UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  January 4, 2022 (January 3, 2022)

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First Citizens BancShares, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Registrant’s telephone number, including area code: (919) 716-7000

 

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(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

Securities Registered Pursuant to Section 12(b) of the Securities Exchange Act of 1934:

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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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.

The descriptions set forth above of each of the debt securities and of FCB’s obligations thereunder are qualified in their entirety by reference to the applicable indenture and related indenture documents.

The instruments of assumption pursuant to which FCB assumed the above financial obligations, as well as the indentures, credit agreement and related documents pursuant to which such financial obligations were originally issued, have not been filed herewith pursuant to Item 601(b)(4)(v) of Regulation S-K under the Securities Act. First Citizens agrees to furnish a copy of such documents to the Securities and Exchange Commission upon request.

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.

EXECUTIVE OFFICERS

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.

Immediately prior to the Effective Time of the First-Step Merger, Ms. Harney held RSUs representing the right to receive a total of 16,638 shares of CIT Common Stock, of which 5,293 shares were scheduled to vest on March 1, 2022, 3,660 shares were scheduled to vest on March 1, 2023, and 7,686 shares were scheduled to vest on March 1, 2024, subject to a performance-based vesting hurdle and Ms. Harney’s continued employment with CIT up to and including each vesting date. At the Effective Time, the RSUs converted into the right to receive 1,034 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.

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.

First Citizens Executive Compensation Programs

Ms. Alemany and Ms. Harney will be eligible to participate in all of First Citizen’s executive-level compensatory programs. Additional information concerning First Citizens’ compensatory plans and programs for executive officers is provided in the sections of First Citizens’ definitive proxy statement for the 2021 annual meeting of shareholders (the “2021 Annual Proxy Statement”) captioned “Compensation Discussion and Analysis,” “Executive Compensation” and “Post-Employment Compensation”, which are incorporated herein by reference.

First Citizens Executive Officers after the Transaction

Following the Effective Time, the executive officers of First Citizens were as follows:

DIRECTORS

At the Effective Time, as previously disclosed in the 2021 Annual Proxy Statement and in accordance with the Merger Agreement, the following individuals, each of whom was a member of the Board of Directors of CIT immediately prior to the consummation of the Transaction, were elected to the First Citizens Board of Directors: (i) Ellen R. Alemany, (ii) Michael A. Carpenter, and (iii) Vice Admiral John R. Ryan, USN (Ret) (collectively, the “New Directors”).

Other than the Merger Agreement, and in the case of Ms. Alemany, her letter agreement, there are no arrangements between the New Directors and any other person pursuant to which the New Directors were selected as directors.  There are no transactions in which any New Director has an interest requiring disclosure under Item 404(a) of Regulation S-K.

Biographical and other information related to the New Directors and Ms. Harney is provided in the 2021 Annual Proxy Statement under the caption “Proposed New Directors and Executive Officers”, which information is incorporated herein by reference. Based on its review and application of the independence criteria contained in the listing requirements of The NASDAQ Stock Market (“Nasdaq”), the First Citizens’ Board of Directors has determined that each of Mr. Carpenter and Vice Admiral Ryan is independent under applicable Nasdaq listing standards.

Following the Effective Time, the major committees of the Board of Directors of First Citizens will be comprised of the following members:

Stock Ownership of New Directors

Vice Admiral John R. Ryan (USN (Ret.).  Immediately prior to the Effective Time of the First-Step Merger, Vice Admiral Ryan held RSUs representing the right to receive a total of 9,997 shares of CIT Common Stock and additional RSUs representing the right to receive the value of 1,622 shares of CIT Common Stock in cash. Pursuant to the terms of the underlying award agreements, these RSUs vested in full on the Effective Time of the First-Step Merger. The cash-settled RSUs were settled in cash equal to the value of $813.02 per RSU following closing.  Vice Admiral Ryan previously elected to have settlement of these stock-settled awards deferred until he is no longer a director. In addition, Vice Admiral Ryan previously deferred settlement of 20,206 fully-vested RSUs granted to him in 2011-2014 until he is no longer a director. Therefore, in connection with the Transaction, a total of 30,203 RSUs were converted into the right to receive First Citizens Common Stock and settled following closing.  As of the date of this Current Report, Vice Admiral Ryan owned 1,871 shares of First Citizens Common Stock.

Each New Director (other than Ms. Alemany who will be compensated as an executive officer) will be compensated in accordance with the 2021 standard schedule of fees under which compensation is paid to non-employee directors included in the 2021 Annual Proxy Statement under the caption “2020 Director Compensation”, which is incorporated herein by reference. The New Directors will be paid the annual retainer of $200,000, prorated based on the number of days remaining in their terms prior to the 2022 Annual Meeting.

 

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.

 

(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.

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

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