FCNCA - This Large Bank Merger Just Got Riskier
First Citizens BancShares (NASDAQ: FCNCA) , a regional bank based in North Carolina, has been on a tear since announcing its all-stock, $2.2 billion acquisition of CIT Group (NYSE: CIT) , a regional bank based in Missouri. The stock is up more than 150% during the past year. CIT shares are up even more, with a gain of almost 180%.
But the deal now seems to be at some risk of not going through after the two banks said that they were extending the deadline to complete the takeover from Oct. 15 to March 1, 2022. The banks said they are still waiting for the Federal Reserve to sign off on the acquisition. This should make investors a little bit nervous. Here's why.
When First Citizens announced its agreement with CIT in October 2020, management projected the transaction to close in the first half of 2021. That clearly didn't happen, and the bank said the Fed still hadn't approved the sale during its second-quarter earnings call back on Aug. 3 -- even though the Federal Deposit Insurance Corp. and the Office of the North Carolina Commissioner of Banks have signed off (most big banks have three regulators).
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This Large Bank Merger Just Got Riskier