and short-term bank deposit ratings of A3 and Prime-2, respectively, and
a standalone bank financial strength of C, mapping to a standalone
baseline credit assessment of a3. The rating outlook is stable. First
referred to as 'First Citizens'). The rating affirmation follows First
Citizens' announcement that it has entered into an agreement to acquire
Affirmations with Stable Outlook:
.... Adjusted Baseline Credit Assessment, Maintained a3
.... Baseline Credit Assessment, Maintained a3
.... Bank Financial Strength Rating, Affirmed C
.... Issuer Rating, Affirmed A3
....Deposit Ratings, Affirmed A3/P-2
....OSO Ratings, Affirmed A3/P-2
....Subordinate Regular Bond/Debenture, Affirmed Baa1
....Outlook, Remains Stable
The affirmation of First Citizens' ratings with a stable outlook was
based on Moody's view that integration risk is low despite the fact that
First Citizens is acquiring a company that is nearly 40% of its size.
Moody's also expects the acquisition of
will not weaken First Citizens' sound credit fundamentals.
Moody's said there are a number of important elements making the
integration risk lower than average for an acquisition of this size.
Firstly, First Citizens has good knowledge of First Citizens
Bancorporation through its common ownership interests by the Holding
family. Also, it has already acquired familiarity in First Citizens
Bancorporation's operation because most data processing has been
outsourced to First Citizens. Moody's added that both banks have a
relatively simple business model of taking deposits and originating loans
to hold on their balance sheets. Additionally, the acquired branches are
primarily located in contiguous markets.
Moody's said that
profile as First Citizens and the rating agency expects the pro-forma
financial metrics of the combined company to remain solid upon closing.
liquidity metrics are better than those of First Citizens'. Moody's did
note that the acquired company's asset quality ratios are comparatively
weaker than First Citizens', but they are still relatively strong.
Moody's also expects First Citizens' pro-forma capital to remain
comparatively high as the transaction is priced conservatively and will
be financed principally by common share issuance.
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