- First Citizens has always been an active acquirer, but acquiring CIT takes the bank into the big leagues and significantly expands its commercial lending operations.
- CIT adds meaningful geographic and product diversification to First Citizens' lending operation, while First Citizens should be able to significantly reduce CIT's funding costs and boost margins.
- Given meaningfully higher credit losses at CIT versus First Citizens, as well the involvement of First Citizens' founding family in management, there could be a higher risk of integration/cultural issues.
- Even with integration risk, First Citizens shares look undervalued today.
For further details see:
First Citizens BancShares Entering Into A New Era With An Interesting Valuation