtained through due diligence, the CIT board of directors considered that First Citizens’ and CIT’s respective business, operations and risk profile complement each other and that the companies’ separate earnings and prospects, and the synergies and scale potentially available in the proposed transaction, create the opportunity for the combined company to leverage complementary and diversified revenue streams and to have superior future earnings and prospects compared to CIT’s earnings and prospects on a stand-alone basis; |
• | the evaluation of the anticipated value of the combined company following the closing of the mergers and the long-term value of the combined company (including based on a dividend discount analysis and a review longer-term comparative price performances), in each case, as compared with the value of CIT on a stand-alone basis and the value of First Citizens in relation to other potential strategic options; |
• | the extensive review conducted by CIT and its advisors of the potential strategic options available to CIT; |
• | the ability to leverage the scale and financial capabilities of the combined company to make additional investments in innovation and technology to improve customer offerings and service; |
• | the combined company’s position as the 19th largest bank in the United States based on total consolidated assets; |
• | the opportunity presented by the combination of First Citizens’ strong, low-cost deposit franchise with CIT’s leading national commercial lending platform; |
• | the soundness of First Citizens’ asset quality, particularly in view of the asset quality risk exacerbated by the COVID-19 pandemic; |
• | the expectation that the combination will create a full service, diversified consumer and commercial bank operating in high growth markets throughout the Southeast, Western and Eastern U.S.; |
• | the compatibility of First Citizens’ and CIT’s cultures and credit philosophies; |
• | the governance structure for the combined company, including the fact that the board of directors of the combined company would be composed of three (3) CIT directors; |
• | First Citizens’ and CIT’s past records of integrating acquisitions and of realizing expected financial and other benefits of such acquisitions; |
• | the anticipated pro forma financial impact of the mergers on the combined company, including earnings, return on equity, tangible book value accretion, asset quality, liquidity and regulatory capital levels; |
• | the complementary nature of CIT’s and First Citizens’ businesses and prospects given the markets they serve and products they offer, and the expectation that the transaction would provide economies of scale, enhanced ability to invest in technology and innovation, expanded product offerings, cost savings opportunities, reduced funding costs, access to low-cost deposits and enhanced opportunities for growth; |
• | CIT’s and First Citizens’ shared belief in a purpose-driven and thoughtful approach to the combination and the combined company, structured to maximize the potential for synergies and positive impact to local communities and minimize the loss of customers and employees and to further diversify the combined company’s operating risk profile compared to the risk profile of either company on a stand-alone basis; |
• | the review and discussions with CIT’s senior management and advisors concerning the due diligence review of the operations, financial condition and regulatory compliance programs and prospects of First Citizens and other strategic options; |
• | the expectation that the required regulatory approvals could be obtained in a timely fashion; |
• | the expectation that the transaction will be generally tax-free for United States federal income tax purposes to CIT’s stockholders; |
• | the fact that the exchange ratio would be fixed, which the CIT board of directors believed was consistent with market practice for transactions of this type and with the strategic purpose of the transaction, and the fact that CIT stockholders would own approximately 39% of the combined company; |
• | the opinion, dated October 15, 2020, of KBW to the CIT board of directors as to the fairness, from a financial point of view and as of such date, of the exchange ratio pursuant to the merger agreement to the holders of CIT common stock, which opinion was based on and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW, as further described under the heading “—Opinions of CIT’s Financial Advisors—Opinion of Keefe, Bruyette & Woods, Inc.” beginning on page 92; |
• | the opinion, dated October 15, 2020, of Morgan Stanley to the CIT board of directors, that, as of such date, and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth therein, the exchange ratio pursuant to the merger agreement was fair, from a financial point of view, to holders of shares of CIT common stock (other than holders of excluded shares), as further described under the heading “—Opinions of CIT’s Financial Advisors—Opinion of Morgan Stanley & Co. LLC” beginning on page 107; |
• | the review with CIT’s legal advisors of the terms of the merger agreement, including the representations, covenants, termination and related provisions; |
• | the fact that the adoption of the merger agreement and the transactions contemplated thereby will be subject to the approval of CIT stockholders; |
• | the fact that holders of approximately 29.43% of the voting power of First Citizens common stock have entered into a voting agreement with CIT to, among other things, vote their shares in favor of the approval of the issuance of the shares of First Citizens capital stock pursuant to the merger agreement; and |
• | the view of the CIT board of directors of the capability and likelihood for other potential counterparties to emerge and that, although the merger agreement contains a covenant prohibiting CIT from soliciting third-party acquisition proposals, it permits the CIT board of directors to consider and respond to unsolicited proposals, subject to certain requirements, as more fully described under “The Merger Agreement—Covenants and Agreements” beginning on page 136; |
• | the right of the CIT board of directors under the merger agreement to withdraw its recommendation to the CIT stockholders that they adopt the merger agreement in certain circumstances, as more fully described under “The Merger Agreement—Covenants and Agreements” beginning on page 136; and |
• | the CIT board of directors’ determination, based on discussions with its financial and legal advisors, that the payment by CIT in certain circumstances of a $64,000,000 termination fee is: (i) reasonable and customary in size in transactions similar to the mergers; and (ii) would not be likely to preclude a willing and financially capable third party, were one to exist, from making a superior proposal for CIT following the announcement of the transaction. |
• | the diversion of management focus and resources from other strategic opportunities and operational matters while working to implement the transaction and integrate the two companies; |
• | the possibility of encountering difficulties in achieving cost savings and synergies in the amounts currently estimated or within the time frame currently contemplated; |
• | the dual-class voting stock structure of First Citizens, with the result that CIT shareholders would own a substantially lesser share of the voting power of the combined company than the economic equity; |
• | the voting equity ownership of First Citizens Class B shares by the Holding family; |
• | the possibility of encountering difficulties in successfully integrating the businesses, operations and workforces of CIT and First Citizens; |
• | certain anticipated merger-related costs; |
• | the regulatory and other approvals required in connection with the transaction and the risk that such regulatory approvals will not be received or will not be received in a timely manner or may impose burdensome or unacceptable conditions; |
• | the potential for legal claims challenging the mergers; and |
• | the other risks described under the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements”. |
• | a draft of the merger agreement dated October 15, 2020 (the most recent draft made available to KBW); |
• | the audited financial statements and the Annual Reports on Form 10-K for the three fiscal years ended December 31, 2019 of CIT; |
• | the unaudited quarterly financial statements and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 of CIT and the preliminary unaudited quarterly financial statements for the quarter ended September 30, 2020 of CIT; |
• | the audited financial statements and Annual Reports on Form 10-K for the three fiscal years ended December 31, 2019 of First Citizens; |
• | the unaudited quarterly financial statements and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 of First Citizens and the preliminary unaudited quarterly financial statements for the quarter ended September 30, 2020 of First Citizens; |
• | certain regulatory filings of CIT and First Citizens and their respective subsidiaries, including the quarterly reports on Form FR Y-9C and call reports filed with respect to each quarter during the three-year period ended December 31, 2019 as well as the quarters ended March 31, 2020 and June 30, 2020; |
• | certain other interim reports and other communications of CIT and First Citizens to their respective stockholders; and |
• | other financial information concerning the businesses and operations of CIT and First Citizens that was furnished to KBW by CIT and First Citizens or which KBW was otherwise directed to use for purposes of KBW’s analyses. |
• | the historical and current financial position and results of operations of CIT and First Citizens; |
• | the assets and liabilities of CIT and First Citizens; |
• | a comparison of certain financial and stock market information for CIT and First Citizens with similar information for certain other companies the securities of which were publicly traded; |
• | financial and operating forecasts and projections of CIT that were prepared by CIT management, provided to and discussed with KBW by CIT management, which forecasts were adjusted based on CIT’s guidance and used and relied upon by KBW at the direction of such management and with the consent of the CIT board of directors; |
• | certain financial projections with respect to CIT that were primarily derived from a consensus of selected Wall Street equity research financial forecasts identified by the management of CIT, which forecasts were extrapolated for certain fiscal years based on CIT’s guidance that were provided to and discussed with KBW by CIT management, and used and relied upon by KBW at the direction of such management and with the consent of the CIT board of directors (such forecasts and extrapolations thereof, the “CIT Street Forecasts”); |
• | financial and operating forecasts and projections of First Citizens that were prepared by First Citizens management, provided to and discussed with KBW by First Citizens management, and used and relied upon by KBW based on such discussions, at the direction of CIT management and with the consent of the CIT board of directors; |
• | estimates regarding certain pro forma financial effects of the first step merger on First Citizens (including, without limitation, the cost savings and related expenses expected to result or be derived from the first step merger) that were prepared by First Citizens management, provided to and discussed with KBW by First Citizens management, and used and relied upon by KBW based on such discussions, at the direction of CIT management and with the consent of the CIT board of directors; and |
• | certain third party economic forecasts and loan review reports. |
• | that the first step merger and any related transactions (including, without limitation, the second step merger and the bank merger) would be completed substantially in accordance with the terms set forth in the merger agreement (the final terms of which KBW assumed would not differ in any respect material to KBW’s analyses from the draft reviewed by KBW and referred to above) with no adjustments to the exchange ratio and with no other consideration or payments in respect of CIT common stock; |
• | that the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement were true and correct; |
• | that each party to the merger agreement and all related documents would perform all of the covenants and agreements required to be performed by such party under such documents; |
• | that there were no factors that would delay or subject to any adverse conditions, any necessary regulatory or governmental approval for the first step merger or any related transactions and that all conditions to the completion of the first step merger and any related transaction would be satisfied without any waivers or modifications to the merger agreement or any of the related documents; and |
• | that in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the first step merger and any related transaction, no restrictions, including any divestiture requirements, termination or other payments or amendments or modifications, would be imposed that would have a material adverse effect on the future results of operations or financial condition of CIT, First Citizens or the pro forma entity, or the contemplated benefits of the first step merger, including without limitation the cost savings and related expenses expected to result or be derived from the first step merger. |
• | the underlying business decision of CIT to engage in the first step merger or enter into the merger agreement; |
• | the relative merits of the first step merger as compared to any strategic alternatives that are, have been or may be available to or contemplated by CIT or the CIT board of directors; |
• | the fairness of the amount or nature of any compensation to any of CIT’s officers, directors or employees, or any class of such persons, relative to the compensation to the holders of CIT common stock; |
• | the effect of the first step merger or any related transaction on, or the fairness of the consideration to be received by, holders of any class of securities of CIT (other than the holders of CIT common stock, solely with respect to the exchange ratio, as described in KBW’s opinion and not relative to the consideration to be received by holders of any other class of securities) or holders of any class of securities of First Citizens or any other party to any transaction contemplated by the merger agreement; |
• | the actual value of First Citizens Class A common stock to be issued in the first step merger; |
• | the prices, trading range or volume at which CIT common stock or First Citizens Class A common stock would trade following the public announcement of the first step merger or the prices, trading range or volume at which First Citizens Class A common stock would trade following the consummation of the first step merger; |
• | any advice or opinions provided by any other advisor to any of the parties to the first step merger or any other transaction contemplated by the merger agreement; or |
• | any legal, regulatory, accounting, tax or similar matters relating to CIT, First Citizens, their respective stockholders, or relating to or arising out of or as a consequence of the first step merger or any related transaction (including the second step merger and the bank merger), including whether or not the first step merger would qualify as a tax-free reorganization for United States federal income tax purposes. |
Price / September 30, 2020 Tangible Book Value per Share | | | 0.43x |
| | Based on “Street” Estimates | | | Based on Adjusted Internal Estimates(1) | | | Based on Internal Estimates | |
Price / 2021 Earnings per Share | | | 9.3x | | | 6.9x | | | 4.3x |
Price / 2022 Earnings per Share | | | 5.1x | | | 5.1x | | | 4.0x |
(1) | Adjusted to reflect a normalized loan loss provision of $45 million per quarter as directed by CIT management. |
Fifth Third Bancorp |
Citizens Financial Group, Inc. |
KeyCorp |
Regions Financial Corporation |
M&T Bank Corporation |
Huntington Bancshares Incorporated |
Comerica Incorporated |
Zions Bancorporation, NA |
Popular, Inc. |
People’s United Financial, Inc. |
Signature Bank |
New York Community Bancorp, Inc. |
Synovus Financial Corp. |
TCF Financial Corporation |
| | | | Selected Companies | |||||||||||
| | CIT | | | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
LTM Core Return on Assets (%)(1) | | | (0.12) | | | 0.75 | | | 0.83 | | | 0.86 | | | 0.97 |
LTM Core Return on Equity (%)(1) | | | (1.09) | | | 6.17 | | | 7.85 | | | 7.60 | | | 8.55 |
LTM Core Return on Average Tangible Common Equity (%)(1) | | | (1.27) | | | 9.10 | | | 10.26 | | | 10.56 | | | 11.28 |
LTM Core Pre-tax Pre-provision Return on Average Assets (%)(2) | | | 1.29 | | | 1.69 | | | 1.80 | | | 1.76 | | | 1.85 |
LTM Net Interest Margin (%) | | | 2.70(4) | | | 3.04 | | | 3.12 | | | 3.20 | | | 3.41 |
LTM Fee Income / Revenue Ratio (%) | | | 24.1(3) | | | 20.4 | | | 28.4 | | | 25.6 | | | 33.7 |
LTM Efficiency Ratio (%) | | | 61.3(4) | | | 58.0 | | | 56.5 | | | 55.2 | | | 55.7 |
(1) | Core income excluded extraordinary items, nonrecurring items (including deferred tax asset revaluations), gains/losses on sale of securities, and amortization of intangibles as calculated by S&P Global Market Intelligence. |
(2) | Income before taxes excluding provision for loan losses and extraordinary items, excluding gain on the sale of available for sale securities, amortization of intangibles, goodwill and nonrecurring items. |
(3) | Adjusted for lease payments. |
(4) | Net finance margin and net efficiency ratio were provided by CIT management. |
| | | | Selected Companies | |||||||||||
| | CIT | | | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
Tangible Common Equity / Tangible Assets (%) | | | 8.01 | | | 7.42 | | | 7.69 | | | 7.72 | | | 8.06 |
Common Equity Tier 1 Ratio (%) | | | 9.96 | | | 9.53 | | | 9.75 | | | 10.17 | | | 10.14 |
Total Capital Ratio (%) | | | 13.22 | | | 12.73 | | | 13.05 | | | 13.39 | | | 13.49 |
Loans / Deposits (%) | | | 98.9(2) | | | 78.5 | | | 85.0 | | | 85.6 | | | 90.2 |
Loan Loss Reserve / Gross Loans (%) | | | 3.20 | | | 1.32 | | | 1.63 | | | 1.69 | | | 2.04 |
Non-performing Assets / Loans + OREO (%)(1) | | | 1.63 | | | 1.25 | | | 1.02 | | | 1.47 | | | 0.88 |
Criticized Loans / Loans (%) | | | 6.5 | | | 4.1 | | | 2.3 | | | 3.4 | | | 1.6 |
LTM Net Charge-offs / Average Loans (%) | | | 0.84 | | | 0.46 | | | 0.30 | | | 0.33 | | | 0.12 |
(1) | Non-performing assets included nonaccrual loans, accruing troubled debt restructured loans, loans 90+ days past due, and other real estate owned as defined by S&P Global Market Intelligence. |
(2) | CIT loans / deposits ratio included total leases. |
| | | | Selected Companies | |||||||||||
| | CIT | | | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
1-Year Stock Price Change (%) | | | (56.6) | | | (33.7) | | | (30.4) | | | (29.4) | | | (28.0) |
YTD Stock Price Change (%) | | | (58.1) | | | (41.2) | | | (37.7) | | | (36.8) | | | (32.7) |
Stock Price / Tangible Book Value per Share (x) | | | 0.38 | | | 0.88 | | | 0.98 | | | 0.97 | | | 1.03 |
Stock Price / 2020 EPS Estimate (x)(1) | | | NM(2) | | | 9.9 | | | 13.1 | | | 13.1 | | | 14.6 |
Stock Price / 2021 EPS Estimate (x)(1) | | | 8.3 | | | 9.3 | | | 9.9 | | | 9.6 | | | 10.4 |
Stock Price / 2022 EPS Estimate (x)(1) | | | 4.5 | | | 7.6 | | | 8.0 | | | 8.0 | | | 8.4 |
Dividend Yield (%) | | | 7.3 | | | 4.5 | | | 5.3 | | | 5.3 | | | 6.2 |
LTM Dividend Payout (%) | | | NM(3) | | | 49.0 | | | 59.8 | | | 58.0 | | | 65.5 |
(1) | Calculated using consensus “street estimates”. |
(2) | NM shown for multiples greater than 30.0x or less than 0.0x. |
(3) | NM shown for dividend payout ratios greater than 100.0% or less than 0.0%. |
Capital One Financial Corporation |
Ally Financial Inc. |
Synchrony Financial |
New York Community Bancorp, Inc. |
BankUnited, Inc. |
SLM Corporation |
Investors Bancorp, Inc. |
Bank OZK |
| | | | Selected Companies | |||||||||||
| | CIT | | | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
LTM Core Return on Assets (%)(1) | | | (0.12) | | | 0.54 | | | 0.73 | | | 0.98 | | | 1.29 |
LTM Core Return on Equity (%)(1) | | | (1.09) | | | 5.44 | | | 6.81 | | | 8.69 | | | 9.66 |
LTM Core Return on Average Tangible Common Equity (%)(1) | | | (1.27) | | | 5.69 | | | 7.31 | | | 8.77 | | | 9.23 |
LTM Core Pre-tax Pre-provision Return on Average Assets (%)(2) | | | 1.29 | | | 1.27 | | | 1.88 | | | 2.92 | | | 3.67 |
LTM Net Interest Margin (%) | | | 2.70(4) | | | 2.38 | | | 3.32 | | | 5.02 | | | 5.50 |
LTM Fee Income / Revenue Ratio (%) | | | 24.1(3) | | | 7.4 | | | 12.3 | | | 11.0 | | | 17.5 |
LTM Efficiency Ratio (%) | | | 61.3(4) | | | 52.8 | | | 49.8 | | | 46.8 | | | 38.7 |
(1) | Core income excluded extraordinary items, nonrecurring items (including deferred tax asset revaluations), gains/losses on sale of securities, and amortization of intangibles as calculated by S&P Global Market Intelligence. |
(2) | Income before taxes excluding provision for loan losses and extraordinary items, excluding gain on the sale of available for sale securities, amortization of intangibles, goodwill and nonrecurring items. |
(3) | Adjusted for lease payments. |
(4) | Net finance margin and net efficiency ratio were provided by CIT management. |
| | | | Selected Companies | |||||||||||
| | CIT | | | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
Tangible Common Equity / Tangible Assets (%) | | | 8.01 | | | 7.51 | | | 8.87 | | | 9.04 | | | 9.38 |
Common Equity Tier 1 Ratio (%) | | | 9.96 | | | 11.40 | | | 12.38 | | | 12.18 | | | 12.77 |
Total Capital Ratio (%) | | | 13.22 | | | 13.77 | | | 14.14 | | | 14.80 | | | 15.55 |
Loans / Deposits (%) | | | 98.9(2) | | | 91.1 | | | 95.5 | | | 102.5 | | | 112.7 |
Loan Loss Reserve / Gross Loans (%) | | | 3.20 | | | 1.24 | | | 2.21 | | | 4.35 | | | 7.09 |
Non-performing Assets / Loans + OREO (%)(1) | | | 1.63 | | | 1.40 | | | 0.99 | | | 1.57 | | | 0.62 |
Criticized Loans / Loans (%) | | | 6.5 | | | 2.5 | | | 1.5 | | | 2.1 | | | 0.8 |
LTM Net Charge-offs / Average Loans (%) | | | 0.84 | | | 1.37 | | | 0.48 | | | 1.25 | | | 0.11 |
(1) | Non-performing assets included nonaccrual loans, accruing troubled debt restructured loans, loans 90+ days past due, and other real estate owned as defined by S&P Global Market Intelligence. |
(2) | CIT loans / deposits ratio included total leases. |
| | | | Selected Companies | |||||||||||
| | CIT | | | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
1-Year Stock Price Change (%) | | | (56.6) | | | (30.1) | | | (17.4) | | | (18.9) | | | (12.3) |
YTD Stock Price Change (%) | | | (58.1) | | | (32.1) | | | (26.2) | | | (22.9) | | | (17.9) |
Stock Price / Tangible Book Value per Share (x) | | | 0.38 | | | 0.80 | | | 0.91 | | | 1.09 | | | 1.19 |
Stock Price / 2020 EPS Estimate (x)(1) | | | NM(2) | | | 9.6 | | | 12.9 | | | 12.6 | | | 13.9 |
Stock Price / 2021 EPS Estimate (x)(1) | | | 8.3 | | | 8.5 | | | 8.8 | | | 8.5 | | | 8.9 |
Stock Price / 2022 EPS Estimate (x)(1) | | | 4.5 | | | 6.3 | | | 6.8 | | | 6.7 | | | 7.3 |
Dividend Yield (%) | | | 7.3 | | | 2.5 | | | 3.4 | | | 4.0 | | | 5.0 |
LTM Dividend Payout (%) | | | NM(3) | | | 34.0 | | | 41.1 | | | 45.0 | | | 55.7 |
(1) | Calculated using consensus “street estimates”. |
(2) | NM shown for multiples greater than 30.0x or less than 0.0x. |
(3) | NM shown for dividend payout ratios greater than 100.0% or less than 0.0%. |
Comerica Incorporated |
Zions Bancorporation, NA |
Popular, Inc. |
People’s United Financial, Inc. |
Signature Bank |
New York Community Bancorp, Inc. |
Synovus Financial Corp. |
TCF Financial Corporation |
East West Bancorp, Inc. |
First Horizon National Corporation |
BOK Financial Corporation |
Wintrust Financial Corporation |
Valley National Bancorp |
Cullen/Frost Bankers, Inc. |
South State Corporation |
F.N.B. Corporation |
Texas Capital Bancshares, Inc. |
Associated Banc-Corp |
BankUnited, Inc. |
Pinnacle Financial Partners, Inc. |
Hancock Whitney Corporation |
Prosperity Bancshares, Inc. |
Webster Financial Corporation |
Western Alliance Bancorporation |
Sterling Bancorp |
Commerce Bancshares, Inc. |
| | | | Selected Companies | |||||||||||
| | First Citizens | | | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
LTM Core Return on Assets (%)(1) | | | 1.04 | | | 0.74 | | | 0.88 | | | 0.86 | | | 1.03 |
LTM Core Return on Equity (%)(1) | | | 11.41 | | | 6.59 | | | 7.67 | | | 7.48 | | | 8.79 |
LTM Core Return on Average Tangible Common Equity (%)(1) | | | 13.08 | | | 8.92 | | | 10.57 | | | 10.38 | | | 12.36 |
LTM Core Pre-tax Pre-provision Return on Average Assets (%)(2) | | | 1.49 | | | 1.57 | | | 1.69 | | | 1.71 | | | 1.88 |
LTM Net Interest Margin (%) | | | 3.53 | | | 3.00 | | | 3.19 | | | 3.20 | | | 3.41 |
LTM Fee Income / Revenue Ratio (%) | | | 22.1 | | | 13.3 | | | 22.5 | | | 21.7 | | | 26.8 |
LTM Efficiency Ratio (%) | | | 64.9 | | | 58.8 | | | 56.8 | | | 54.1 | | | 48.7 |
(1) | Core income excluded extraordinary items, nonrecurring items (including deferred tax asset revaluations), gains/losses on sale of securities, and amortization of intangibles as calculated by S&P Global Market Intelligence. |
(2) | Income before taxes excluding provision for loan losses and extraordinary items, excluding gain on the sale of available for sale securities, amortization of intangibles, goodwill and nonrecurring items. |
| | | | Selected Companies | |||||||||||
| | First Citizens | | | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
Tangible Common Equity / Tangible Assets (%) | | | 6.87 | | | 7.28 | | | 7.83 | | | 7.92 | | | 8.57 |
Common Equity Tier 1 Ratio (%) | | | 10.32 | | | 9.60 | | | 10.22 | | | 10.71 | | | 11.37 |
Total Capital Ratio (%) | | | 13.63 | | | 12.53 | | | 13.37 | | | 13.38 | | | 13.91 |
Loans / Deposits (%) | | | 78.2 | | | 82.7 | | | 88.2 | | | 86.2 | | | 91.3 |
Loan Loss Reserve / Gross Loans (%) | | | 0.68 | | | 1.15 | | | 1.45 | | | 1.44 | | | 1.64 |
Non-performing Assets / Loans + OREO (%)(1) | | | 1.18 | | | 0.99 | | | 0.85 | | | 1.07 | | | 0.59 |
Criticized Loans / Tier 1 (%) | | | 10.8 | | | 41.6 | | | 22.6 | | | 32.4 | | | 19.0 |
LTM Net Charge-offs / Average Loans (%) | | | 0.11 | | | 0.29 | | | 0.14 | | | 0.28 | | | 0.10 |
(1) | Non-performing assets included nonaccrual loans, accruing troubled debt restructured loans, loans 90+ days past due, and other real estate owned as defined by S&P Global Market Intelligence. |
| | | | Selected Companies | |||||||||||
| | First Citizens | | | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
1-Year Stock Price Change (%) | | | (27.1) | | | (34.8) | | | (31.4) | | | (29.6) | | | (27.4) |
YTD Stock Price Change (%) | | | (35.2) | | | (41.3) | | | (37.7) | | | (37.0) | | | (34.6) |
Stock Price / Tangible Book Value per Share (x) | | | 1.01 | | | 0.85 | | | 0.99 | | | 1.05 | | | 1.10 |
LTM Stock Price / EPS (x) | | | 8.4 | | | 8.8 | | | 9.9 | | | 10.9 | | | 11.0 |
Stock Price / 2020 EPS Estimate (x)(1) | | | 7.3(2) | | | 9.5 | | | 11.0 | | | 11.9 | | | 13.2 |
Stock Price / 2021 EPS Estimate (x)(1) | | | 7.9(2) | | | 8.3 | | | 9.6 | | | 10.4 | | | 11.4 |
Stock Price / 2022 EPS Estimate (x)(1) | | | 7.5(2) | | | 7.3 | | | 8.2 | | | 8.7 | | | 9.3 |
Dividend Yield (%) | | | 0.5 | | | 2.8 | | | 4.0 | | | 4.2 | | | 5.5 |
LTM Dividend Payout (%) | | | 3.9 | | | 25.0 | | | 39.2 | | | 40.6 | | | 54.4 |
(1) | Calculated using consensus “street estimates”. |
(2) | Calculated using financial forecasts and projections of First Citizens provided by First Citizens management. |
Fifth Third Bancorp |
Citizens Financial Group, Inc. |
KeyCorp |
Regions Financial Corporation |
M&T Bank Corporation |
Huntington Bancshares Incorporated |
Comerica Incorporated |
Zions Bancorporation, NA |
Popular, Inc. |
People’s United Financial, Inc. |
Signature Bank |
New York Community Bancorp, Inc. |
Synovus Financial Corp. |
TCF Financial Corporation |
| | Selected Companies | ||||||||||
| | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
LTM Core Return on Assets (%)(1) | | | 0.75 | | | 0.83 | | | 0.86 | | | 0.97 |
LTM Core Return on Equity (%)(1) | | | 6.17 | | | 7.85 | | | 7.60 | | | 8.55 |
LTM Core Return on Average Tangible Common Equity (%)(1) | | | 9.10 | | | 10.26 | | | 10.56 | | | 11.28 |
LTM Core Pre-tax Pre-provision Return on Average Assets (%)(2) | | | 1.69 | | | 1.80 | | | 1.76 | | | 1.85 |
LTM Net Interest Margin (%) | | | 3.04 | | | 3.12 | | | 3.20 | | | 3.41 |
LTM Fee Income / Revenue Ratio (%) | | | 20.4 | | | 28.4 | | | 25.6 | | | 33.7 |
LTM Efficiency Ratio (%) | | | 58.0 | | | 56.5 | | | 55.2 | | | 55.7 |
(1) | Core income excluded extraordinary items, nonrecurring items (including deferred tax asset revaluations), gains/losses on sale of securities, and amortization of intangibles as calculated by S&P Global Market Intelligence. |
(2) | Income before taxes excluding provision for loan losses and extraordinary items, excluding gain on the sale of available for sale securities, amortization of intangibles, goodwill and nonrecurring items. |
| | Selected Companies | ||||||||||
| | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
Tangible Common Equity / Tangible Assets (%) | | | 7.42 | | | 7.69 | | | 7.72 | | | 8.06 |
Common Equity Tier 1 Ratio (%) | | | 9.53 | | | 9.75 | | | 10.17 | | | 10.14 |
Total Capital Ratio (%) | | | 12.73 | | | 13.05 | | | 13.39 | | | 13.49 |
Loans / Deposits (%) | | | 78.5 | | | 85.0 | | | 85.6 | | | 90.2 |
Loan Loss Reserve / Gross Loans (%) | | | 1.32 | | | 1.63 | | | 1.69 | | | 2.04 |
Non-performing Assets / Loans + OREO (%)(1) | | | 1.25 | | | 1.02 | | | 1.47 | | | 0.88 |
Criticized Loans / Loans (%) | | | 4.3 | | | 3.1 | | | 3.7 | | | 1.9 |
LTM Net Charge-offs / Average Loans (%) | | | 0.46 | | | 0.30 | | | 0.33 | | | 0.12 |
(1) | Non-performing assets included nonaccrual loans, accruing troubled debt restructured loans, loans 90+ days past due, and other real estate owned as defined by S&P Global Market Intelligence. |
| | Selected Companies | ||||||||||
| | Bottom Quartile | | | Median | | | Average | | | Top Quartile | |
1-Year Stock Price Change (%) | | | (33.7) | | | (30.4) | | | (29.4) | | | (28.0) |
YTD Stock Price Change (%) | | | (41.2) | | | (37.7) | | | (36.8) | | | (32.7) |
Stock Price / Tangible Book Value per Share (x) | | | 0.88 | | | 0.98 | | | 0.97 | | | 1.03 |
Stock Price / 2020 EPS Estimate (x)(1) | | | 9.9 | | | 13.1 | | | 13.1 | | | 14.6 |
Stock Price / 2021 EPS Estimate (x)(1) | | | 9.3 | | | 9.9 | | | 9.6 | | | 10.4 |
Stock Price / 2022 EPS Estimate (x)(1) | | | 7.6 | | | 8.0 | | | 8.0 | | | 8.4 |
Dividend Yield (%) | | | 4.5 | | | 5.3 | | | 5.3 | | | 6.2 |
LTM Dividend Payout (%) | | | 49.0 | | | 59.8 | | | 58.0 | | | 65.5 |
(1) | Calculated using consensus “street estimates”. |
| | First Citizens as a % of Total | | | CIT as a % of Total | |
Fully Diluted Ownership | | | | | ||
At 0.0620x Merger Exchange Ratio | | | 61.2% | | | 38.8% |
Market Information | | | | | ||
Pre-Transaction Market Capitalization | | | 64.2% | | | 35.8% |
Balance Sheet | | | | | ||
Assets | | | 44.4% | | | 55.6% |
Gross Loans & Leases Held for Inv. | | | 42.1% | | | 57.9% |
Deposits | | | 48.6% | | | 51.4% |
Tangible Common Equity | | | 40.3% | | | 59.7% |
2021E Earnings | | | | | ||
2021 First Citizens Management Estimates / CIT Management Estimates | | | 46.6% | | | 53.4% |
| | First Citizens as a % of Total | | | CIT as a % of Total | |
2021 First Citizens Management Estimates / Adjusted CIT Management Estimates(1) | | | 58.2% | | | 41.8% |
2021 First Citizens Management Estimates / CIT Street Estimates | | | 65.4% | | | 34.6% |
2022E Earnings | | | | | ||
2022 First Citizens Management Estimates / CIT Management Estimates | | | 45.5% | | | 54.5% |
2022 First Citizens Management Estimates / Adjusted CIT Management Estimates(1) | | | 52.0% | | | 48.0% |
2022 First Citizens Management Estimates / CIT Street Estimates | | | 52.1% | | | 47.9% |
2023E Earnings | | | | | ||
2023 First Citizens Management Estimates / CIT Management Estimates(2) | | | 55.7% | | | 44.3% |
(1) | Adjusted to reflect a normalized loan loss provision of $45 million per quarter as directed by CIT management. |
(2) | Adjusted to reflect a normalized loan loss provision of $45 million per quarter, and excluding 50% of the elevated levels of gain on sale, as directed by CIT management. |
• | reviewed certain publicly available financial statements and other business and financial information of CIT and First Citizens, respectively; |
• | reviewed certain internal financial statements and other financial and operating data concerning CIT and First Citizens, respectively; |
• | reviewed certain financial projections prepared or furnished to Morgan Stanley by the managements of CIT and First Citizens, respectively (for information regarding such financial projections, see “Certain Unaudited Prospective Financial Information” beginning on page 116 of this joint proxy statement/prospectus); |
• | reviewed information relating to certain strategic, financial and operational benefits anticipated from the first step merger, prepared by the managements of CIT and First Citizens, respectively (such information is referred to herein as the “Synergies”); |
• | discussed the past and current operations and financial condition and the prospects of CIT, including information relating to certain strategic, financial and operational benefits anticipated from the first step merger, with senior executives of CIT; |
• | discussed the past and current operations and financial condition and the prospects of First Citizens, including information relating to certain strategic, financial and operational benefits anticipated from the first step merger, with senior executives of First Citizens; |
• | reviewed the pro forma impact of the first step merger on First Citizens’ earnings per share, cash flow, consolidated capitalization and certain financial ratios; |
• | reviewed the reported prices and trading activity for CIT common stock and First Citizens Class A common stock; |
• | compared the financial performance of CIT and First Citizens and the prices and trading activity of CIT common stock and First Citizens Class A common stock with that of certain other publicly-traded companies comparable with CIT and First Citizens, respectively, and their securities; |
• | participated in certain discussions and negotiations among representatives of CIT and First Citizens and certain parties and their financial and legal advisors; |
• | reviewed certain consultants’ reports relating to the assets of CIT and First Citizens prepared by the consultants to CIT and First Citizens (the “Consultant Reports”); |
• | reviewed the merger agreement and certain related documents; and |
• | performed such other analyses, reviewed such other information and considered such other factors as Morgan Stanley deemed appropriate. |
• | Regions Financial Corporation |
• | M&T Bank Corporation |
• | Huntington Bancshares Incorporated |
• | Comerica Incorporated |
• | Zions Bancorporation, NA |
• | Popular, Inc. |
• | People’s United Financial, Inc. |
• | Signature Bank |
• | New York Community Bancorp, Inc. |
• | Synovus Financial Corp. |
• | TCF Financial Corporation |
• | Capital One Financial Corporation |
• | Ally Financial Inc. |
• | Discover Financial Services |
• | Synchrony Financial |
• | New York Community Bancorp, Inc. |
• | BankUnited, Inc. |
• | SLM Corporation |
• | Investors Bancorp, Inc. |
• | Bank OZK |
• | multiple of price to estimated earnings per share for 2021, or Price / 2021E EPS; |
• | multiple of price to estimated earnings per share for 2022, or Price / 2022E EPS; and |
• | multiple of price to tangible book value per share, or Price / Tangible Book Value |
| | Group 1 of Selected Companies’ Top Quartile | | | Group 1 of Selected Companies’ Median | | | Group 1 of Selected Companies’ Bottom Quartile | | | CIT (CIT Street Forecasts) | | | CIT (Case 1 Adjusted CIT Financial Projections)(1) | | | CIT (Case 2 Adjusted CIT Financial Projections)(2) | |
Price / 2021E EPS | | | 10.1x | | | 9.6x | | | 8.6x | | | 8.3x | | | 6.2x | | | 7.5x |
Price / 2022E EPS | | | 8.3x | | | 7.9x | | | 7.5x | | | 4.5x | | | 4.6x | | | 5.3x |
Price / Tangible Book Value | | | 1.1x | | | 1.0x | | | 0.9x | | | 0.4x | | | 0.4x | | | 0.4x |
| | Group 2 of Selected Companies’ Top Quartile | | | Group 2 of Selected Companies’ Median | | | Group 2 of Selected Companies’ Bottom Quartile | | | CIT (CIT Street Forecasts) | | | CIT (Case 1 Adjusted CIT Financial Projections)(1) | | | CIT (Case 2 Adjusted CIT Financial Projections)(2) | |
Price / 2021E EPS | | | 9.3x | | | 8.8x | | | 8.6x | | | 8.3x | | | 6.2x | | | 7.5x |
Price / 2022E EPS | | | 7.3x | | | 6.9x | | | 6.3x | | | 4.5x | | | 4.6x | | | 5.3x |
Price / Tangible Book Value | | | 1.9x | | | 1.0x | | | 0.8x | | | 0.4x | | | 0.4x | | | 0.4x |
(1) | Represented earnings of CIT based on CIT management adjusted case with a normalized loan loss provision of $45,000,000 per quarter ($180,000,000 annual) as directed by the management of CIT (the “Case 1 Adjusted CIT Financial Projections”). |
(2) | Represented earnings of CIT based on CIT management adjusted case with a normalized loan loss provision of $45,000,000 per quarter ($180,000,000 annual) and excluding 50% of the elevated levels of gain on sales as directed by the management of CIT (the “Case 2 Adjusted CIT Financial Projections)”. |
| | CIT Metric | | | Multiple Statistic Range | | | Implied Value Per Share of CIT Common Stock | |
Price / 2021E EPS (CIT Street Forecasts) | | | $2.29 | | | 7.0x – 9.0x | | | $16.04 – $ 20.62 |
Price / 2021E EPS (Case 1 Adjusted CIT Financial Projections) | | | $3.10 | | | 7.0x – 9.0x | | | $21.68 – $ 27.88 |
Price / 2021E EPS (Case 2 Adjusted CIT Financial Projections) | | | $2.54 | | | 7.0x – 9.0x | | | $17.76 – $ 22.84 |
Price / 2022E EPS (CIT Street Forecasts) | | | $4.22 | | | 6.0x – 8.0x | | | $25.31 – $ 33.74 |
Price / 2022E EPS (Case 2 Adjusted CIT Financial Projections) | | | $3.61 | | | 6.0x – 8.0x | | | $21.67 – $ 28.90 |
• | Comerica Incorporated |
• | Zions Bancorporation, NA |
• | People’s United Financial, Inc. |
• | Signature Bank |
• | New York Community Bancorp, Inc. |
• | Synovus Financial Corp. |
• | TCF Financial Corporation |
• | East West Bancorp, Inc. |
• | First Horizon National Corporation |
• | BOK Financial Corporation |
• | Wintrust Financial Corporation |
• | Valley National Bancorp |
• | Cullen/Frost Bankers, Inc. |
• | South State Corporation |
• | F.N.B. Corporation |
• | Texas Capital Bancshares, Inc. |
• | Associated Banc-Corp |
• | BankUnited, Inc. |
• | Pinnacle Financial Partners, Inc. |
• | Hancock Whitney Corporation |
• | Prosperity Bancshares, Inc. |
• | Webster Financial Corporation |
• | Western Alliance Bancorporation |
• | Sterling Bancorp |
• | Commerce Bancshares, Inc. |
• | multiple of price to estimated earnings per share for 2021, or Price / 2021E EPS; |
• | multiple of price to estimated earnings per share for 2022, or Price / 2022E EPS; and |
• | multiple of price to tangible book value per share, or Price / Tangible Book Value |
| | Selected Companies’ Top Quartile | | | Selected Companies’ Median | | | Selected Companies’ Bottom Quartile | | | First Citizens | |
Price / 2021E EPS | | | 11.0x | | | 9.9x | | | 8.3x | | | 7.9x |
Price / 2022E EPS | | | 9.1x | | | 8.3x | | | 7.3x | | | 7.5x |
Price / Tangible Book Value | | | 1.1x | | | 1.0x | | | 0.9x | | | 1.1x |
| | First Citizens Metric | | | Multiple Statistic Range | | | Implied Value Per Share of First Citizens Common Stock | |
Price / 2021E EPS | | | $43.57 | | | 9.0x –11.0x | | | $392.13 – $ 479.27 |
Price / 2022E EPS | | | $46.08 | | | 8.0x – 10.0x | | | $368.66 – $ 460.83 |
| | Implied Exchange Ratio | |
Public Trading Comparables | | | |
Price / 2021E EPS (First Citizens Financial Projections / CIT Street Forecasts) | | | 0.033x – 0.053x |
Price / 2021E EPS (First Citizens Financial Projections / Case 1 Adjusted CIT Financial Projections) | | | 0.045x – 0.071x |
Price / 2021E EPS (First Citizens Financial Projections / Case 2 Adjusted CIT Financial Projections) | | | 0.037x – 0.058x |
Price / 2022E EPS (First Citizens Financial Projections / CIT Street Forecasts) | | | 0.055x – 0.092x |
Price / 2021E EPS (First Citizens Financial Projections / Case 2 Adjusted CIT Financial Projections) | | | 0.047x – 0.078x |
Regression Analysis | | | |
Regression Based (First Citizens Financial Projections / CIT Street Forecasts) | | | 0.055x – 0.081x |
Regression Based (First Citizens Financial Projections / Case 2 Adjusted CIT Financial Projections) | | | 0.043x – 0.064x |
Dividend Discount Analysis | | | |
Dividend Discount Analysis (First Citizens Financial Projections / CIT Street Forecasts) | | | 0.035x – 0.060x |
Dividend Discount Analysis (First Citizens Financial Projections / CIT Financial Projections) | | | 0.035x – 0.058x |
| | Implied Exchange Ratio | |
October 14, 2020 | | | 0.055x |
One-Month Average | | | 0.055x |
Three-Month Average | | | 0.051x |
Six-Month Average | | | 0.055x |
One-Year Average | | | 0.066x |
(Dollars in millions, except per share data) | | | 2020E | | | 2021E | | | 2022E | | | 2023E | | | 2024E | | | 2025E |
Net Income Available to Common Shareholders | | | $466.8 | | | $427.7 | | | $452.4 | | | $493.1 | | | $537.5 | | | $585.7 |
Earnings Per Share | | | 46.37 | | | 43.57 | | | 46.08 | | | 50.23 | | | 54.75 | | | 59.67 |
Total Assets | | | 48,891 | | | 49,966 | | | 53,464 | | | 57,233 | | | 61,260 | | | 65,558 |
Dividends Per Share | | | 1.67 | | | 1.88 | | | 2.25 | | | 2.62 | | | 2.99 | | | 3.36 |
(Dollars in millions, except per share data) | | | 2020E | | | 2021E | | | 2022E | | | 2023E | | | 2024E | | | 2025E |
Net (Loss) Income Available to Common Shareholders (excluding noteworthy items) | | | $(154.5) | | | $490.3 | | | $541.5 | | | $391.8 | | | $423.1 | | | $457.0 |
Earnings Per Share | | | (1.57) | | | 4.94 | | | 5.40 | | | 3.90 | | | 4.22 | | | 4.55 |
Net Income Available to Common Shareholders (excluding noteworthy items and normalized) | | | 224.6 | | | 251.9 | | | 362.8 | | | 391.8 | | | 423.1 | | | 457.0 |
Earnings Per Share (normalized) | | | 2.29 | | | 2.54 | | | 3.61 | | | 3.90 | | | 4.22 | | | 4.55 |
Total Assets | | | 57,109 | | | 59,812 | | | 62,586 | | | 66,341 | | | 70,322 | | | 74,541 |
1. | The provision for loans losses was assumed to be $180 million annually on a pretax basis. |
2. | Pre-tax gains on sale of railcars, mortgages and securities which were estimated to be approximately $150 million annually in the Net Income Excluding Noteworthy Items were limited to 50%, or approximately $75 million, in the Normalized Net Income Excluding Noteworthy Items. |
• | CIT RSUs. Except as otherwise agreed by First Citizens and CIT, each outstanding CIT RSU, other than a CIT Director RSU, will, automatically and without any required action on the part of the holder thereof, be converted into a number of restricted stock units in respect of shares of First Citizens Class A common stock equal to the product (with the result rounded up to the nearest whole share) of (i) the number of shares of CIT common stock subject to each such CIT RSU as of immediately prior to the effective time determined based on target level performance (to the extent applicable) multiplied by (ii) the exchange ratio. Each converted award will in all other respects be subject to the same terms and conditions (including vesting terms, payment timing and rights to receive dividend equivalents) applicable to the existing CIT RSU under the applicable equity plan and award agreement as in effect immediately prior to the effective time. |
• | CIT Director RSUs. Except as otherwise agreed by First Citizens and CIT, each outstanding CIT Director RSU that is not subject to a deferral election, will, in accordance with its terms, at the effective time, automatically and without any required action on the part of the holder thereof, be converted into the right to receive the merger consideration in respect of the number of shares of CIT common stock subject to such CIT Director RSU, less applicable tax withholding (if any), which will be delivered as soon as reasonably practicable following the closing date and in no event later than five (5) days following the closing date. |
• | CIT PSUs. Except as otherwise agreed by First Citizens and CIT, each outstanding CIT PSU will, automatically and without any required action on the part of the holder thereof, be converted into a number of restricted stock units in respect of shares of First Citizens Class A common stock equal to the product (with the result rounded up to the nearest whole share) of (i) the number of shares of CIT common stock subject to each such CIT PSU as of immediately prior to the effective time determined based on target level performance multiplied by (ii) the exchange ratio. Each converted award will in all other respects be subject to the same terms and conditions (including rights to receive dividend equivalents) applicable to the existing CIT PSU under the applicable equity plan and award agreement as in effect immediately prior to the effective time, provided that vesting will be subject only to continued service of the holder through each applicable final performance date and will not be subject to any performance goals or metrics following the effective time. |
• | April 1, 2021 as the closing date of the merger; |
• | each named executive officer will experience a qualifying termination at the effective time; |
• | the named executive officers’ base salary rate and annual target bonus remain unchanged from those in place as of December 18, 2020; |
• | equity awards that are outstanding as of December 18, 2020; |
• | a price per share of CIT common stock of $27.258 (the average closing market price of CIT common stock over the first five (5) business days following the public announcement of the merger on October 15, 2020); and |
• | for purposes of the unvested CIT equity awards set forth in the table, target performance for awards granted in 2019 and 2020. |
Name(1) | | | Cash ($)(2) | | | Equity ($)(3) | | | Health and Welfare Subsidy ($)(4) | | | Total ($) |
Named Executive Officers | | | | | | | | | ||||
Ellen R. Alemany | | | $13,000,000 | | | $3,990,599 | | | — | | | $16,990,599 |
John J. Fawcett | | | $4,667,948 | | | $1,276,992 | | | $40,310 | | | $5,985,250 |
David M. Harnisch | | | $3,800,000 | | | $1,567,727 | | | — | | | $5,367,727 |
Philip C. Robbins | | | $2,710,256 | | | $779,208 | | | $40,310 | | | $3,529,774 |
(1) | Table excludes former CIT employee and named executive officer Robert Rubino, whose last day of employment with CIT was June 1, 2020. Upon his termination, which was not in connection with a change of control, he received (i) cash worth a total amount of $1,490,155 (comprising $920,000 in cash severance and pay in lieu of notice, $550,000 in severance bonus and $20,155 in health and welfare subsidy), (ii) equity worth $912,041 ($685,465 in the form of unvested RSUs and $226,576 in the form of unvested PSUs) and (iii) a benefit in kind worth $25,000 for outplacement benefits. Of this amount, $570,000 has already been paid by CIT and the remaining balance is payable within 30 days following the six-month anniversary of his separation from service. |
(2) | The cash amounts payable to each of Mr. Fawcett and Mr. Robbins consist of the following pursuant to the CIT Employee Severance Plan: (a) (i) his annual base pay, plus (ii) the average of the highest two of the last three years’ short-term incentive awards, or the simple average if the period is less than three years (or, if the named executive officer was not eligible for a short-term incentive during such period, the current year short-term incentive guarantee or estimate/target, if applicable), (b) a severance bonus, as |
Name | | | Accelerated Retention Bonus ($) | | | Cash Severance ($) | | | Severance Bonus ($) | | | Outplacement Benefits ($) | | | Total ($) |
Named Executive Officers | | | | | | | | | | | |||||
Ellen R. Alemany | | | $13,000,000 | | | — | | | — | | | — | | | $13,000,000 |
John J. Fawcett | | | — | | | $4,234,615 | | | $408,333 | | | $25,000 | | | $4,667,948 |
David M. Harnisch | | | $3,800,000 | | | — | | | — | | | — | | | $3,800,000 |
Philip C. Robbins | | | — | | | $2,476,923 | | | $208,333 | | | $25,000 | | | $2,710,256 |
(3) | The CIT equity awards held by CIT named executive officers generally will vest in accordance with their terms or upon retirement or a qualifying termination of employment without cause or for good reason within the two-year period following the effective time (i.e., “double-trigger”). Set forth below are the separate values of each type of unvested equity-based award held by each of CIT’s named executive officers that would vest on a qualifying termination at the effective time. |
Name | | | Unvested RSUs ($) | | | Unvested PSUs ($) | | | Total ($) |
Named Executive Officers | | | | | | | |||
Ellen R. Alemany | | | $1,392,773 | | | $2,597,826 | | | $3,990,599 |
John J. Fawcett | | | $445,687 | | | $831,304 | | | $1,276,992 |
David M. Harnisch | | | $836,870 | | | $730,857 | | | $1,567,727 |
Philip C. Robbins | | | $382,705 | | | $396,504 | | | $779,208 |
(4) | Pursuant to the CIT Employee Severance Plan, represents a cash benefits subsidy equal to the cost of the employer portion of health premiums for a period of twenty-four (24) months upon a “change of control termination”. All such amounts are “double trigger”. Mr. Alemany and Mr. Harnisch are not entitled to continued health or other welfare benefits following termination pursuant to the terms of their letter agreements with First Citizens. |
• | eleven (11) current First Citizens directors, which will include Frank B. Holding, Jr., the current Chairman and Chief Executive Officer of First Citizens; and |
• | three (3) current CIT directors, which will include Ellen R. Alemany, the current Chairwoman of the CIT board of directors. |
• | CIT RSUs. Except as otherwise agreed by First Citizens and CIT, each outstanding CIT RSU, other than a CIT Director RSU, will, automatically and without any required action on the part of the holder thereof, be converted into a number of restricted stock units in respect of shares of First Citizens Class A common stock equal to the product (with the result rounded up to the nearest whole share) of (i) the number of shares of CIT common stock subject to each such CIT RSU as of immediately prior |
• | CIT Director RSUs. Except as otherwise agreed by First Citizens and CIT, each outstanding CIT Director RSU that is not subject to a deferral election, will, in accordance with its terms, at the effective time, automatically and without any required action on the part of the holder thereof, be converted into the right to receive the merger consideration in respect of the number of shares of CIT common stock subject to such CIT Director RSU, less applicable tax withholding (if any), which will be delivered as soon as reasonably practicable following the closing date and in no event later than five (5) days following the closing. |
• | CIT PSUs. Except as otherwise agreed by First Citizens and CIT, each outstanding CIT PSU will, automatically and without any required action on the part of the holder thereof, be converted into a number of restricted stock units in respect of shares of First Citizens Class A common stock equal to the product (with the result rounded up to the nearest whole share) of (i) the number of shares of CIT common stock subject to each such CIT PSU as of immediately prior to the effective time determined based on target level performance multiplied by (ii) the exchange ratio. Each converted award will in all other respects be subject to the same terms and conditions (including rights to receive dividend equivalents) applicable to the existing CIT PSU under the applicable equity plan and award agreement as in effect immediately prior to the effective time, provided that vesting will be subject only to continued service of the holder through each applicable final performance date and will not be subject to any performance goals or metrics following the effective time. |
• | corporate matters, including due organization, qualification and subsidiaries; |
• | capitalization; |
• | authority relative to execution and delivery of the merger agreement and the absence of conflicts with, or violations of, organizational documents or other obligations as a result of the mergers; |
• | required governmental and other regulatory and self-regulatory filings and consents and approvals in connection with the mergers; |
• | reports to regulatory agencies; |
• | financial statements, internal controls, books and records, and absence of undisclosed liabilities; |
• | broker’s fees payable in connection with the mergers; |
• | the absence of certain changes or events; |
• | legal and regulatory proceedings; |
• | tax matters; |
• | employee benefit matters; |
• | SEC reports; |
• | compliance with applicable laws; |
• | certain material contracts; |
• | securitizations |
• | absence of agreements with regulatory agencies; |
• | environmental matters; |
• | investment securities, commodities and derivatives; |
• | real and personal property; |
• | intellectual property; |
• | related party transactions; |
• | inapplicability of state takeover statutes; |
• | absence of action or circumstance that would prevent the mergers from qualifying as a reorganization under Section 368(a) of the Code; |
• | the receipt of opinions of each party’s respective financial advisors; |
• | the accuracy of information supplied for inclusion in this joint proxy statement/prospectus and other similar documents; |
• | loan portfolio matters; |
• | insurance matters; |
• | investment advisor subsidiaries; |
• | insurance subsidiaries; |
• | broker-dealer subsidiaries; |
• | railcars (with respect to CIT); |
• | railcar lease agreements (with respect to CIT); and |
• | material commercial arrangements (with respect to CIT). |
• | changes, after the date of the merger agreement, in GAAP or applicable regulatory accounting requirements; |
• | changes, after the date of the merger agreement, in laws, rules or regulations (including COVID-19 pandemic measures) of general applicability to companies in the industries in which such party and its subsidiaries operate, or interpretations thereof by courts or governmental entities; |
• | changes, after the date of the merger agreement, in global, national or regional political conditions (including the outbreak of war or acts of terrorism) or in economic or market (including equity, credit and debt markets, as well as changes in interest rates) conditions affecting the financial services industry generally and not specifically relating to such party or its subsidiaries (including any such changes arising out of the COVID-19 pandemic); |
• | changes, after the date of the merger agreement, resulting from hurricanes, earthquakes, tornadoes, floods or other natural disasters or from any outbreak of any disease or other public health event (including the COVID-19 pandemic); |
• | public disclosure of the transactions contemplated by the merger agreement or actions expressly required by the merger agreement or that are taken with the prior written consent of the other party in contemplation of the transactions contemplated by the merger agreement; or |
• | a decline in the trading price of a party’s common stock or the failure, in and of itself, to meet earnings projections or internal financial forecasts, but not, in either case, including any underlying causes thereof; |
• | other than (i) federal funds borrowings and Federal Home Loan Bank borrowings, in each case with a maturity not in excess of two (2) years, (ii) the creation of deposit liabilities (including reciprocal and brokered deposits), (iii) issuances of letters of credit, (iv) purchases of federal funds, (v) sales of certificates of deposit and (vi) entry into repurchase agreements, in each case in the ordinary course of business, incur any indebtedness for borrowed money (other than indebtedness of CIT or any of its wholly-owned subsidiaries to CIT or any of its wholly-owned subsidiaries, on the one hand, or of First Citizens or any of its wholly-owned subsidiaries to First Citizens or any of its wholly-owned subsidiaries, on the other hand), or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity; |
• | adjust, split, combine or reclassify any capital stock; |
• | make, declare, pay or set a record date for any dividend, or any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or other equity or voting securities or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) or exchangeable into or |
• | grant any stock appreciation rights, stock options, restricted stock units, performance units, phantom stock units, restricted shares or other equity-based awards or interests, or grant any person any right to acquire any CIT securities or any CIT subsidiary securities, in the case of CIT, or any First Citizens securities or any First Citizens subsidiary securities, in the case of First Citizens; |
• | issue, sell, transfer, encumber or otherwise permit to become outstanding any shares of capital stock or voting securities or equity interests or securities convertible (whether currently convertible or convertible only after the passage of time of the occurrence of certain events) or exchangeable into, or exercisable for, any shares of its capital stock or other equity or voting securities, including any CIT securities or any CIT subsidiary securities, in the case of CIT, or any First Citizens securities or any First Citizens subsidiary securities, in the case of First Citizens, or any options, warrants, or other rights of any kind to acquire any shares of capital stock or other equity or voting securities, including any CIT securities or any CIT subsidiary securities, in the case of CIT, or any First Citizens securities or any First Citizens subsidiary securities, in the case of First Citizens, except pursuant to the exercise of stock appreciation rights or stock options or the settlement of equity compensation awards in accordance with their terms; |
• | sell, transfer, mortgage, encumber or otherwise dispose of any of its material properties or assets to any individual, corporation or other entity other than a wholly-owned subsidiary, or cancel, release or assign any indebtedness to any such person or any claims held by any such person, in each case other than in the ordinary course of business or pursuant to contracts or agreements in force at the date of the merger agreement; |
• | except for foreclosure or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith in the ordinary course of business, make any material investment in or acquisition of (whether by purchase of stock or securities, contributions to capital, property transfers, merger or consolidation, or formation of a joint venture or otherwise) any other person or the property or assets of any other person for consideration in excess of $100,000,000, in each case other than a wholly-owned subsidiary of CIT or First Citizens, as applicable; |
• | in each case except for transactions in the ordinary course of business, terminate, materially amend, or waive any material provision of, certain material contracts or make any change in any instrument or agreement governing the terms of any of its securities, other than normal renewals of contracts without material adverse changes of terms with respect to CIT or First Citizens, as applicable, or enter into certain material contracts; |
• | except as required under applicable law or the terms of any CIT or First Citizens benefit plans existing as of the date of the merger agreement, (i) enter into, establish, adopt, amend or terminate any CIT benefit plan or First Citizens benefit plan, or any arrangement that would be a CIT benefit plan or a First Citizens benefit plan if in effect on the date of the merger agreement, other than (x) in the ordinary course of business consistent with past practice and (y) as would not reasonably be expected to materially increase the cost of benefits under any CIT benefit plan, First Citizens benefit plan, or certain material contracts, as the case may be, (ii) increase the compensation or benefits payable to any |
• | settle any material claim, suit, action or proceeding, except involving solely monetary remedies in an amount, individually and in the aggregate, that is not material to CIT or First Citizens, as applicable, and that would not impose any material restriction on, or create any adverse precedent that would be material to, the business of it or its subsidiaries or the combined company or to the receipt of regulatory approvals for the first step merger on a timely basis; |
• | take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to prevent the first step merger and second step merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; |
• | amend its certificate of incorporation, its bylaws or comparable governing documents of its subsidiaries that are “significant subsidiaries” within the meaning of Rule 1-02 of Regulation S-X of the SEC; |
• | other than in prior consultation with the other party, materially restructure or materially change its investment securities or derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported; |
• | implement or adopt any change in its accounting principles, practices or methods, other than as required by GAAP; |
• | enter into any new line of business or, other than in the ordinary course of business consistent with past practice, change in any material respect its lending, investment, underwriting, risk and asset liability management and other banking and operating, securitization and servicing policies (including any material change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof or individual loans), except as required by applicable law, regulation or policies imposed by any governmental entity; |
• | make, change or revoke any material tax election, change an annual tax accounting period, adopt or change any material tax accounting method, file any material amended tax return, enter into any closing agreement with respect to a material amount of taxes, or settle any material tax claim, audit, assessment or dispute or surrender any material right to claim a refund of taxes; |
• | merge or consolidate itself or any of its subsidiaries that are “significant subsidiaries” within the meaning of Rule 1-02 of Regulation S-X of the SEC with any other person, or restructure, reorganize or completely or partially liquidate or dissolve it or any of its subsidiaries that are “significant subsidiaries” within the meaning of Rule 1-02 of Regulation S-X of the SEC; |
• | with respect to CIT, except as to any railcar asset included on the railcar tape, subject to any of its properties or assets to any material lien (other than permitted encumbrances and other liens existing as of the date of the merger agreement and other than in connection with securing advances, repurchase agreements, and other borrowings not prohibited by the merger agreement); |
• | with respect to CIT, sell, pledge, dispose of, transfer, encumber or otherwise impose any lien on any railcar asset included on the railcar tape or otherwise leased by CIT or any of its subsidiaries as lessor, except (i) the sale or disposal of railcars as a result of a casualty event, (ii) between CIT and its subsidiaries, (iii) the release, in the ordinary course of business, of any railcar that comes off-lease between the date of the merger agreement and the closing date of the mergers, or (iv) the sale of |
• | take any action that is intended or expected to result in any of the conditions to the mergers set forth in the merger agreement not being satisfied, except as may be required by applicable law; or |
• | agree to take, make any commitment to take, or adopt any resolutions of its board of directors or similar governing body in support of, any of the foregoing. |
• | receipt of the requisite First Citizens vote and the requisite CIT vote; |
• | the authorization for listing on Nasdaq, subject to official notice of issuance, of the shares of First Citizens Class A common stock and First Citizens series C preferred stock that will be issuable pursuant to the merger agreement; |
• | all requisite regulatory approvals having been obtained and remaining in full force and effect, and all statutory waiting periods in respect thereof having expired or been terminated, without the imposition of any requirement to take or commit to take any action or agree to any condition or restriction that would reasonably be expected to have a material adverse effect on the combined company and its subsidiaries, taken as a whole, after giving effect to the mergers; |
• | the effectiveness of the registration statement of which this joint proxy statement/prospectus forms a part, and the absence of any stop order suspending the effectiveness of the registration statement or proceedings for such purpose initiated or threatened by the SEC and not withdrawn; |
• | no order, injunction, or decree issued by any court or governmental entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the mergers, the bank merger or any of the other transactions contemplated by the merger agreement being in effect, and no law, statute, rule, regulation, order, injunction or decree having been enacted, entered, promulgated or enforced by any governmental entity which prohibits or makes illegal consummation of the mergers, the bank merger or any of the other transactions contemplated by the merger agreement; |
• | the accuracy of the representations and warranties of the other party contained in the merger agreement, generally as of the date on which the merger agreement was entered into and as of the closing date, subject to the materiality standards provided in the merger agreement (and the receipt by each party of a certificate dated as of the closing date and signed on behalf of the other party by the chief executive officer or the chief financial officer to such effect); |
• | the performance by the other party in all material respects of the obligations, covenants and agreements required to be performed by it under the merger agreement at or prior to the closing date (and the receipt by each party of a certificate dated as of the closing date and signed on behalf of the other party by the chief executive officer or the chief financial officer to such effect); and |
• | receipt by such party of an opinion of legal counsel to the effect that on the basis of facts, representations and assumptions set forth or referred to in such opinion, the mergers will together qualify as a “reorganization” within the meaning of Section 368(a) of the Code. |
• | by mutual written consent of First Citizens and CIT; |
• | by either First Citizens or CIT if any governmental entity that must grant a requisite regulatory approval has denied approval of the first step merger, the second step merger or the bank merger and such denial has become final and nonappealable or any governmental entity of competent jurisdiction has issued a final and nonappealable order, injunction, decree or other legal restraint or prohibition permanently enjoining or otherwise prohibiting or making illegal the completion of the first step merger, the second step merger or the bank merger, unless the failure to obtain a requisite regulatory approval is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations, covenants and agreements set forth in the merger agreement; |
• | by either First Citizens or CIT if the first step merger has not been completed on or before the termination date (October 15, 2021), unless the failure of the first step merger to be completed by such date is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations, covenants and agreements set forth in the merger agreement; |
• | by either First Citizens or CIT (provided that the terminating party is not then in material breach of any representation, warranty, obligation, covenant or other agreement contained in the merger agreement) if there is a breach of any of the obligations, covenants or agreements or any of the representations or warranties (or if any such representation or warranty ceases to be true) set forth in the merger agreement on the part of CIT, in the case of a termination by First Citizens, or First Citizens, in the case of a termination by CIT, which breach or failure to be true, either individually or in the aggregate with all other breaches by such party (or failures of such representations or warranties to be true), would constitute, if occurring or continuing on the closing date, the failure of an applicable closing condition of the terminating party and which is not cured within forty-five (45) days following written notice to the other party, or by its nature or timing cannot be cured during such period (or such fewer days as remain prior to the termination date); |
• | by either First Citizens or CIT if: (1) the requisite CIT vote has not been obtained at the CIT special meeting or at any adjournment or postponement thereof taken in accordance with the merger agreement or (2) the requisite First Citizens vote has not been obtained at the First Citizens special meeting or at any adjournment or postponement taken in accordance with the merger agreement; |
• | by either First Citizens or CIT if, prior to obtaining the requisite vote from their respective stockholders, the CIT board of directors or the First Citizens board of directors, authorizes CIT or First Citizens, respectively, to enter into an alternative acquisition agreement in response to a superior proposal; or |
• | by either First Citizens or CIT, if, prior to obtaining the requisite vote from their respective stockholders, the CIT board of directors or the First Citizens board of directors, respectively, has made a recommendation change or breaches in any material respect its obligations relating to non-solicitation of acquisition proposals or its obligations related to stockholder approval and the board of directors’ recommendation. |
• | In the event that the merger agreement is terminated by CIT pursuant to the sixth bullet set forth under “—Termination of the Merger Agreement” above or by First Citizens pursuant to the seventh bullet set forth under “—Termination of the Merger Agreement” above. In such case the termination fee must be paid to First Citizens within two (2) business days of the date of termination. |
• | In the event that, after the date of the merger agreement and prior to the termination of the merger agreement, a bona fide acquisition proposal has been communicated to or otherwise made known to the CIT board of directors or CIT’s senior management or has been made directly to CIT stockholders, or any person has publicly announced (and not withdrawn at least two (2) business days prior to the CIT special meeting) an acquisition proposal, in each case, with respect to CIT, and (i) (A) thereafter the merger agreement is terminated by either First Citizens or CIT pursuant to the third bullet set forth under “—Termination of the Merger Agreement” above without the requisite CIT vote having been obtained (and all other conditions to CIT’s obligation to complete the mergers had been satisfied or were capable of being satisfied prior to such termination) or (B) thereafter the merger agreement is terminated by First Citizens pursuant to the fourth bullet set forth under “—Termination of the Merger Agreement” above as a result of a willful breach of the merger agreement by CIT, and (ii) prior to the date that is twelve (12) months after the date of such termination, CIT enters into a definitive agreement or consummates a transaction with respect to an acquisition proposal (whether or not the same acquisition proposal as that referred to above), provided that for purposes of the foregoing, all references in the definition of acquisition proposal to “twenty-five percent (25%)” will instead refer to “fifty percent (50%)”. In such case, the termination fee must be paid to First Citizens on the earlier of the date CIT enters into such definitive agreement and the date of consummation of such transaction. |
• | In the event that the merger agreement is terminated by First Citizens pursuant to the sixth bullet set forth under “—Termination of the Merger Agreement” above or by CIT pursuant to the seventh bullet set forth under “—Termination of the Merger Agreement” above. In such case the termination fee must be paid to CIT within two (2) business days of the date of termination. |
• | In the event that, after the date of the merger agreement and prior to the termination of the merger agreement, a bona fide acquisition proposal has been communicated to or otherwise made known to the First Citizens board of directors or First Citizens’ senior management or has been made directly to First Citizens stockholders, or any person has publicly announced (and not withdrawn at least two (2) business days prior to the First Citizens special meeting) an acquisition proposal, in each case, with respect to First Citizens, and (i) (A) thereafter the merger agreement is terminated by either First Citizens or CIT pursuant to the third bullet set forth under “—Termination of the Merger Agreement” above without the requisite First Citizens vote having been obtained (and all other conditions to First Citizens’ obligation to complete the mergers had been satisfied or were capable of being satisfied prior to such termination) or (B) thereafter the merger agreement is terminated by CIT pursuant to the fourth bullet set forth under “—Termination of the Merger Agreement” above as a result of a willful breach of the merger agreement by First Citizens and (ii) prior to the date that is twelve (12) months after the date of such termination, First Citizens enters into a definitive agreement or consummates a transaction with respect to an acquisition proposal (whether or not the same acquisition proposal as that referred to above), provided that for purposes of the foregoing, all references in the definition of acquisition proposal to “twenty-five percent (25%)” will instead refer to “fifty percent (50%)”. In such case, the termination fee must be paid to CIT on the earlier of the date First Citizens enters into such definitive agreement and the date of consummation of such transaction. |
• | a citizen or resident of the United States; |
• | a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States or any of its political subdivisions; |
• | a trust if it (i) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (ii) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person; or |
• | an estate that is subject to United States federal income tax on its income regardless of its source. |
• | a financial institution; |
• | a tax-exempt organization; |
• | an S corporation or other pass-through entity; |
• | an insurance company; |
• | a mutual fund; |
• | a dealer in securities or foreign currencies; |
• | a trader in securities who elects the mark-to-market method of accounting for your securities; |
• | a holder of CIT common stock subject to the alternative minimum tax provisions of the Code; |
• | a holder of CIT common stock who received CIT common stock through the exercise of employee stock options or through a tax-qualified retirement plan or otherwise as compensation; |
• | a real estate investment trust; |
• | a regulated investment company; |
• | a person that has a functional currency other than the U.S. dollar; |
• | a holder of options granted under any CIT benefit plan; or |
• | a holder of CIT common stock who holds CIT common stock as part of a hedge, straddle or a constructive sale or conversion transaction. |
• | you will not recognize gain or loss when you exchange your CIT common stock solely for First Citizens common stock, except with respect to any cash received instead of a fractional share of First Citizens common stock; |
• | your aggregate tax basis in the First Citizens Class A common stock that you receive in the mergers (including any fractional share interest you are deemed to receive and exchange for cash) will equal your aggregate tax basis in the CIT common stock you surrender; and |
• | your holding period for the First Citizens Class A common stock that you receive in the mergers (including any fractional share interest you are deemed to receive and exchange for cash) will include your holding period for the shares of CIT common stock that you surrender in the exchange. |
• | furnish a correct taxpayer identification number and certify that you are not subject to backup withholding on the Form W-9 (or a suitable substitute or successor form) included in the letter of transmittal to be delivered to you following the completion of the mergers and otherwise comply with all the applicable requirements of the backup withholding rules; or |
• | are otherwise exempt from backup withholding. |
• | senior to the First Citizens common stock and any other class or series of shares of First Citizens capital stock First Citizens may issue in the future ranking junior to the First Citizens series B preferred stock as to payment of dividends and/or distribution of assets upon First Citizens’ liquidation, dissolution or winding-up; |
• | equally with First Citizens series A preferred stock and First Citizens series B preferred stock or any other series of preferred stock First Citizens may issue in the future ranking equal to the First Citizens series B preferred stock as to payment of dividends and/or distribution of assets upon First Citizens’ liquidation, dissolution or winding-up; and |
• | junior to any series of preferred stock First Citizens may issue in the future ranking senior to the First Citizens series B preferred stock as to payment of dividends and/or distribution of assets upon First Citizens’ liquidation, dissolution or winding-up, and to all of First Citizens’ existing and future debt obligations. |
• | redemptions, purchases or other acquisitions of shares of dividend junior stock in connection with the administration of any employee benefit plan in the ordinary course of business; |
• | any dividends or distributions of rights or dividend junior stock in connection with a stockholders’ rights plan or any redemption or repurchase of rights pursuant to any stockholders’ rights plan; |
• | the acquisition by First Citizens or any of its subsidiaries of record ownership in dividend junior stock or dividend parity stock for the beneficial ownership of any other persons (other than for the beneficial ownership by First Citizens or any of its subsidiaries), including as trustees or custodians; and |
• | the exchange or conversion of (i) dividend junior stock for or into other dividend junior stock or (ii) dividend parity stock for or into other dividend parity stock (with the same or lesser aggregate liquidation preference) or dividend junior stock, and, in each case, the payment of cash solely in lieu of fractional shares. |
• | the redemption date; |
• | the number of shares of First Citizens series B preferred stock to be redeemed and, if less than all the shares held by the holder are to be redeemed, the number of shares of First Citizens series B preferred stock to be redeemed from the holder; |
• | the redemption price, which will be equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends; and |
• | that dividends on the shares to be redeemed shall cease to accrue on the redemption date. |
• | authorize, create or issue, or increase the authorized amount of, shares of any class or series of stock ranking senior to the First Citizens series B preferred stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up of First Citizens, or issue any obligation or security convertible into or exchangeable for or evidencing the right to purchase, any such class or series of First Citizens’ capital stock; |
• | amend, alter or repeal the provisions of First Citizens’ charter, whether by merger, consolidation or otherwise, so as to materially and adversely affect the powers, preferences, privileges or rights of First Citizens series B preferred stock, taken as a whole; provided, however, that any amendment to authorize, create or issue, or increase the authorized amount of, any securities junior to or in parity with First Citizens series B preferred stock, or any securities convertible into or exchangeable for such junior or parity securities, will not be deemed to materially and adversely affect the powers, preferences, privileges or rights of First Citizens series B preferred stock; or |
• | consolidate with or merge into any other corporation, complete a binding share exchange or reclassification involving the First Citizens series B preferred stock or complete the sale, conveyance, exchange or transfer of all or substantially all of the assets or business of First Citizens unless, in any case, the shares of First Citizens series B preferred stock outstanding at the time of such consolidation or merger or sale either (i) remain outstanding or (ii) are converted into or exchanged for preference securities of the surviving entity or any entity controlling the surviving entity having such rights, |
• | senior to the First Citizens common stock and any other class or series of shares of First Citizens capital stock First Citizens may issue in the future ranking junior to the First Citizens series C preferred stock as to payment of dividends and/or distribution of assets upon First Citizens’ liquidation, dissolution or winding-up; |
• | equally with First Citizens series A preferred stock and First Citizens series B preferred stock or any other series of preferred stock First Citizens may issue in the future ranking equal to the First Citizens series C preferred stock as to payment of dividends and/or distribution of assets upon First Citizens’ liquidation, dissolution or winding-up; and |
• | junior to any series of preferred stock First Citizens may issue in the future ranking senior to the First Citizens series C preferred stock as to payment of dividends and/or distribution of assets upon First Citizens’ liquidation, dissolution or winding-up, and to all of First Citizens’ existing and future debt obligations. |
• | redemptions, purchases or other acquisitions of shares of dividend junior stock in connection with the administration of any employee benefit plan in the ordinary course of business; |
• | any dividends or distributions of rights or dividend junior stock in connection with a stockholders’ rights plan or any redemption or repurchase of rights pursuant to any stockholders’ rights plan; |
• | the acquisition by First Citizens or any of its subsidiaries of record ownership in dividend junior stock or dividend parity stock for the beneficial ownership of any other persons (other than for the beneficial ownership by First Citizens or any of its subsidiaries), including as trustees or custodians; and |
• | the exchange or conversion of (i) dividend junior stock for or into other dividend junior stock or (ii) dividend parity stock for or into other dividend parity stock (with the same or lesser aggregate liquidation preference) or dividend junior stock, and, in each case, the payment of cash solely in lieu of fractional shares. |
• | the redemption date; |
• | the number of shares of the First Citizens series C preferred stock to be redeemed and, if less than all the shares held by the holder are to be redeemed, the number of shares of the First Citizens series C preferred stock to be redeemed from the holder; |
• | the redemption price, which will be equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends; and |
• | that dividends on the shares to be redeemed shall cease to accrue on the redemption date. |
• | authorize, create or issue, or increase the authorized amount of, shares of any class or series of stock ranking senior to the First Citizens series C preferred stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up of First Citizens, or issue any obligation or security convertible into or exchangeable for or evidencing the right to purchase, any such class or series of First Citizens’ capital stock; |
• | amend, alter or repeal the provisions of First Citizens’ charter, whether by merger, consolidation or otherwise, so as to materially and adversely affect the powers, preferences, privileges or rights of First Citizens series C preferred stock, taken as a whole; provided, however, that any amendment to authorize, create or issue, or increase the authorized amount of, any securities junior to or in parity with First Citizens series C preferred stock, or any securities convertible into or exchangeable for such junior or parity securities, will not be deemed to materially and adversely affect the powers, preferences, privileges or rights of First Citizens series C preferred stock; or |
• | consolidate with or merge into any other corporation, complete a binding share exchange or reclassification involving the First Citizens series C preferred stock or complete the sale, conveyance, exchange or transfer of all or substantially all of the assets or business of First Citizens unless, in any case, the shares of First Citizens series C preferred stock outstanding at the time of such consolidation or merger or sale either (i) remain outstanding or (ii) are converted into or exchanged for preference securities of the surviving entity or any entity controlling the surviving entity having such rights, preferences, privileges and powers (including voting powers), taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and powers (including voting powers) of the First Citizens series C preferred stock, taken as a whole. |
| | | First Citizens | | | CIT | | |
| Authorized and Outstanding Capital Stock: | | | First Citizens’ certificate of incorporation currently authorizes First Citizens to issue up to 16,000,000 shares of Class A common stock, par value $1.00 per share, 2,000,000 shares of Class B common stock, par value $1.00 per share and 10,000,000 shares of preferred stock, par value $0.01 per share. As of December 18, 2020, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, there were 8,811,220 shares of First Citizens Class A common stock outstanding, 1,005,185 shares of First Citizens Class B common stock outstanding and 345,000 shares of First Citizens series A preferred stock outstanding. | | | The CIT certificate currently authorizes CIT to issue up to 600,000,000 shares of common stock, par value $0.01 per share and 100,000,000 shares of preferred stock, par value $0.01 per share. As of December 18, 2020, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, there were 98,537,761 shares of CIT common stock outstanding, 325,000 shares of CIT series A preferred stock outstanding and 8,000,000 shares of CIT series B preferred stock outstanding. | |
| | | First Citizens | | | CIT | | |
| Preferred Stock: | | | The First Citizens board is authorized to provide for the issuance of preferred stock in one or more classes or series and to fix the rights, designations, and preferences related thereto, including, without limitation, the authority to provide that any such class or series may be: (i) subject to redemption at such time or times, on such conditions and at such price or prices, (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series of capital stock of First Citizens, (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, First Citizens, or (iv) convertible into, or exchangeable for, shares of the same or any other class or classes of stock, or of the same or any other series of stock, of First Citizens at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions adopted by the board. As of December 18, 2020, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, 345,000 shares of First Citizens series A preferred stock were outstanding. Upon completion of the mergers, First Citizens’ issued and outstanding preferred stock will also include shares of First Citizens series B preferred stock and First Citizens series C preferred stock issued in respect of CIT series A preferred stock and CIT series B preferred stock, respectively. | | | The CIT board is authorized to provide for the issuance of preferred stock in one or more classes or series and to fix the rights, designations, and preferences related thereto, including, without limitation, the authority to provide that any such class or series may be: (i) subject to redemption at such time or times and at such price or prices, (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series of capital stock of CIT, (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, CIT, or (iv) convertible into, or exchangeable for, shares of any other class or classes of stock, or of any other series of the same or any other class or classes of stock, or other securities or property, of CIT at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions adopted by the board. As of December 18, 2020, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, 325,000 shares of CIT series A preferred stock and 8,000,000 shares of CIT series B preferred stock were outstanding. Upon completion of the first step merger, each share of CIT series A preferred stock and CIT series B preferred stock issued and outstanding immediately prior to the effective time will be converted into the right to receive one (1) share of newly created First Citizens series B preferred stock and one (1) share of newly created First Citizens series C preferred stock, respectively, | |
| | | First Citizens | | | CIT | | |
| | | | | having such rights, preferences, privileges and voting powers, and limitations and restrictions, taken as a whole, that are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, and limitations and restrictions, taken as a whole, of the applicable series of outstanding CIT preferred stock (taking into account (i) that CIT will not be the surviving entity in the mergers and (ii) any adjustment to the existing right of optional redemption associated with each series of CIT preferred stock by First Citizens that is reasonably necessary to obtain Tier 1 Capital treatment from the Board of Governors of the Federal Reserve System for such preferred stock). | | ||
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| Voting Rights: | | | Holders of First Citizens Class A common stock are entitled to one (1) vote for each share on all matters with respect to which the holders of First Citizens common stock are entitled to vote and holders of First Citizens Class B common stock are entitled to sixteen (16) votes for each share on all matters with respect to which the holders of First Citizens common stock are entitled to vote. First Citizens stockholders do not have the right to cumulate their votes with respect to the election of directors. | | | Holders of CIT common stock are entitled to one (1) vote for each share on all matters with respect to which the holders of CIT common stock are entitled to vote. Holders of CIT series A preferred stock and holders of CIT series B preferred stock are entitled to one (1) vote for each share of stock on a limited number of matters set forth in the CIT series A preferred stock certificate of designation and CIT series B preferred stock certificate of designation, respectively, or as otherwise required by Delaware law. CIT stockholders do not have the right to cumulate their votes with respect to the election of directors. | |
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| Size of Board of Directors: | | | First Citizens’ bylaws currently provide that First Citizens’ board of directors will consist of not less than five (5) nor more than thirty (30) directors, with the exact number within the range to be determined by the First Citizens board of directors. First Citizens’ board of directors currently has eleven (11) directors. | | | The CIT bylaws currently provide that CIT’s board of directors will consist of not less than three (3) nor more than fifteen (15) directors, with the exact number within the range to be determined by the affirmative vote of a majority of CIT’s board of directors. CIT’s board of directors currently has twelve (12) directors. | |
| | | First Citizens | | | CIT | | |
| | | Following the completion of the mergers, the certificates of designations for the First Citizens series B preferred stock and First Citizens series C preferred stock will provide that the size of the First Citizens board of directors will automatically increase by two (2) additional directors (the “First Citizens preferred stock directors”) if dividends payable on the First Citizens series B preferred stock and First Citizens series C preferred stock have not been paid pursuant to the terms of the First Citizens series B preferred stock and First Citizens series C preferred stock certificate of designations in an aggregate amount equal to full dividends for six (6) or more quarterly dividend periods, whether or not consecutive. The First Citizens series B preferred stock and First Citizens series C certificates of designations will further provide that the right of holders of First Citizens series B preferred stock and First Citizens series C preferred stock to elect the First Citizens preferred stock directors will terminate once dividends have been paid in full for at least four consecutive quarterly dividend periods, and the size of the First Citizens board of directors will be reduced accordingly. | | | The CIT series A preferred stock certificate of designation and the CIT series B preferred stock certificate of designation provide that the size of the CIT board of directors will automatically increase by two (2) additional directors (the “CIT preferred stock directors”) if dividends payable on the CIT series A preferred stock or on the CIT series B preferred stock have not been paid pursuant to the terms of the CIT series A preferred stock certificate of designation or the CIT series B preferred stock certificate of designation, as applicable, in an aggregate amount equal to dividends for eighteen (18) months, whether or not consecutive. The CIT series A preferred stock certificate of designation and the CIT series B preferred stock certificate of designation further provide that the right of holders of CIT series A preferred stock and CIT series B preferred stock to elect the CIT preferred stock directors will terminate once dividends have been paid in full for at least twelve (12) months to the holders of CIT series A preferred stock or CIT series B preferred stock, as applicable, and the size of the CIT board of directors will be reduced accordingly. | | |
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| Classes of Directors | | | First Citizens’ charter does not separate the directors into classes with staggered, multi-year terms of office. Instead, directors are elected to one (1)-year terms. | | | The CIT certificate does not separate the directors into classes with staggered, multi-year terms of office. Instead, directors are elected to one (1)-year terms. | |
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| Election of Directors: | | | First Citizens stockholders do not have the right to cumulate their votes with respect to the election of directors. The persons who receive the highest number of votes cast at the First Citizens annual meeting of stockholders by holders of the First Citizens | | | CIT stockholders do not have the right to cumulate their votes with respect to the election of directors. Any nominee who receives a greater number of votes cast “for” than votes cast “against” such person’s election will be elected to the CIT board of directors. | |
| | | First Citizens | | | CIT | | |
| | | Class A common stock and the First Citizens Class B common stock, voting together, will be deemed to be elected. | | | | ||
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| Vacancies on the Board of Directors: | | | First Citizens’ bylaws provide that vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority vote of the First Citizens directors then in office, though less than a quorum, or by a sole remaining director, and such directors hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole board of directors (as constituted immediately prior to any such increase), the Delaware Court of Chancery may, upon application of any stockholder or stockholders owning at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office. Following the completion of the mergers, with respect to the First Citizens preferred stock directors, if any, the First Citizens series B preferred stock and First Citizens series C preferred stock certificates of designations will provide that in the case any vacancy occurs among the First Citizens preferred stock directors, a successor director will be elected by the then remaining First Citizens preferred | | | The CIT bylaws provide that vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by the affirmative vote of a majority of the remaining CIT directors, though less than a quorum, or by the sole remaining director, as the case may be, and such directors shall hold office until the next annual meeting of stockholders and until their successors are duly elected and qualified, subject to their prior death, resignation, retirement, disqualification or removal from office. With respect to the CIT preferred stock directors, if any, the CIT series A preferred stock certificate of designation and the CIT series B preferred stock certificate of designation provide that in case any vacancy occurs among the CIT preferred stock directors for any reason other than removal, the remaining CIT preferred stock director may choose, by means of written consent, a successor who will hold office for the unexpired term in respect of which such vacancy occurred, or if none remains in office, by a vote of the holders of a majority of the outstanding shares of CIT series A preferred stock or CIT series B preferred stock, as applicable, (and any other series of preferred stock of CIT upon which similar voting rights have been conferred, voting together as a class based on respective liquidation preferences). | |
| | | First Citizens | | | CIT | | |
| | | stock director or, if no First Citizens preferred stock director remains in office, by a plurality of the votes cast by the holders of the First Citizens series B preferred stock and First Citizens series C preferred stock (and any other series or class of preferred stock of First Citizens upon which similar voting rights have been conferred). | | | | ||
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| Removal of Directors: | | | Under First Citizens’ bylaws, any First Citizens director may be removed from office, with or without cause, if a majority of the total votes entitled to be cast by holders of First Citizens stock at an election of directors are cast in favor of the director’s removal. Following the completion of the mergers, with respect to the First Citizens preferred stock directors, if any, the statement of designations for the First Citizens series B preferred and First Citizens series C preferred stock will provide that any First Citizens preferred stock director may be removed at any time without cause by the holders of First Citizens series B preferred stock and First Citizens series A preferred stock (and any other series or class of preferred stock of First Citizens upon which similar voting rights have been conferred) representing at least a majority of the combined liquidation preference of the preferred stock then outstanding. For certain additional bylaw provisions that will govern the board of directors of the combined company following the mergers, see the section entitled “The Mergers—Governance of the Combined Company After the Mergers” beginning on page 125. | | | Under the CIT bylaws, any CIT director may be removed from office, with or without cause, by the holders of a simple majority of the voting power of the outstanding shares of CIT voting stock, voting together as one class. Any CIT preferred stock director may be removed at any time, with or without cause, by a majority of the outstanding shares of CIT series A preferred stock or CIT series B preferred stock, as applicable (and any other series of preferred stock of CIT upon which similar voting rights have been conferred, voting together as a class based on respective liquidation preferences). | |
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| Amendments to Organizational Documents: | | | The DGCL provides that the First Citizens charter generally may be amended if the First Citizens board of directors adopts a resolution setting forth the proposed | | | The DGCL provides that the CIT certificate generally may be amended if the CIT board of directors adopts a resolution setting forth the proposed amendment and | |
| | | First Citizens | | | CIT | | |
| | | amendment and either calling a special meeting of stockholders for the consideration of the amendment or directing that the amendment be considered at the next annual meeting of stockholders, and if (i) a majority of the total votes entitled to be cast by holders of outstanding First Citizens shares entitled to vote thereon, and (ii) a majority of the total votes entitled to be cast by holders of outstanding shares of each class, if any, entitled to vote thereon as a class, in each case are cast in favor of the amendment. The holders of the outstanding shares of a class shall be entitled to vote as a class upon a proposed amendment, whether or not entitled to vote thereon by the First Citizens charter, if the amendment would increase or decrease the aggregate number of authorized shares or par value of such class, or alter or change the powers, preferences, or special rights of the shares of such class so as to affect them adversely. However, under the First Citizens charter, an amendment to increase or decrease the number of authorized shares of the First Citizens preferred stock may be approved by the affirmative vote of the holders of a majority in voting power of First Citizens stock entitled to vote thereon without the vote of the holders of any of the First Citizens preferred stock voting separately as a class. The First Citizens charter provides that the First Citizens board of directors shall have the power to make, adopt, alter, amend and repeal bylaws from time to time, subject to the rights of the First Citizens stockholders entitled to vote with respect thereto to alter or repeal bylaws made by the board of directors. First Citizens’ bylaws provide that the bylaws may be altered, amended or repealed and new bylaws may be adopted at any regular meeting of | | | either calling a special meeting of stockholders for the consideration of the amendment or directing that the amendment be considered at the next annual meeting of stockholders, and if (i) a majority of the total votes entitled to be cast by holders of outstanding CIT shares entitled to vote thereon, and (ii) a majority of the total votes entitled to be cast by holders of outstanding shares of each class, if any, entitled to vote thereon as a class, in each case are cast in favor of the amendment. The holders of the outstanding shares of a class shall be entitled to vote as a class upon a proposed amendment, whether or not entitled to vote thereon by the CIT charter, if the amendment would increase or decrease the aggregate number of authorized shares or par value of such class, or alter or change the powers, preferences, or special rights of the shares of such class so as to affect them adversely. In addition to the requirements under the DGCL, the CIT certificate provides that any amendment or repeal of the articles regarding the personal liability of directors and indemnification of directors and officers shall not adversely affect any right or protection existing thereunder. The CIT certificate further provides that the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of the then-outstanding CIT voting stock, voting together as one class, is required to amend, repeal or adopt any provision inconsistent with the provisions of the CIT certificate regarding (i) the authority of the CIT board of director to adopt, amend or repeal the CIT bylaws, (ii) size, election, and removal of, and vacancies on, the board of directors, (iii) stockholder action, (iv) advance notice, and (v) this voting standard. | |
| | | First Citizens | | | CIT | | |
| | | the First Citizens board of directors or the First Citizens stockholders, or at any special meeting of the First Citizens board of directors or First Citizens stockholders if notice of such alteration, amendment, repeal or adoption is contained in the notice of said special meeting. Amendment of the bylaws by the directors at a meeting at which a quorum is present would require the vote of a majority of directors present. Approval of an amendment of the bylaws by stockholders would require that a majority of the total votes entitled to be cast by holders of First Citizens shares represented at the meeting, in person or by proxy, and entitled to be voted thereon, be cast in favor of the bylaw amendment. | | | Amendment of the bylaws requires (i) the affirmative vote of a majority of the entire CIT board of directors (without a vote of the CIT stockholders) at any meeting of the CIT board of directors, provided that any alteration, amendment or repeal of bylaws in conflict with the bylaw provisions regarding removal of directors or amendment of the CIT bylaws must be adopted by a sixty-six and two-thirds percent (66 2/3%) vote of the entire CIT board of directors, or (ii) the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of the outstanding shares of CIT voting stock, voting together as a single class. | | |
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| Stockholder Action by Written Consent: | | | Consistent with Section 228 of the DGCL, the First Citizens bylaws provide that First Citizens’ stockholders may act without a stockholder meeting by written consent, without prior notice and without a vote. Such consent must set forth the action so taken and be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent must be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to | | | The CIT certificate provides that any action required or permitted to be taken by the CIT stockholders must be effected at a duly called annual or special meeting of the CIT stockholders and may not be affected by any consent in writing in lieu of such meeting. | |
| | | First Citizens | | | CIT | | |
| | | take the action were delivered to First Citizens. | | | | ||
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| Special Meetings of Stockholders: | | | First Citizens’ bylaws provide that special meetings of the First Citizens stockholders may be called at any time by the board of directors, the chairman of the board, the chief executive officer, the president, or the secretary, and must be called by any of them at the request in writing of a majority of the board of directors. | | | Special meetings of the CIT stockholders may be called at any time by the chair of the CIT board of directors, the secretary of CIT at the request in writing of stockholders holding at least twenty-five percent (25%) of the voting power of the issued and outstanding CIT common stock entitled to vote generally for the election of directors or the CIT board of directors. | |
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| Record Date | | | Under the First Citizens bylaws, the First Citizens board of directors may fix a record date, which record date may not be more than sixty (60) or less than ten (10) days before the date of the annual or special meeting, unless otherwise required by applicable law. | | | Under the CIT bylaws, the CIT board of directors may fix a record date, which record date may not be (i) more than sixty (60) or less than ten (10) days before the date of the annual or special meeting, (ii) more than ten (10) days after the date on which the CIT board of directors, by resolution, fixes a record date for any consent in writing, and (iii) more than sixty (60) days prior to any other action. | |
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| Quorum | | | Under First Citizens’ bylaws, the presence at a meeting of stockholders, in person or by proxy, of the holders of shares representing a majority of the total votes entitled to be cast by holders of outstanding First Citizens shares that may be voted at the meeting will constitute a quorum for the transaction of business, except as otherwise provided by the DGCL. | | | Under the CIT bylaws, the presence at a meeting of stockholders, in person or by proxy, of the holders of a majority of the voting power of the outstanding CIT shares entitled to vote generally in the election of directors, will constitute a quorum at a meeting of stockholders, except that when specified business is to be voted on by a class or series voting as a class, the holders of a majority of the voting power of the shares of such class or series will constitute a quorum for the transaction of business. | |
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| Notice of Stockholder Actions/Meetings: | | | First Citizens’ bylaws provide that written notice stating the time and place of any meeting of stockholders and, in case of a special meeting, the purpose or purposes for which the meeting is | | | The CIT bylaws provide that written notice stating the place, day and hour of the meeting of stockholders and, in the case of a special meeting, the purpose or purposes for which the meeting is | |
| | | First Citizens | | | CIT | | |
| | | called, must be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at the meeting as of the record date for determining the stockholders entitled to notice of the meeting. | | | called, must be prepared and delivered by CIT not less than ten (10) days nor more than sixty (60) days before the date of the meeting, either personally, or by mail, or to the extent and in the manner permitted by applicable law. | | |
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| Advance Notice Requirements for Stockholder Nominations and Other Proposals: | | | The First Citizens bylaws provide that a notice of a stockholder to make a nomination of a person for election as a director or to bring a proposal relating to other matters before a meeting shall be made in writing and received by the Secretary of First Citizens in the event of an annual meeting of the stockholders, not more than one-hundred twenty (120) days and not less than forty five (45) days in advance of the first anniversary date of the date that proxy statements were first mailed to stockholders in conjunction with the preceding year’s annual meeting; provided that, in the event that the annual meeting is called on a date that is not within thirty (30) days before or seventy (70) days after such anniversary date of the preceding year’s annual meeting, notice by the stockholder must be delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the corporation. In the event of a special meeting of the stockholders, such notice shall be received by the Secretary of First Citizens not earlier than the close of business on the one hundred twentieth (120th) day nor later than the close of business on the ninetieth (90th) day prior to such special meeting or the 10th day following the day on which public | | | The CIT bylaws provide that a notice of a stockholder to make a nomination of a person for election as a director or to bring a proposal relating to other matters before CIT’s annual meeting of stockholders must be delivered to or be mailed and received at CIT’s principal executive offices not more than one hundred and twenty (120) days and not less than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting; provided that, in the event that the annual meeting is called on a date that is not within twenty-five (25) days before or after such anniversary date, notice by the stockholder must be received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such public announcement of the date of the annual meeting was made, whichever occurs first. In the event of a special meeting of the stockholders called for the purpose of electing directors, a notice of a stockholder to make a nomination of a person for election as a director must be delivered to or be mailed and received at CIT’s principal executive offices not later than the close of business on the tenth (10th) day on which notice of the date of the special meeting was mailed or public announcement of the date of the special meeting was made, whichever occurs first. | |
| | | First Citizens | | | CIT | | |
| | | announcement is first made of the date of the special meeting. | | | | ||
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| | | Every notice by a stockholder must set forth (i) the name and address of the First Citizens stockholder that intends to make a nomination or bring up any other matter, (ii) the class or series and number of shares of capital stock of First Citizens which are owned beneficially and of record by such stockholder ad such beneficial owner, (iii) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging mergers, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice, (iv) a representation that the stockholder is a holder of record of First Citizens stock entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination, and (v) certain other requirements set forth in the First Citizens bylaws. | | | Every notice by a stockholder must set forth, as to such stockholder and the beneficial owner, if any, on whose behalf the proposal is being made, (i) the name and address of such person, (ii) the class or series and number of all shares of stock of CIT which are owned beneficially or of record by such person and any affiliates or associates of such person, (iii) a description of any transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of CIT’s stock) that has been made by or on behalf of such person or any affiliates or associates of such person, (iv) a description of all agreements, arrangements or understandings between or among such person, or any affiliates or associates of such person, and any other persons in connection with the proposal of such business and any material interest of the foregoing persons in such business, (v) a representation that the stockholder intends to appear in person or by proxy at the meeting to bring such business, and (v) certain other requirements set forth in the CIT bylaws. | | |
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| Proxy Access: | | | The First Citizens’ bylaws do not provide for proxy access. | | | The CIT bylaws permit a stockholder, or a group of up to 20 stockholders, who have maintained continuous ownership of three percent (3%) or more of the outstanding shares of CIT common stock for at least the previous three (3) years (as of the date the notice of nomination is submitted to CIT and through the meeting date) to nominate and include in CIT’s annual meeting proxy materials director nominees constituting up to the greater of two individuals or twenty percent (20%) of the CIT board of directors, provided that the stockholder(s) and the nominee(s) | |
| | | First Citizens | | | CIT | | |
| | | | | satisfy the requirements specified in the CIT bylaws and CIT receives notice of such nominations as required under the CIT bylaws. The CIT bylaws provide that each stockholder seeking to include a director nominee in CIT’s proxy materials is required to provide CIT with certain information and undertakings specified in the CIT bylaws. | | ||
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| Limitation of Liability of Directors and Officers: | | | The First Citizens charter provides that no director shall be personally liable to First Citizens or its stockholders for monetary damages for breach of fiduciary duty as a director for any act or omission, except that a director may be liable (i) for any breach of the director’s duty of loyalty to First Citizens or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. | | | The CIT certificate provides that no director shall be personally liable to CIT or its stockholders for monetary damages for breach of fiduciary duty as a director, except (i) for liability under Section 174 of the DGCL, or (ii) for liability, subject to any and all other requirements for liability, (a) for any breach of such director’s duty of loyalty to CIT or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or (c) for any transaction from which the director derived an improper personal benefit. | |
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| Indemnification of Directors and Officers: | | | The First Citizens charter provides that First Citizens shall, to the full extent permitted by Section 145 of the DGCL, indemnify all persons whom it may indemnify pursuant thereto. First Citizens’ bylaws further provide that First Citizens will indemnify and hold harmless, to the fullest extent permitted by applicable law, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director, officer, or employee of First Citizens or, while a director, officer, or employee of First Citizens, is or was serving at the request of First Citizens as a | | | The CIT certificate provides that CIT will, to the fullest extent permitted by the DGCL or any other applicable law, indemnify each person who is or was a director or officer of CIT. The CIT bylaws further provide that CIT will indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer, employee or agent of CIT, or is or was serving at the request of CIT as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by | |
| | | First Citizens | | | CIT | | |
| | | director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees, judgments, fines, taxes, including under the Employee Retirement Income Security Act of 1974, as amended (ERISA), excise taxes, or penalties, and amounts paid in settlement) reasonably incurred by such person. Such indemnification will continue as to any person who has ceased to be such a director, officer, employee, or agent and inure to the benefit or his or her heirs, executors, and administrators. First Citizens’ bylaws also provide that First Citizens will, to the fullest extent not prohibited by applicable law, advance expenses (including attorneys’ fees) incurred by any of the foregoing persons in defending any proceeding upon receipt of an undertaking by such person to repay all amounts advanced if it should be ultimately determined that he or she is not entitled to be indemnified. The bylaw provision does not limit the right of First Citizens, to the extent and in the manner permitted by law, to indemnify and to advance expenses to other persons when and as authorized by appropriate corporate action. | | | such person if such person acts in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of CIT and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. CIT will also indemnify any person who was or is a party or is threatened to be made a party to any action or suit by or in the right of CIT to procure a judgment in its favor by reason of the fact that he or she is or was a director, officer, employee or agent of CIT, or is or was serving at the request of CIT as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against all expenses actually and reasonably incurred in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of CIT. Except for proceedings to enforce the rights to indemnification, CIT will not be obligated to indemnify any person in connection with a proceeding unless such proceeding was authorized or consented to by the CIT board of directors. The bylaw provision does not limit the right of CIT, to the extent and in the manner permitted by law, to indemnify and to advance expenses to other persons when and as authorized by appropriate corporate action. | | |
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| Anti-Takeover Provisions: | | | Section 203 of the DGCL prohibits First Citizens, as a Delaware corporation, from engaging in a “business combination” (as defined under the DGCL) with an “interested stockholder” for a period of three (3) years following the time an interested stockholder becomes | | | Section 203 of the DGCL prohibits CIT, as a Delaware corporation, from engaging in a “business combination” (as defined under the DGCL) with an “interested stockholder” for a period of three (3) years following the time an interested stockholder becomes such, | |
| | | First Citizens | | | CIT | | |
| | | such, unless: (i) prior to such time the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; (ii) the transaction in which an interested stockholder became an interested stockholder resulted in the stockholder owning more than eighty-five percent (85%) of the corporation’s voting stock (subject to certain exclusions); or (iii) at or subsequent to the time the business combination is approved by the board of directors and authorized at any annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds (2/3) of the outstanding voting stock not owned by the interested stockholder. Under Section 203 of the DGCL, “business combination” means, among other things, (i) merger or consolidation with an interested stockholder, (ii) sale, exchange or other disposition to or with an interested stockholder of ten percent (10%) or more of the aggregate market value of either the assets on a consolidated basis or the outstanding stock of the corporation and (iii) any receipt by an interested stockholder of financial benefits (except proportionately as a shareholder) by or through the corporation other than those expressly permitted by Delaware law. Holding company mergers authorized by Section 251(g) of Delaware law are excluded from the definition of “business combination”. “Interested stockholder” is generally defined under Section 203 of the DGCL as any person or an affiliate of any such person (other than the corporation or any of its majority-owned subsidiaries) that beneficially (a) owns fifteen percent (15%) or more of the outstanding voting stock of the corporation or (b) owned fifteen percent (15%) or | | | unless: (i) prior to such time the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; (ii) the transaction in which an interested stockholder became an interested stockholder resulted in the stockholder owning more than eighty-five percent (85%) of the corporation’s voting stock (subject to certain exclusions); or (iii) at or subsequent to the time the business combination is approved by the board of directors and authorized at any annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds (2/3) of the outstanding voting stock not owned by the interested stockholder. Under Section 203 of the DGCL, “business combination” means, among other things, (i) merger or consolidation with an interested stockholder, (ii) sale, exchange or other disposition to or with an interested stockholder of ten percent (10%) or more of the aggregate market value of either the assets on a consolidated basis or the outstanding stock of the corporation and (iii) any receipt by an interested stockholder of financial benefits (except proportionately as a shareholder) by or through the corporation other than those expressly permitted by Delaware law. Holding company mergers authorized by Section 251(g) of Delaware law are excluded from the definition of “business combination”. “Interested stockholder” is generally defined under Section 203 of the DGCL as any person or an affiliate of any such person (other than the corporation or any of its majority-owned subsidiaries) that beneficially (a) owns fifteen percent (15%) or more of the outstanding voting stock of the corporation or (b) owned fifteen percent (15%) or | |
| | | First Citizens | | | CIT | | |
| | | more of the outstanding voting stock of the corporation at any time within the three (3) year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder, subject to certain exceptions. Section 203 of the DGCL applies to all Delaware corporations that have not expressly opted out of its provisions in their certificate of incorporation. First Citizens has not explicitly opted out of Section 203 of the DGCL in the First Citizens certificate of incorporation. | | | more of the outstanding voting stock of the corporation at any time within the three (3) year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder, subject to certain exceptions. Section 203 of the DGCL applies to all Delaware corporations that have not expressly opted out of its provisions in their certificate of incorporation. CIT has not explicitly opted out of Section 203 of the DGCL in the CIT certificate. | | |
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| Rights of Dissenting Stockholders: | | | Section 262 of the DGCL provides that a stockholder of a Delaware corporation may receive payment of the fair value of his or her stock if the stockholder dissents from certain major corporate mergers, including a proposed merger or consolidation. However, dissenters’ rights generally are not available to holders of a class of shares of capital stock either listed on a national securities exchange or held of record by more than 2,000 holders. Notwithstanding the foregoing, appraisal rights are available for shares of any class or series of stock if the holders thereof are required by the terms of a merger agreement to accept for such stock anything except (i) shares or depository receipts of any other corporation which at the effective date of the mergers will be either listed on a national securities exchange or held of record by more than 2,000 holders, (ii) shares of stock or depositary receipts of the surviving corporation in the mergers, (iii) cash in lieu of fractional shares or fractional depository receipts or (iv) any combination of (i), (ii) or (iii). | | | Section 262 of the DGCL provides that a stockholder of a Delaware corporation may receive payment of the fair value of his or her stock if the stockholder dissents from certain major corporate mergers, including a proposed merger or consolidation. However, dissenters’ rights generally are not available to holders of a class of shares of capital stock either listed on a national securities exchange or held of record by more than 2,000 holders. Notwithstanding the foregoing, appraisal rights are available for shares of any class or series of stock if the holders thereof are required by the terms of a merger agreement to accept for such stock anything except (i) shares or depository receipts of any other corporation which at the effective date of the mergers will be either listed on a national securities exchange or held of record by more than 2,000 holders, (ii) shares of stock or depositary receipts of the surviving corporation in the mergers, (iii) cash in lieu of fractional shares or fractional depository receipts or (iv) any combination of (i), (ii) or (iii). | |
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| Stockholder Rights Plan: | | | First Citizens does not currently have a stockholder rights plan in effect. | | | CIT does not currently have a stockholder rights plan in effect. | |
First Citizens filings (SEC File No. 001-16715) | | | Periods Covered or Date of Filing with the SEC |
Annual Report on Form 10-K | | | Fiscal year ended December 31, 2019, filed February 26, 2020, including the portions of the Definitive Proxy Statement on Schedule 14A, filed with the SEC on February 26, 2020, incorporated by reference therein |
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Quarterly Reports on Form 10-Q | | | |
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Current Reports on Form 8-K | | | Filed January 2, 2020, January 28, 2020, February 3, 2020, February 7, 2020, March 4, 2020, March 6, 2020, March 12, 2020, April 20, 2020, May 1, 2020, June 11, 2020, October 16, 2020, October 20, 2020 and November 17, 2020 (other than the portions of those documents not deemed to be filed) |
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The description of First Citizens’ common stock contained in First Citizens’ Current Report on Form 8-K/A filed with the SEC, including all amendments and reports filed with the SEC for purposes of updating such description | | | Filed on July 13, 1990 (filed in paper format), as updated by Exhibit 4.3 to First Citizens’ Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 26, 2020 |
CIT filings (SEC File No. 001-31369) | | | Periods |
Annual Report on Form 10-K | | | Fiscal year ended December 31, 2019, filed February 20, 2020, including the portions of the Definitive Proxy Statement on Schedule 14A, filed with the SEC on April 2, 2020, incorporated by reference therein |
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Quarterly Reports on Form 10-Q | | | |
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Current Reports on Form 8-K | | | Filed January 2, 2020, January 22, 2020, April 16, 2020, May 1, 2020, May 13, 2020, May 26, 2020, June 16, 2020, June 19, 2020, July 17, 2020, October 15, 2020, October 16, 2020 and October 20, 2020 (other than the portions of those documents not deemed to be filed) |
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The description of CIT’s common stock contained in CIT’s Registration Statement on Form 8-A filed with the SEC | | | |
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The description of CIT’s series B preferred stock contained in CIT’s Registration Statement on Form 8-A filed with the SEC | | | |
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The description of CIT’s series A preferred stock contained in CIT’s Form 8-K filed with the SEC | | |
if you are an First Citizens stockholder: First Citizens BancShares, Inc. 4300 Six Forks Road Raleigh, North Carolina 27609 (919) 716-7000 Attn: Tom Heath, Vice President and Investor Relations Officer | | | if you are a CIT stockholder: CIT Group Inc. One CIT Drive Livingston, New Jersey 07039 (866) 542-4847 Attn: Barbara Callahan SVP and Head of Investor Relations |
ARTICLE I | ||||||
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THE MERGER | ||||||
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ARTICLE II | ||||||
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EXCHANGE OF SHARES | ||||||
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ARTICLE III | ||||||
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REPRESENTATIONS AND WARRANTIES OF CIT | ||||||
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ARTICLE IV | ||||||
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REPRESENTATIONS AND WARRANTIES OF THE BANCSHARES PARTIES | ||||||
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ARTICLE V | ||||||
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COVENANTS RELATING TO CONDUCT OF BUSINESS | ||||||
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ARTICLE VI | ||||||
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ADDITIONAL AGREEMENTS | ||||||
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ARTICLE VII | ||||||
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CONDITIONS PRECEDENT | ||||||
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ARTICLE VIII | ||||||
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TERMINATION AND AMENDMENT | ||||||
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ARTICLE IX | ||||||
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GENERAL PROVISIONS | ||||||
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(a) | | | if to CIT, to: | |||
| | | | |||
| | CIT Group Inc. | ||||
| | 1 CIT Drive | ||||
| | Livingston, NJ 07039 | ||||
| | Attention: | | | James R. Hubbard, General Counsel | |
| | Telephone: | | | (973) 740-5000 | |
| | Facsimile: | | | (866) 451-4408 | |
| | Email: | | | James.Hubbard@cit.com | |
| | | | |||
| | With a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | Sullivan & Cromwell LLP | ||||
| | 125 Broad Street | ||||
| | New York, New York 10004 | ||||
| | Attention: | | | H. Rodgin Cohen | |
| | | | Mitchell S. Eitel | ||
| | Facsimile: | | | (212) 558-3588 | |
| | Email: | | | cohenhr@sullcrom.com | |
| | | | eitelm@sullcrom.com | ||
| | | | |||
and | | | | | ||
| | | | |||
(b) | | | if to BancShares, FCB or Merger Sub, to: | |||
| | | | |||
| | First Citizens BancShares, Inc. | ||||
| | First-Citizens Bank & Trust Company | ||||
| | FC Merger Subsidiary IX, Inc. | ||||
| | 4300 Six Forks Road | ||||
| | Raleigh, North Carolina 27609 | ||||
| | Attention: | | | Craig L. Nix | |
| | E-mail: | | | craig.nix@firstcitizens.com | |
| | | | |||
| | With a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. | ||||
| | 150 Fayetteville Street, Suite 2300 | ||||
| | Raleigh, North Carolina 27601 | ||||
| | Attention: | | | Gerald F. Roach | |
| | E-mail: | | | groach@smithlaw.com |
| | CIT GROUP INC. | |||||||
| | | | | |||||
| | By: | | | /s/ Ellen R. Alemany | ||||
| | | | Name: | | | Ellen R. Alemany | ||
| | | | Title: | | | Chairwoman & Chief Executive Officer |
| | | |||||||
| | FIRST CITIZENS BANCSHARES, INC. | |||||||
| | | | | | ||||
| | By: | | | /s/ Peter M. Bristow | ||||
| | | | Name: | | | Peter M. Bristow | ||
| | | | Title: | | | President |
| | FIRST-CITIZENS BANK & TRUST COMPANY | |||||||
| | | | | | ||||
| | By: | | | /s/ Craig L. Nix | ||||
| | | | Name: | | | Craig L. Nix | ||
| | | | Title: | | | CFO |
| | FC MERGER SUBSIDIARY IX, INC. | |||||||
| | | | | |||||
: | | | By: | | | /s/ Bridget L. Welborn | |||
| | | | Name: | | | Bridget L. Welborn | ||
| | | | Title: | | | Secretary |
| | (i) if to CIT to: | ||||
| | |||||
| | CIT Group Inc. | ||||
| | 1 CIT Drive | ||||
| | Livingston, NJ 07039 | ||||
| | Attention: | | | James R. Hubbard, General Counsel | |
| | E-mail: | | | James.Hubbard@cit.com | |
| | | | |||
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | Sullivan & Cromwell LLP | ||||
| | 125 Broad Street | ||||
| | New York, New York 10004 | ||||
| | Attention: | | | H. Rodgin Cohen | |
| | | | Mitchell S. Eitel | ||
| | Facsimile: | | | (212) 558-3588 | |
| | Email: | | | cohenhr@sullcrom.com | |
| | | | eitelm@sullcrom.com | ||
| | |||||
| | and | | | ||
| | | | |||
| | (ii) if to any Stockholder, addressed to it at the address set forth below such Stockholder’s signature hereto: | ||||
| | | | |||
| | In each case, with copies, which shall not constitute notice, to: | ||||
| | | | |||
| | First Citizens BancShares, Inc. | ||||
| | 4300 Six Forks Road | ||||
| | Raleigh, North Carolina 27609 | ||||
| | Attention: | | | Craig L. Nix | |
| | E-mail: | | | craig.nix@firstcitizens.com | |
| | | | |||
| | Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. | ||||
| | 150 Fayetteville Street, Suite 2300 | ||||
| | Raleigh, North Carolina 27601 | ||||
| | Attention: | | | Gerald F. Roach | |
| | E-mail: | | | groach@smithlaw.com |
| | CIT Group Inc. | |||||||
| | | | | | ||||
| | By: | | | /s/ Ellen R. Alemany | ||||
| | | | Name: | | | Ellen R. Alemany | ||
| | | | Title: | | | Chairwoman & Chief Executive Officer |
| | /s/ Frank B. Holding, Jr. | |
| | Name: Frank B. Holding, Jr. | |
| | ||
| | Address: | |
| | 4300 Six Forks Road | |
| | Raleigh, NC 27609 |
| | /s/ Hope H. Bryant | |
| | Name: Hope H. Bryant | |
| | ||
| | Address: | |
| | 4300 Six Forks Road | |
| | Raleigh, NC 27609 |
| | /s/ Peter M. Bristow | |
| | Name: Peter M. Bristow | |
| | ||
| | Address: | |
| | 4300 Six Forks Road | |
| | Raleigh, NC 27609 | |
| | ||
| | /s/ Claire H. Bristow | |
| | Name: Claire H. Bristow | |
| | ||
| | Address: | |
| | P.O. Box 1417 | |
| | Smithfield, NC 27577 |
| Stockholder | | | Class A Common Shares Beneficially Owned | | | Class B Common Shares Beneficially Owned | | | Total Voting Power of Shares Beneficially Owned | | | % of Total Voting Power | |
| Frank B. Holding, Jr. | | | 570,349 | | | 145,738 | | | 2,902,157 | | | 11.66% | |
| Hope Holding Bryant | | | 498,505 | | | 102,405 | | | 2,136,985 | | | 8.58% | |
| Peter M. Bristow | | | 90,891 | | | 26,448 | | | 514,059 | | | 2.06% | |
| Claire Holding Bristow | | | 410,685 | | | 85,200 | | | 1,773.885 | | | 7.13% | |
| Total | | | 1,570,430 | | | 359,791 | | | 7,327,086 | | | 29.43% | |
1) | Reviewed certain publicly available financial statements and other business and financial information of CIT and First Citizens, respectively; |
2) | Reviewed certain internal financial statements and other financial and operating data concerning CIT and First Citizens, respectively; |
3) | Reviewed certain financial projections prepared or furnished to us by the managements of CIT and First Citizens, respectively; |
4) | Reviewed information relating to certain strategic, financial and operational benefits anticipated from the Merger, prepared by the managements of CIT and First Citizens, respectively; |
5) | Discussed the past and current operations and financial condition and the prospects of CIT, including information relating to certain strategic, financial and operational benefits anticipated from the Merger, with senior executives of CIT; |
6) | Discussed the past and current operations and financial condition and the prospects of First Citizens, including information relating to certain strategic, financial and operational benefits anticipated from the Merger, with senior executives of First Citizens; |
7) | Reviewed the pro forma impact of the Merger on First Citizens’ earnings per share, cash flow, consolidated capitalization and certain financial ratios; |
8) | Reviewed the reported prices and trading activity for CIT Common Stock and First Citizens Common Stock; |
9) | Compared the financial performance of CIT and First Citizens and the prices and trading activity of CIT Common Stock and First Citizens Common Stock with that of certain other publicly-traded companies comparable with CIT and First Citizens, respectively, and their securities; |
10) | Participated in certain discussions and negotiations among representatives of CIT and First Citizens and certain parties and their financial and legal advisors; |
11) | Reviewed certain consultants’ reports relating to the assets of CIT and First Citizens prepared by the consultants to CIT and First Citizens (the “Consultant Reports”); |
12) | Reviewed the Merger Agreement and certain related documents; and |
13) | Performed such other analyses, reviewed such other information and considered such other factors as we have deemed appropriate. |
| | Very truly yours, | ||||
| | | | |||
| | MORGAN STANLEY & CO. LLC | ||||
| | | | |||
| | By: | | | /s/ John Esposito | |
| | | | John Esposito | ||
| | | | Managing Director |
Item 20. | Indemnification of Directors and Officers |
Item 21. | Exhibits and Financial Statement Schedules |
(a) | The following exhibits are filed herewith or incorporated herein by reference: |
Exhibit No. | | | Description |
| | Agreement and Plan of Merger, dated as of October 15, 2020, by and among CIT Group Inc., First Citizens BancShares, Inc., FC Merger Subsidiary IX, Inc., CIT Bank, N.A. and First-Citizens Bank & Trust Company (attached as Annex A to the joint proxy statement/prospectus forming a part of this Registration Statement) | |
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Exhibit No. | | | Description |
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** | Previously filed. |
Item 22. | Undertakings |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
(ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) | That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of securities, in a primary offering of securities of the undersigned |
(5) | That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(6) | That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(7) | That every prospectus (i) that is filed pursuant to paragraph (5) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(8) | To respond to requests for information that is incorporated by reference into this prospectus pursuant to Items 4, 10(b), 11, or 13 of this form, within one (1) business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means; this includes information contained in documents filed subsequent to the effective date of this registration statement through the date of responding to the request. |
(9) | To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in this registration statement when it became effective. |
(10) | Insofar as indemnification for liabilities under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable. In the event a claim of indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in a successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. |
| | FIRST CITIZENS BANCSHARES, INC. | ||||
| | | | |||
| | By: | | | /s/ Frank B. Holding, Jr. | |
| | Name: | | | Frank B. Holding, Jr. | |
| | Title: | | | Chairman and Chief Executive Officer |
Signature | | | Title |
/s/ Frank B. Holding, Jr. | | | Chairman and Chief Executive Officer; Director (Principal executive officer) |
(Frank B. Holding, Jr.) | | ||
| | ||
/s/ Craig L. Nix | | | Chief Financial Officer (Principal financial officer and principal accounting officer) |
(Craig L. Nix) | | ||
| | ||
* | | | Director |
(John M. Alexander, Jr.) | | | |
| | ||
* | | | Director |
(Victor E. Bell III) | | | |
| | ||
* | | | Director |
(Peter M. Bristow) | | | |
| | ||
* | | | Director |
(Hope H. Bryant) | | | |
| | ||
* | | | Director |
(H. Lee Durham, Jr.) | | | |
| |
First Citizens BancShares, Inc.
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By:
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Name:
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Title:
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First Citizens BancShares, Inc.
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By:
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Name:
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Title:
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OFFICES
Wells Fargo Capitol Center
150 Fayetteville Street, Suite 2300
Raleigh, North Carolina 27601
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December 21, 2020
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MAILING ADDRESS
P.O. Box 2611
Raleigh, North Carolina
27602-2611
TELEPHONE: (919) 821-1220
FACSIMILE: (919) 821-6800
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(1) |
When (i) the Registration Statement has become effective under the Act, (ii) the Common Stock has been duly issued and delivered as provided in the Merger Agreement, as
contemplated by the Registration Statement, and (iii) upon either (A) the countersigning of the certificates representing the Common Stock by a duly authorized signatory of the registrar for the Common Stock or (B) the book entry of the
Common Stock by the transfer agent for the Common Stock, the Common Stock will be validly issued, fully paid and nonassessable.
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(2) |
When (i) the Registration Statement has become effective under the Act, (ii) the Preferred Stock has been duly issued and delivered as provided in the Merger Agreement,
as contemplated by the Registration Statement, and (iii) upon either (A) the countersigning of the certificates representing the Preferred Stock by a duly authorized signatory of the registrar for the Preferred Stock or (B) the book entry of
the Preferred Stock by the transfer agent for the Preferred Stock, the Preferred Stock will be validly issued, fully paid and nonassessable.
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Sincerely yours,
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SMITH, ANDERSON, BLOUNT, DORSETT,
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MITCHELL & JERNIGAN, L.L.P.
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/s/ Smith, Anderson, Blount, Dorsett,
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Mitchell & Jernigan, L.L.P.
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OFFICES
Wells Fargo Capitol Center
150 Fayetteville Street, Suite 2300
Raleigh, North Carolina 27601
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December 21, 2020
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MAILING ADDRESS
P.O. Box 2611
Raleigh, North Carolina
27602-2611
TELEPHONE: (919) 821-1220
FACSIMILE: (919) 821-6800
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Very truly yours,
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SMITH, ANDERSON, BLOUNT, DORSETT,
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MITCHELL & JERNIGAN, L.L.P.
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/s/ Smith, Anderson, Blount, Dorsett,
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Mitchell & Jernigan, L.L.P.
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Very truly yours,
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/s/ Sullivan & Cromwell LLP
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Exhibit 99.1
![]() FIRST CITIZENS BANCSHARES, INC. ATTN: CORPORATE SECRETARY 4300 SIX FORKS ROAD (FCC22) RALEIGH, NC 27609 |
Read our joint proxy statement/prospectus before you vote by proxy. Then, to ensure that the shares are represented at the Special Meeting, we ask that you appoint the Proxies to vote the shares for you in one of the following three ways:
To Vote by Mail
Mark, date and sign this proxy card and return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. A postage-prepaid envelope has been provided for your convenience.
To Vote by Internet
Before The Meeting - Go to the Internet website www.proxyvote.com.
Have your proxy card in hand when you access the website. When you are prompted for the "control number," enter the 16-digit number printed in the box below, and then follow the instructions provided to create an electronic voting instruction form. You may vote by Internet only until 11:59 p.m. Eastern Time on February 8, 2021, which is the day before the Special Meeting date.
During The Meeting - Go to the Internet website www.virtualshareholdermeeting.com/FIZN2021.
You may attend the Special Meeting via the Internet and vote during the Special Meeting. When you are prompted for the "control number," enter the 16-digit number printed in the box below, and then follow the instructions provided to create an electronic voting instruction form.
To Vote by Telephone - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on February 8, 2021, which is the day before the Special Meeting date. Have your proxy card in hand when you call and then follow the instructions.
If you vote by Internet or telephone, you need not sign and return a proxy card. You will be appointing the Proxies to vote the shares for you on the same terms and with the same authority as if you marked, signed and returned a proxy card. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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D27881-TBD |
KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
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FIRST CITIZENS BANCSHARES, INC. |
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BancShares’ Board of Directors recommends that stockholders vote FOR Proposal 1. | |||||||||||||||
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Abstain |
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1. |
Proposal to approve the issuance of shares of Class A common stock, par value $1.00 per share, of First Citizens BancShares, Inc. (“BancShares”) to holders of common stock, par value $0.01 per share, of CIT Group Inc. (“CIT”) pursuant to the Agreement and Plan of Merger, dated October 15, 2020, by and among BancShares, First-Citizens Bank & Trust Company, FC Merger Subsidiary IX, Inc., and CIT. |
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BancShares’ Board of Directors recommends that stockholders vote FOR Proposal 2. | |||||||||||||||
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For |
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Abstain |
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2. | Proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes to approve Proposal 1 or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to holders of BancShares common stock. | ☐ | ☐ | ☐ | |||||||||||
3. | On any other matters properly presented for action by stockholders at the Special Meeting, and on matters incident to the conduct of the meeting, the Proxies are authorized to vote the shares represented by this appointment of proxy according to their best judgment. | ||||||||||||||
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Instruction: Please sign exactly as your preprinted name(s) appear(s) above. All holders of shares must sign. Joint owners should both sign personally. When signing as attorney, administrator or other fiduciary, please indicate the capacity in which you are signing. In the case of a corporation or partnership or other entity, please sign in the full corporate, partnership or entity name by an authorized officer or other representative. | |||||||||||||||
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Signature [PLEASE SIGN WITHIN BOX] |
Date |
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Signature (Joint Owners) |
Date |
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D27882-TBD |
First Citizens BancShares, Inc. Special Meeting of Stockholders February 9, 2021 - 10:00 AM Appointment of Proxy Solicited by Board of Directors |
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The undersigned hereby appoints Hope H. Bryant, H. Lee Durham, Jr., Frank B. Holding Jr., and Robert T. Newcomb (the “Proxies”), or any substitute appointed by them, as the undersigned’s attorneys and proxies, and authorizes any one or more of them to represent and vote, as directed on the reverse side of this proxy card, all of the outstanding shares of the Class A Common Stock and/or Class B Common Stock of First Citizens BancShares, Inc. (“BancShares”) held of record by the undersigned on December 30, 2020, at the Special Meeting of BancShares’ stockholders (the “Special Meeting”) to be held virtually on February 9, 2021 at the following website: www.virtualshareholdermeeting.com/FIZN2021, at 10:00 AM Eastern Time, and at any postponements or adjournments of the Special Meeting. | ||
I (We) direct that the shares represented by this appointment of proxy be voted as directed on the reverse side. If no voting directions are given, the Proxies may vote those shares “FOR” Proposals 1 and 2. This appointment of proxy may be revoked by the undersigned at any time before the voting takes place at the Special Meeting by filing with BancShares’ proxy tabulator or Corporate Secretary a written instrument revoking it, submitting another valid proxy card bearing a later date, before 11:59 p.m. Eastern Time on February 8, 2021, logging onto the Internet website or calling the telephone number specified on the reverse of this card and following the instructions, or by attending the Special Meeting and voting. | ||
Exhibit 99.2
![]() CIT GROUP INC. ONE CIT DRIVE LIVINGSTON, NJ 07039 |
VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on February 8, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/CIT2021SM
You may attend the Special Meeting via the Internet and vote during the Special Meeting. When you are prompted for the "control number," enter the 16-digit number printed in the box below, and then follow the instructions provided to create an electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on February 8, 2021. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. This must be received by 8:00 A.M. Eastern Time on February 9, 2021. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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D28460-S14001 |
KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
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CIT GROUP INC. |
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The Board of Directors of CIT Group Inc. recommends a vote FOR Proposals 1, 2 and 3. |
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For |
Against |
Abstain |
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1. | The CIT merger proposal: The Board of Directors recommends you vote FOR the proposal to adopt the Agreement and Plan of Merger (the "Merger Agreement"), dated as of October 15, 2020, by and among CIT Group Inc. ("CIT"), First Citizens BancShares, Inc., First-Citizens Bank & Trust Company and FC Merger Subsidiary IX, Inc. | ☐ | ☐ | ☐ | |||||||||||
2. | The CIT compensation proposal: The Board of Directors recommends that you vote FOR the proposal to approve, on an advisory (non-binding) basis, the executive officer compensation that will or may be paid to CIT's named executive officers in connection with the transactions contemplated by the Merger Agreement. | ☐ | ☐ | ☐ | |||||||||||
3. | The CIT adjournment proposal: The Board of Directors recommends that you vote FOR the proposal to adjourn the CIT special meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes to approve the CIT merger proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to holders of CIT common stock. | ☐ | ☐ | ☐ | |||||||||||
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. |
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Signature [PLEASE SIGN WITHIN BOX] |
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Signature (Joint Owners) |
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D28461-S14001 |
CIT GROUP INC. Proxy solicited by the Board of Directors for use at the Special Meeting of Stockholders of CIT Group Inc. on February 9, 2021 |
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The undersigned stockholder of CIT Group Inc., having received the accompanying Notice of Special Meeting of Stockholders and Joint Proxy Statement/Prospectus, hereby appoints each of James R. Hubbard, James P. Shanahan and Douglas Witte, attorney and proxy, with full power of substitution, on behalf of the undersigned and with all powers the undersigned would possess if personally present, to vote all shares of Common Stock of CIT Group Inc. that the undersigned would be entitled to vote at the above Special Meeting and any adjournment thereof upon the matters described on the reverse side hereof and in the accompanying Joint Proxy Statement/Prospectus, and upon any other business that may properly come before such Special Meeting or any adjournment thereof, unless otherwise specified herein. The shares represented by this Proxy will be voted as instructed by you and in the discretion of the proxies on all other matters. If not otherwise specified, shares will be voted "FOR" Proposals 1, 2 and 3 in accordance with the recommendations of the Directors. | ||
(Continued and to be signed on reverse side) | ||
MORGAN STANLEY & CO. LLC
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By:
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/s/ Graham H. Nix
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Name:
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Graham H. Nix
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Title:
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Executive Director
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Date:
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December 21, 2020
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By:
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/s/ John R. Ryan
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Name:
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John R. Ryan
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Date:
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December 21, 2020
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By:
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/s/ Michael A. Carpenter
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Name:
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Michael A. Carpenter
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