The cash and stock deal, which is expected to close in the first half of next year, will increase Citizens' deposits by $20 billion. Citizens earlier this year agreed to buy HSBC Holdings Plc’s East Coast branches, which store more than $9 billion in deposits.
"We refer to this as a one-two punch," Citizens Financial CEO Bruce Van Saun told FOX Business, noting the firm had been looking for ways to "connect the footprint" between its New England and Mid-Atlantic branches.
The deal announced on Wednesday fills that void, giving Citizens an additional 154 branches, 130 of which are in the New York City area. That, in addition to the 66 New York branches that were acquired in the HSBC deal.
Together, the deals add about 1 million customers and make Citizens a top-10 bank in terms of New York City metro area deposits. Additionally, the transaction for Investors gives Citizens 5,000 corporate customers, ranging from small businesses to middle-market firms.
Under the terms of Wednesday’s deal, Investors shareholders will receive 0.297 of a share of Citizens stock and $1.46 in cash for each Investors share they own. The $3.5 billion price tag was an 8.7% premium to Investors’ $3.22 billion market capitalization at Tuesday’s close.
Investors’ shareholders will own 14% of the combined company once the deal closes. Investors CEO Kevin Cummings and board member Michele Siekerka are expected to join Citizens’ board once the deal closes.
Van Saun said that while Citizens is done making bank-oriented transactions as it absorbs its two recent purchases, there is still capacity for something to be done in the mergers and acquisitions boutique space or on the wealth management side.
"We’re continuing to have dialogues," he said.