Columbia’s First Citizens Bancorp. to merge with First Citizens BancShares

Staff Report
colanews@scbiznews.com
Published June 10, 2014

First Citizens BancShares Inc. of Raleigh and First Citizens Bancorp. Inc. of Columbia announced late Tuesday an agreement to merge the S.C. institution into the larger North Carolina bank holding company.

First Citizens Bancorp. has assets of $8.5 billion with 176 offices in South Carolina and Georgia, while First Citizens BancShares Inc. has assets of $22.2 billion with 401 offices in 17 states.

The combined bank will have assets of $30.7 billion, making it the largest family-controlled bank in the United States, the banks said in their announcement.

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 Monday, the transaction is valued at between $636.9 million and $676.4 million.

Frank HoldingNorth Carolina’s Holding family has controlled the Raleigh-based bank for three generations, and family members directly or indirectly own more than 90% of the company's voting shares, according to AmericanBanker.com. Frank Holding Jr. has been president of the Raleigh-based bank since 2008. His father was president 1918-1957 and his brother Lewis was president 1957-2008, AmericanBanker.com reported.

The family also owns controlling interests in Fuquay-Varina, N.C.-based Fidelity Bank, with assets of $1.38 billion; Mt. Olive-based Southern Bank & Trust, with assets of $1.23 billion; and Columbia-based First Citizens Bancorp., the Triangle Business Journal has reported.

Based on financial results as of March 31, the combined company would have total deposits of $26.1 billion, loans of $18 billion, and more than 575 branches in 18 states and the District of Columbia. The merger will create the sixth-largest bank headquartered in the Southeast by asset size.

First Citizens Bank and Trust Co. Inc., the bank subsidiary of First Citizens Bancorp., was the fourth-largest bank in South Carolina when ranked by deposit market share, according to the FDIC's ranking last June 30. First Citizens had 165 offices across South Carolina, and reported $6.39 billion in deposits, or 9.33% of the total deposits in the state.

Holding is expected to lead the combined company.

"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," Holding said.

Jim AppleJim Apple, chairman and CEO of First Citizens Bancorp. and First Citizens Bank and Trust Co. Inc., plans to retire this fall when the transaction is completed.

"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," Apple said.

The merger is expected to close in the fourth quarter of 2014, subject to regulatory approvals and the shareholder approval from both companies. The combined company's leadership team and board of directors will comprise members from both organizations. They will be announced at later dates, the companies said.

At closing, each share of First Citizens Bancorp. will convert into four 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 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.

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.

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