CIT Group Inc. has announced that its banking subsidiary CIT Bank N.A. will acquire Mutual's savings bank subsidiary, Mutual of Omaha Bank, for $1 billion.
According to the companies, the purchase price will be comprised primarily of cash and up to $150 million of CIT common stock. The transaction is expected to close in the first quarter of 2020, and the agreement excludes Mutual's mortgage subsidiary, Synergy One Lending, which the company acquired last year.
The acquisition is the first major transaction for CIT Group since its sale of its Financial Freedom reverse mortgage servicing business and the related reverse mortgage portfolio to an undisclosed buyer in June 2018.
“Following our multi-year strategic transformation, we entered the next phase of our plan focused on thoughtful growth and value creation,” said CIT Group Chairwoman and CEO Ellen R. Alemany. “This transaction squarely aligns to those goals by immediately enhancing our deposit and commercial banking capabilities and improving our profitability. This is a unique opportunity to accelerate our strategic plan through the addition of a market-leading HOA deposit franchise, a broader set of product and technology solutions and an expanded business footprint that complements CIT's existing franchise.”
Mutual of Omaha Chairman and CEO James Blackledge added that the sale will allow his company to “focus on, and invest in, growth in its core insurance businesses.”