First Citizens BancShares Acquires BMO Branches; Focus on Deposit Retention
On September 4, First Citizens BancShares (NASDAQ:FCNCA) completed its acquisition of 138 branches from BMO Bank N.A., spanning across the Midwest, Great Plains, and West. The deal is expected to bring in approximately $5.3 billion in deposits and $700 million in loans, with an estimated net liquidity gain of around $4.6 billion. This acquisition aims to enhance First Citizens' deposit franchise by acquiring accounts at a lower average rate than the company's current funding cost. The success of this transaction hinges on retaining these acquired deposits, which could reduce overall funding costs and support loan growth or investment in securities. However, there are risks associated with customer attrition due to differences in digital platforms, pricing strategies, or service offerings post-merger. The integration process also involves managing operating expenses for the new branches while aligning technology systems and employee resources. The acquisition is expected to provide immediate earnings-per-share accretion but may slightly reduce First Citizens' Common Equity Tier 1 capital ratio by about 27 basis points.
Tickers: $FCNCA
Topics: acquisition banking branch expansion deposits