Aiming to grow its market share in the Chicago area, Citizens Financial Group Inc. is acquiring three community banks in Illinois with total assets of $1.2 billion and converting their 10 branches and 14 ATMs to its Charter One Bank brand.
The deal, announced last week, will make Charter One the greater Chicago area’s fourth-largest commercial bank, by deposits, up from No. 5, said Stephen D. Steinour, president of Citizens Financial Group and the top executive for the Midwest and Mid-Atlantic regions.
Your Business Has Gone Global. Has Your Insurance?
A decade ago, “doing business internationally” was mostly a large-company concern. Today, a manufacturer in…
Learn More
Citizens is buying Lisle, Ill.-based GreatBanc Inc. – the holding company for GreatBank, GreatBank Chicago, and First National Bank – for about $180 million in cash, or about one-eighth the value of its three banks’ deposits. The deal is expected to close in the first quarter of 2007.
“Chicago is an important growth market for us, and the acquisition of GreatBanc will deepen Charter One’s presence throughout Chicago,” said Lawrence K. Fish, chairman and CEO of Citizens Financial Group, in a news release.
Steinour said in an interview that, while GreatBanc is “a relatively small bank in a very large market,” it was attractive to Citizens because “it was a clean bank with very good people” and solid assets. The branch locations worked well with Citizens’ growth strategy, he added.
“We like to be deep in the markets we’re in, and this helps move us up in terms of relative market share,” Steinour said. “There are many, many parts of Illinois we’re not in, but where we are is greater Chicago.”
Charter One, which Citizens acquired in September 2004, has been growing steadily in the Midwest, and it’s already what Steinour called “a budding player” in a few markets – No. 3 in Cleveland, for example. But Citizens has even greater ambitions.
“We clearly would like to be larger in those markets,” Steinour said. Such growth takes time, he said, but Citizens will make it happen. When he joined the bank in 1991, he noted, “we were No. 3” in Rhode Island. Today, Citizens is not only No. 1 in the state, but it has more than 43 percent of deposits in the market.
Citizens Financial Group is a $164 billion company, with more than 1,600 branches in 13 states – plus non-branch offices in about 40 states – and 26,000 employees. It operates as Citizens in most of its footprint, and as Charter One in Illinois, Indiana, Michigan and Ohio.
About 55 percent of Citizens’ holdings are now outside of New England, Steinour said, but this region “continues to be very, very significant and always will be, because of our legacy.” The company, which is owned by the Royal Bank of Scotland, still has its headquarters in Providence, along with a substantial presence in Boston.
In a news release about the deal, Roger L. Weston, chairman and CEO of GreatBanc, said Charter One “is a unique institution, combining the products and offerings of a large institution with the services and management of an outstanding community bank.”
As a result, Weston said, the acquisition is “a win-win for everyone.”
The deal is subject to several conditions, including regulatory approval.
