PROVIDENCE, R.I.–(BUSINESS WIRE)– Citizens Financial Group, Inc. (NYSE: CFG) today announced that Citizens Bank, N.A. has entered into an agreement to acquire 80 East Coast branches and the national online deposit business from HSBC Bank U.S.A, N.A.. Under the agreement, Citizens will acquire approximately $9.0 billion in deposits and approximately $2.2 billion in loans for a 2.0 percent premium paid on deposits at closing. The transaction is expected to be immediately accretive to Citizens’ earnings per share and generate an internal rate of return of approximately 20 percent. The branch acquisition extends Citizens’ physical presence to several attractive markets and adds approximately 800 thousand new customers.
“This transaction provides us with an attractive entry into the important New York City Metro, Washington D.C. and Southeast Florida markets,” said Chairman and CEO Bruce Van Saun. “With a sizable customer base and a solid deposit franchise, this acquisition will serve as a springboard for our consumer national expansion strategy. In addition, the $7 billion net deposit position provides us significant long-term funding flexibility in support of our attractive loan growth opportunities.”
“We are excited to welcome the HSBC employees and customers to Citizens,” said Brendan Coughlin, Citizens Head of Consumer Banking. “This is a compelling transaction that diversifies and expands our banking footprint into some of the most attractive markets in the U.S. It complements our existing franchise and helps advance our digital-first national expansion strategy, giving us a strong foundation to drive further growth and gain scale. We look forward to serving these new customers and showing them all that Citizens can do for them.”
The 80 branch purchase includes 66 locations in the New York City Metro area, 9 locations in the Mid-Atlantic/Washington D.C. area, and 5 locations in Southeast Florida. The branches to be acquired will operate as HSBC branches until closing and will be re-branded as Citizens branches immediately upon closing of the transaction. This transaction is expected to close in the first quarter of 2022, subject to customary closing terms and conditions and regulatory approvals.
Morgan Stanley & Co., LLC served as financial advisor and Debevoise & Plimpton LLP served as legal counsel to Citizens.
Additional Information
A presentation providing additional information on the transaction is available at https://investor.citizensbank.com/about-us/investor-relations/events-and-presentations/2021.aspx
About Citizens Financial Group, Inc.
Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $187.2 billion in assets as of March 31, 2021. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a 24/7 customer contact center and the convenience of approximately 3,000 ATMs and approximately 1,000 branches in 11 states in the New England, Mid-Atlantic and Midwest regions. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers a broad complement of financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, interest rate and commodity risk management solutions, as well as loan syndication, corporate finance, merger and acquisition, and debt and equity capital markets capabilities. More information is available at www.citizensbank.com or visit us on Twitter, LinkedIn or Facebook.
