Columbia-based First Citizens Bank and Trust is being bought by its North Carolina cousin, First Citizens Bank of North Carolina, in a deal worth up to $676.4 million.
The deal – between separate companies that share common ownership – is expected to close this fall. It would create the largest family-controlled bank in the United States and the sixth-largest bank headquartered in the Southeast by asset size, according to a press release issued by the banks.
The combined company will be headquartered in Raleigh and led by Frank B. Holding Jr., the third-generation owner of the North Carolina bank. Jim Apple, chairman and chief executive of the South Carolina-based bank, plans to retire in the fall when the deal is complete, the banks said.
“We see so many positives to joining with a bank that has a similar culture and brings 116 years of experience in financial services,” Apple said in a prepared statement. “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.”
It was unknown late Tuesday, when the merger was announced, how jobs in South Carolina would be affected, spokeswoman Angela English said. She said there is little overlap in branches, so few are likely to be shuttered. However, many strategic decisions will be made at a later date after a leadership team and board of directors, comprised of members from both organizations, is announced, she said.
“Both companies are very committed to the communities we serve,” English said. “It's too early to say since they haven't named the leadership teams.”
She said the “strategic merger” could benefit customers by giving them a broader network of branches and ATMs, and a more comprehensive array of products and services.
“It's really a win for our customers and our shareholders in the communities,” she said.
Last year, Columbia-based First Citizens opened a banking café on downtown’s Main Street and undertook a more than year-long renovation of the historic Brennen building.
English said the two companies have worked together for years in a vendor-client relationship, with the North Carolina bank providing services to the S.C. bank including information technology and data processing.
The combined bank will have assets of $30.7 billion, deposits of $26.1 billion, loans of $18 billion, and more than 575 branches in 18 states and Washington, D.C.
The North Carolina bank, controlled by First Citizens BancShares Inc., is 116 years old. In 1964, three brothers from the Holding family branched out to buy Anderson Bank of Dillon, which later became First Citizens Bancorp., the S.C. bank.
“The banks have really shared a lot of the same culture and values,” said Barbara Thompson, spokeswoman for the North Carolina bank. “This is a major milestone.”
The North Carolina bank, which is traded on the NASDAQ stock exchange, has been in growth mode, Thompson said. The bank did not take federal money from the Troubled Asset Relief Program and has been one of the largest acquirers of failed banks in the United States in the years following the recession, she said. Earlier this year, it bought Mountain First Bank in Western North Carolina.
The merger requires regulatory and shareholder approval from both banks. A conversion to the North Carolina bank’s systems likely would not take place until 2015, English said, and customers should continue to bank as normal.
Each share of First Citizens Bancorp. will convert automatically into the right to receive four shares of First Citizens BancShares Class A common stock and $50 in cash. Alternately, shareholders can elect for each share of First Citizens Bancorp. 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.
Depending on the shareholders’ decisions, the deal will be valued between $636.9 million and $676.4 million.