- In a move that's expected to add stable lower-cost deposits, CIT Group (NYSE:CIT) agrees to buy Mutual of Omaha's savings bank subsidiary for $1B, comprised of cash and up to $150M of CIT common stock.
- The deal will also extend CIT's banking capabilities and enhance profitability, CIT says.
- The transaction includes $6.8B in deposits, $4.5B of which are from Mutual of Omaha Bank's homeowner's association deposits from more than 31,000 community associations nationwide and $2.3B of which are from commercial and consumer financial centers in key markets.
- Also, $8.3B of total assets, including $3.9B of middle-market commercial loans, are part of the deal.
- Deal excludes Mutual's mortgage subsidiary, Synergy One Lending.
- On a pro forma basis, CIT will have ~$42.1B of total deposits and $58.9B of total assets.
- Sees deal improving it deposit costs by ~20 basis points upon closing.
- Sees deal adding to 2020 estimated EPS by 2%; EPS accretion is expected to grow to double-digits over time.
- Return on tangible common equity ratio is expected to be enhanced by 80 bps in 2020 and increase to more than 100 bps over two years.
- Sees transaction closing in Q1 2020.
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Conference call at 8:00 AM ET.