Item 2.01. Completion of Acquisition or Disposition of Assets.
On January 3, 2022, First Citizens BancShares, Inc. ("First Citizens") completed
its previously announced merger (the "Merger") with CIT Group Inc., a Delaware
corporation ("CIT"), pursuant to an Agreement and Plan of Merger, dated as of
October 15, 2020, as amended by Amendment No. 1, dated as of September 30, 2021
(as amended, the "Merger Agreement"), by and among First Citizens,
First-Citizens Bank & Trust Company ("FCB"), FC Merger Subsidiary IX, Inc., a
direct, wholly owned subsidiary of FCB ("Merger Sub"), and CIT, the parent
company of CIT Bank, N.A., a national banking association ("CIT Bank"). Pursuant
to the Merger Agreement, on the closing date, Merger Sub merged with and into
CIT, with CIT as the surviving entity (the "First-Step Merger"), and immediately
following the effective time of the First-Step Merger (the "Effective Time"),
CIT merged with and into FCB, with FCB as the surviving entity (the "Second-Step
Merger" and together with the First-Step Merger, the "Mergers"). Immediately
following the consummation of the Mergers, CIT Bank merged with and into FCB,
with FCB as the surviving bank (together with the Mergers, the "Transaction").
Under the terms of the Merger Agreement, at the Effective Time, each share of
CIT common stock, par value $0.01 per share ("CIT Common Stock"), issued and
outstanding as of immediately prior to the Effective Time, except for certain
shares of CIT Common Stock owned by CIT or First Citizens, was converted into
the right to receive 0.06200 shares (the "Exchange Ratio" and such shares, the
"Merger Consideration") of First Citizens Class A Common Stock, par value $1.00
per share ("First Citizens Common Stock"), plus, if applicable, cash in lieu of
fractional shares of First Citizens Common Stock.
At the Effective Time, each issued and outstanding share of fixed-to-floating
rate non-cumulative perpetual preferred stock, series A, par value $0.01 per
share, of CIT ("CIT Series A Preferred Stock") and 5.625% non-cumulative
perpetual preferred stock, series B, par value $0.01 per share, of CIT ("CIT
Series B Preferred Stock"), automatically converted into the right to receive
one share of a newly created series of preferred stock, series B, of First
Citizens ("First Citizens Series B Preferred Stock") and one share of a newly
created series of preferred stock, series C, of First Citizens ("First Citizens
Series C Preferred Stock" and together with the First Citizens Series B
Preferred Stock, the "New First Citizens Preferred Stock"), respectively, 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 CIT Series A Preferred
Stock and the CIT Series B Preferred Stock, respectively. The non-callable
period for the New First Citizens Preferred Stock was extended for five years to
January 4, 2027.
Pursuant to the terms of the Merger Agreement, at the Effective Time, (i) each
restricted stock unit award or performance stock unit award in respect of shares
of CIT Common Stock, including any deferred restricted stock unit award (each, a
"CIT Award") outstanding prior to the Effective Time, other than a CIT Director
RSU Award (defined below), automatically converted into a restricted stock unit
in respect of a number of shares of First Citizens Common Stock (a "First
Citizens Award") equal to (a) the number of shares of CIT Common Stock subject
to such CIT Award immediately prior to the Effective Time based on target level
performance multiplied by (b) the Exchange Ratio, subject to the same terms and
conditions applicable to the existing CIT Award (except, in the case of
performance stock unit awards, for any performance goals or metrics), and (ii)
each restricted stock unit award in respect of shares of CIT Common Stock that
(a) was outstanding and unvested immediately prior to the Effective Time, (b)
was held by a member of the Board of Directors of CIT, (c) automatically vested
upon the Effective Time in accordance with its terms, and (d) was not subject to
a deferral election (each, a "CIT Director RSU Award") automatically converted
into the right to receive the Merger Consideration.
The foregoing description of the Transaction and the Merger Agreement does not
purport to be complete and is qualified in its entirety by reference to the full
text of the Merger Agreement, which is filed as Exhibit 2.1 to this Current
Report on Form 8-K (this "Current Report") and is incorporated herein by
reference.
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Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of Registrant
In connection with the Transaction, on January 4, 2022, FCB assumed, through
merger and the execution of instruments of assumption, the following indentures
and securities issued thereunder:
$1,250,000,000 5.000% Senior Unsecured Notes due 2022
Indenture Indenture (Senior Debt Securities), dated as of March 15,
2012, as amended, among CIT, as issuer, Wilmington Trust,
National Association, as trustee, and Deutsche Bank Trust
Company Americas, as paying agent, security registrar and
authenticating agent (the "2012 Senior Indenture")
Maturity August 15, 2022
Interest 5.000% per annum paid semiannually on February 15 and
August 15 of each year
Principal Balance as $1,147,000,000.00
of December 31, 2021
$750,000,000 5.000% Senior Unsecured Notes due 2023
Indenture 2012 Senior Indenture
Maturity August 1, 2023
Interest 5.000% per annum paid semiannually on February 1 and
August 1 of each year
Principal Balance as $750,000,000.00
of December 31, 2021
$500,000,000 4.750% Senior Unsecured Notes due 2024
Indenture 2012 Senior Indenture
Maturity February 16, 2024
Interest 4.750% per annum paid semiannually on February 16 and
August 16 of each year
Principal Balance as $500,000,000.00
of December 31, 2021
$500,000,000 3.929% Senior Unsecured Fixed-to-Floating Rate Notes due 2024
Indenture 2012 Senior Indenture
Maturity June 19, 2024
Interest 3.929% per annum paid semiannually on June 19 and
December 19 of each year during the fixed rate period,
and a variable rate per annum paid quarterly on September
19, 2023, December 19, 2023, March 19, 2024 and June 19,
2024 during the floating rate period
Principal Balance as $500,000,000.00
of December 31, 2021
$500,000,000 5.250% Senior Unsecured Notes due 2025
Indenture 2012 Senior Indenture
Maturity March 7, 2025
Interest 5.250% per annum paid semiannually on March 9 and
September 9 of each year
Principal Balance as $500,000,000.00
of December 31, 2021
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$550,000,000 2.969% Senior Unsecured Fixed-to-Floating Notes due 2025
Indenture Issuing and Paying Agency Agreement, dated as of
September 23, 2019, between CIT Bank, as issuer, and
Deutsche Bank Trust Company Americas, as issuing and
paying agent, transfer agent and registrar
Maturity September 27, 2025
Interest 2.926% per annum paid semiannually on March 27 and
September 27 of each year during the fixed rate period,
and a variable rate per annum paid quarterly on December
27, 2024, March 27, 2025, June 27, 2025, and September
27, 2025 during the floating rate period
Principal Balance as $315,249,000.00
of December 31, 2021 $500,000,000 6.000% Senior Notes due 2036
Indenture Indenture (Senior Debt Securities), dated as of January
20, 2006, as amended, between CIT, as issuer, and The
Bank of New York Mellon, as trustee
Maturity April 1, 2036
Interest 6.000% per annum paid semiannually on April 1 and October
1 of each year
Principal Balance as $51,353,000.00
of December 31, 2021
$400,000,000 6.125% Subordinated Notes due 2028
Indenture Indenture (Subordinated Debt Securities), dated as of
March 9, 2018, as amended, among CIT, as issuer,
Wilmington Trust, National Association, as trustee, and
Deutsche Bank Trust Company Americas, as paying agent,
security registrar and authenticating agent (the "2018
Subordinated Indenture")
Maturity March 9, 2028
Interest 6.125% per annum paid semiannually on March 9 and
September 9 of each year
Principal Balance as $400,000,000.00
of December 31, 2021
$100,000,000 4.125% Fixed-to-Fixed Rate Subordinated Notes due 2029
. . .
Item 3.03. Material Modifications to Rights of Security Holders.
On January 3, 2022, in connection with the consummation of the Transaction,
First Citizens filed two certificates of designation with the Secretary of State
of the State of Delaware to fix the designations, preferences, limitations and
relative rights of each series of the New First Citizens Preferred Stock.
The description of the New First Citizens Preferred Stock under the section of
the joint proxy statement/prospectus contained in the Registration Statement on
Form S-4 (File No. 333-250131) filed by First Citizens with the Securities and
Exchange Commission (the "Commission") on November 16, 2020, as amended December
21, 2020 (as so amended, the "Joint Proxy Statement/Prospectus") entitled
"Description of New First Citizens Preferred Stock" is incorporated herein by
reference. The description of the terms of the New First Citizens Preferred
Stock in the Joint Proxy Statement/Prospectus is qualified in its entirety by
reference to the full text of the certificates of designation, which are filed
hereto as Exhibits 4.1 and Exhibit 4.2 and incorporated by reference herein.
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
EXECUTIVE OFFICERS
Vice Chairwoman of the Board. At the Effective Time, pursuant to the terms of
the Merger Agreement, Ellen R. Alemany, the former Chairwoman and Chief
Executive Officer of CIT, was appointed as the Vice Chairwoman of First Citizens
and FCB. As previously described in the Joint Proxy Statement/Prospectus, Ms.
Alemany entered into a letter agreement with First Citizens setting forth the
terms of her employment with First Citizens following the consummation of the
Transaction. For a description of Ms. Alemany's letter agreement and additional
information about the arrangements and transactions with respect to Ms. Alemany,
please see the section in the Joint Proxy Statement/Prospectus entitled
"Interests of CIT's Directors and Executive Officers in the Mergers". Such
description is incorporated herein by reference. As of the date of this Current
Report, Ms. Alemany owned 18,807 shares of First Citizens Common Stock, 30,000
shares of First Citizens Series C Preferred Stock and held restricted stock
units ("RSUs") representing the right to receive a total of 20,080 shares of
First Citizens Common Stock, as described below. For more information regarding
these RSUs, see Item 8.01 of that certain CIT Current Report on Form 8-K
dated the date hereof, and which is incorporated herein by reference.
Immediately prior to the Effective Time of the First-Step Merger, Ms. Alemany
held RSUs representing the right to receive a total of 274,351 shares of CIT
Common Stock, of which 52,927 shares were scheduled to vest on March 1, 2022,
36,597 shares were scheduled to vest on March 1, 2023, 76,858 shares were
scheduled to vest on March 1, 2024 and 107,968 shares were scheduled to vest on
the earlier of (1) December 17, 2024 and (2) the second anniversary of the
closing of the Mergers, subject to a performance-based vesting hurdle and Ms.
Alemany's continued employment with CIT up to and including each vesting date.
At the Effective Time, the RSUs converted into the right to receive 17,012
shares of First Citizens Common Stock using the same Exchange Ratio applied to
shares of CIT in the First-Step Merger (rounded up to the nearest whole share).
The terms and conditions that apply to vesting, settlement, rights to dividend
equivalents, etc. will continue to apply; provided, however, that if she
experiences an eligible termination of employment or retirement her RSUs will
vest in full.
Immediately prior to the Effective Time of the First-Step Merger, Ms. Alemany
also held performance share units ("PSUs") representing the right to receive a
target of 49,476 shares if CIT achieves certain applicable performance targets
for the 2020-2022 performance period, subject to Ms. Alemany's continued
employment with CIT up to and including the conclusion of the applicable
performance period. Pursuant to the terms of the underlying award agreements,
performance targets are considered to have been achieved at 100% of target in
the event of a change in control of CIT. Therefore, at the Effective Time, the
PSUs converted into RSUs representing the right to receive 3,068 shares of First
Citizens Common Stock using the same Exchange Ratio being applied to shares of
CIT in the First-Step Merger (rounding up to the nearest whole share). The terms
and conditions that apply to vesting, settlement, rights to dividend
equivalents, etc. will continue to apply; provided, however, that if she
experiences an eligible termination of employment or retirement these RSUs will
vest in full.
The terms of the underlying award agreements provide that, in the discretion of
the committee that administers the plan under which the awards were granted, in
lieu of the delivery of shares, the awards and any dividend equivalents payable
in shares may be settled in cash.
Chief Credit Officer. At the Effective Time, Marisa J. Harney, the former Chief
Credit Officer of CIT, was appointed as the Chief Credit Officer of FCB. In
connection with entering into the Merger Agreement, FCB entered into a letter
agreement with Ms. Harney with respect to the terms of Ms. Harney's employment
with and service to FCB following the consummation of the Transaction. Ms.
Harney will receive an annual base salary no less than that in effect
immediately prior to the consummation of the Mergers (currently $500,000). In
addition, Ms. Harney is eligible for incentive compensation opportunities
commensurate with those provided to other senior executives of FCB, except that
her short term incentive payout for 2021 (which will be paid in 2022) will be no
less than 85 percent of target. As an incentive for her to remain employed with
FCB, Ms. Harney is eligible to receive a retention bonus that will vest in full
and become non-forfeitable upon the second anniversary of the closing date of
the Mergers, unless prior to that date she incurs an eligible termination or
retirement, each as defined in the letter agreement. The amount of her retention
bonus will be $2,336,500. The retention bonus will be paid in a lump sum upon
separation from service, conditioned upon the execution of a release of all
claims. Ms. Harney is also entitled to a special bonus of $500,000, which will,
subject to continued employment, be paid 50 percent on the first anniversary of
the closing date of the Mergers and 50 percent on the second anniversary of the
closing date of the Mergers, unless prior to those dates she incurs an eligible
termination, in which case she will immediately receive any unpaid portion of
the special bonus. Ms. Harney will remain subject to the terms of her existing
restrictive covenant agreements with CIT. As of the date of this Current Report,
Ms. Harney owned 475 shares of First Citizens Common Stock and held RSUs
representing the right to receive a total of 1,341 shares of First Citizens
Common Stock, as described below.
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. . .
Item 8.01. Other Events
On January 4, 2022, First Citizens issued a press release announcing the
completion of the Transaction. A copy of the press release is attached hereto as
Exhibit 99.1 and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
(a) Financial statement of business acquired
The financial statements of CIT required by Item 9.01(a) of Form 8-K will be
filed by amendment no later than 71 calendar days after the date this Current
Report is required to be filed.
(b) Pro forma financial information
The pro forma financial information required by Item 9.01(b) of Form 8-K will be
filed by amendment no later than 71 calendar days after the date of this Current
Report is required to be filed.
(d) Exhibits. The following exhibit accompanies this Current Report.
Exhibit No. Description
Agreement and Plan of Merger, dated as of October 15,
2020, by and among First Citizens BancShares, Inc.,
2.1 First-Citizens Bank & Trust Company, FC Merger
Subsidiary IX, Inc., and CIT Group Inc. (incorporated
by reference to Exhibit 2.1 to First Citizens' current
report on Form 8-K filed on October 20, 2020)
Amendment No. 1, dated September 30, 2021, to the
Agreement and Plan of Merger dated October 15, 2020
2.2 (incorporated by reference to Exhibit 2.1 to First
Citizens' current report on Form 8-K filed on
September 30, 2021)
4.1 Certificate of Designation of Fixed-to-Floating Rate
Non-Cumulative Perpetual Preferred Stock, Series B
4.2 Certificate of Designation of 5.625% Non-Cumulative
Perpetual Preferred Stock, Series C
99.1 Press Release of First Citizens BancShares, Inc.,
dated January 4, 2022
104 Cover Page Interactive Data File (embedded within the
Inline XBRL document)
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