Citizens Financial Group, Inc. Announces Agreement to Acquire Investors Bancorp, Inc.
Solidifies Citizens’ banking franchise serving communities in the greater
The acquisition of Investors enhances Citizens’ banking franchise, adding an attractive middle market/small business and consumer customer base while building its physical presence in the northeast with the addition of 154 branches* located in the greater
“The acquisition of Investors, following on the heels of the acquisition of HSBC’s
“Joining Citizens, with its broad capabilities, scale and commitment to excellence in customer service opens exciting opportunities for our combined company,” said
Highlights of the proposed transaction to acquire Investors:
Creates long-term shareholder value
- Immediately accretive to EPS; given substantial synergies, expected to add approximately 6.4% to 2023 fully-diluted EPS. Combined with HSBC, transactions add 8.8% to 2023 fully-diluted EPS
- Expected to deliver a strong internal rate of return of over 20% and an estimated return on invested capital of approximately 13%
- Accelerates achievement of long-term financial goals; expected to improve return on tangible common equity by approximately 120 basis points and efficiency ratio by approximately 270 basis points
- Expected to be CET1 neutral at closing
- Modest tangible book value per share dilution of approximately 2.6% expected at close with an approximately 2.5-year earn-back
Identified cost savings and other synergies
$130 millionof fully-phased in annual cost savings, after provision for adding investments in brand marketing and technology capabilities; this is approximately 30% of Investors' estimated 2021 cost base
Total estimated pre-tax integration costs of approximately
- Meaningful revenue upside expected but not included in transaction estimates
Advances Citizens’ strategy with solid presence in important markets
Expands upon our recently announced HSBC acquisition, building Citizens’ brand presence in the important greater
New York Cityand Philadelphiametropolitan and New Jerseymarkets and combined, adding about one million customers
- Citizens combined with Investors and HSBC reaches top-10 NYC Metro deposit ranking
Fills branch gap, connecting
New Englandto the Mid-Atlantic market and adding to our leadership position in the Philadelphia MSA; adds 154 branches, including approximately 130 in the New York City MSA
- Provides branch base and brand reach to expand commercial lending and fee opportunities in the region; adds attractive middle market/ small business customer base
- Opportunity to drive household growth and share while accelerating lending and wealth growth in consumer
Under the terms of the agreement and plan of merger, Investors shareholders will receive 0.297 of a share of CFG common stock and
Key members of Investors' management team are expected to join Citizens, ensuring business and client continuity. Upon closing of the transaction,
The agreement and plan of merger has been unanimously approved by the boards of directors of each company and the transaction is expected to close in first or second quarter 2022, subject to approval by the shareholders of Investors, receipt of required regulatory approvals and other customary closing conditions.
CFG management will host a live conference call this morning with details as follows:
Individuals may call in by dialing 844-291-5495, conference ID 1199032
The live webcast will be available at http://investor.citizensbank.com under Events & Presentations.
A replay of the conference call will be available beginning at
A presentation providing additional information on the transaction is available at https://investor.citizensbank.com/about-us/investor-relations/events-and-presentations/2021.aspx.
Cautionary Statement About Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and future performance of Citizens and Investors. Words such as “anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," “targets,” “designed,” "could," "may," "should," "will" or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on Citizens’ and Investors’ current expectations and assumptions regarding Citizens’ and Investors’ businesses, the economy, and other future conditions.
Because forward-looking statements relate to future results and occurrences, they are subject to inherent risks, uncertainties, changes in circumstances and other factors that are difficult to predict. Many possible events or factors could affect Citizens’ and/or Investors’ future financial results and performance and could cause the actual results, performance or achievements of Citizens and/or Investors to differ materially from any anticipated results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, (1) the risk that the cost savings, any revenue synergies and other anticipated benefits of the proposed transaction may not be realized or may take longer than anticipated to be realized, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the condition of the economy and competitive factors in areas where Citizens and Investors do business, (2) disruption to the parties’ businesses as a result of the announcement and pendency of the proposed transaction and diversion of management’s attention from ongoing business operations and opportunities, (3) the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between Citizens and Investors, (4) the risk that the integration of Citizens’ and Investors’ operations will be materially delayed or will be more costly or difficult than expected or that Citizens and Investors are otherwise unable to successfully integrate their businesses, (5) the failure to obtain the necessary approvals of the stockholders of Investors, (6) the outcome of any legal proceedings that may be instituted against Citizens and/or Investors, (7) the failure to obtain required governmental approvals or a delay in obtaining such approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction), (8) reputational risk and potential adverse reactions of Citizens’ and/or Investors’ customers, suppliers, employees or other business partners, including those resulting from the announcement or completion of the proposed transaction, (9) the failure of any of the closing conditions in the definitive merger agreement to be satisfied on a timely basis or at all, (10) delays in closing the proposed merger, (11) the possibility that the proposed merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (12) the dilution caused by Citizens’ issuance of additional shares of its capital stock in connection with the proposed transaction, (13) general competitive, economic, political and market conditions, (14) other factors that may affect future results of Investors and/or Citizens including changes in asset quality and credit risk, the inability to sustain revenue and earnings growth, changes in interest rates and capital markets, inflation, customer borrowing, repayment, investment and deposit practices, the impact, extent and timing of technological changes, capital management activities, and other actions of the
Except to the extent required by applicable law or regulation, each of Citizens and Investors disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included in this communication to reflect future events or developments. Further information regarding Citizens, Investors and factors which could affect the forward-looking statements contained herein can be found in Citizens’ Annual Report on Form 10-K for the fiscal year ended
Additional Information and Where to Find It
In connection with the proposed transaction, Citizens will file a registration statement on Form S-4 with the
The information contained in this communication does not constitute an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
INVESTORS AND SECURITY HOLDERS OF INVESTORS AND CITIZENS AND THEIR RESPECTIVE AFFILIATES ARE URGED TO READ, WHEN AVAILABLE, THE REGISTRATION STATEMENT ON FORM S-4, THE PROXY STATEMENT AND PROSPECTUS TO BE INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT INVESTORS, CITIZENS AND THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain a free copy of the registration statement, including the proxy statement and prospectus contained therein, as well as other relevant documents filed with the
Participants in Solicitation
Investors and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction under the rules of the
Citizens Investor Relations: