First Citizens BancShares, Inc. (NASDAQ: FCNCA) and First Citizens Bancorporation announced Wednesday the signing of a definitive merger agreement.
The agreement provides for the merger of Columbia, S.C.-based First Citizens Bancorporation and its banking subsidiary, First Citizens Bank and Trust Company, Inc., into Raleigh, N.C.-based First Citizens BancShares, Inc. and its banking subsidiary, First Citizens Bank.
The transaction is expected to close in the fourth quarter of 2014, subject to the receipt of regulatory approvals and the approval of shareholders from both companies.
Following all approvals, Frank B. Holding Jr., chairman and CEO of First Citizens BancShares and First Citizens Bank, is expected to lead the combined company. He said: “I’m pleased to announce the merger of these two strong service-oriented companies. Our similar cultures, values and business philosophies make this transaction a natural fit. We see great opportunity in combining to create one bank with enormous potential for future success for our stockholders, customers, associates and communities.”
Jim Apple, chairman and CEO of First Citizens Bancorporation and First Citizens Bank and Trust Company, Inc., plans to retire this fall when the transaction is completed. Apple said about the proposed merger: “We see so many positives to joining with a bank that has a similar culture and brings 116 years of experience in financial services. This agreement makes compelling strategic sense. The combined First Citizens Bank, with its robust product and service offerings and customer focus, will carry on a tradition of financial strength and growth.”
The combined company’s leadership team and board of directors will be comprised of members from both organizations. They will be announced at later dates.
Based on financial results as of March 31, 2014, the combined company would have total assets of $30.7 billion, deposits of $26.1 billion, loans of $18.0 billion, and more than 575 branches in 18 states and the District of Columbia. The merger will create the largest family-controlled bank in the U.S. and the sixth largest bank headquartered in the Southeast by asset size.
Under the terms of the agreement, at closing each share of First Citizens Bancorporation will convert automatically into the right to receive 4.0 shares of First Citizens BancShares Class A common stock and $50 in cash, unless the holder elects for each share of such holder’s First Citizens Bancorporation common stock to be converted into 3.58 shares of First Citizens BancShares Class A common stock and 0.42 shares of First Citizens BancShares Class B common stock. Based on the closing price of First Citizens BancShares Class A common stock and the last price of First Citizens BancShares Class B common stock on June 9, 2014, and depending on whether the shareholders of First Citizens
Bancorporation elect to receive the combination of First Citizens BancShares Class A common stock and cash or the combination of First Citizens BancShares Class A common stock and Class B common stock, the transaction is valued at between $636.9 million and $676.4 million.
The agreement was negotiated and approved by a special committee of independent directors of each board and approved by each company’s board of directors.
The independent committee of First Citizens BancShares was advised by Sandler O’Neill + Partners, L.P. Raleigh-based Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP, provided legal counsel.
The independent committee of First Citizens Bancorporation was advised by Bank of America Merrill Lynch. Charlotte, N.C.-based Robinson Bradshaw & Hinson, P.A., provided legal counsel.
Once available, a free copy of the Joint Proxy Statement/Prospectus, as well as other filings containing information about First Citizens BancShares, may be obtained at the SEC’s Internet site (www.sec.gov). These documents will also be available, free of charge, from both First Citizens BancShares and First Citizens Bancorporation: