CIT Group
CIT Group Inc. is a financial holding company and bank holding company incorporated in Delaware and headquartered in New York City. CIT Bank, N.A., CIT's banking subsidiary, is headquartered in Pasadena, California. The company's name is an initialism of an early corporate name, Commercial Investment Trust.
CIT provides financing, leasing, and advisory services principally to middle-market companies and small businesses in a wide variety of industries, primarily in North America. CIT also provides banking and related services to commercial and individual customers through its banking subsidiary, CIT Bank, N.A., which includes over 60 branches located in Southern California and an online bank.
As of 2018, the company is ranked 658th on the Fortune 1000 list of the largest American companies and is in the top 50 on the list of largest banks in the United States.
CIT filed for bankruptcy protection on November 1, 2009, and with the consent of its bondholders, emerged from bankruptcy 38 days later, on December 10, 2009. In August 2015, CIT Group acquired OneWest Bank, a regional bank based in Southern California.
CIT is regulated by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of
New York under the U.S. Bank Holding Company Act of 1956.
Current operations
CIT manages its business and reports its financial results in three operating segments: Commercial Banking, Consumer Banking, and Non-Strategic Portfolios.Commercial Banking
CIT's Commercial Banking provides a range of lending, leasing and deposit products, as well as ancillary products and services, including factoring, cash management, and advisory services, primarily to small and medium-sized companies, as well as to the rail industry. The segment consists of four divisions:Commercial Finance
Provides commercial lending and deposit products, as well as cash management and advisory services, primarily to small and middle market companies. The division provides financing, treasury management, and capital markets products in a wide range of industries, including aerospace and defense, aviation, communication, energy, entertainment, gaming, healthcare, industrials, maritime, restaurants, retail, services, and technology.Real Estate Finance
Originates and underwrites senior secured commercial real estate transactions for single properties, property portfolios and loan portfolios. The division focuses on properties with a stable cash flow, provides financing to reposition existing properties, and originates construction loans to highly experienced and well capitalized developers.Rail
Leases locomotives and freight cars to various railroads and shippers in North America that need them. It operates by the reporting mark CEFX.Business Capital
Provides leasing and equipment financing to small businesses and middle market companies on both an indirect and direct basis. Additionally, the division provides factoring, receivable management, and secured financing to businesses across several industries.- Indirect: assists manufacturers and distributors in growing sales, profitability, and customer loyalty by providing customized, value-added finance solutions.
- Direct: provides financing solutions to its borrowers and lessees.
Consumer Banking
Retail Banking
Retail Banking is the primary deposit gathering business of CIT Bank and operates through a network of retail branches in Southern California, through its OneWest Bank division, and an online direct channel.Consumer Lending
Offers conforming and jumbo residential mortgage loans, primarily in Southern California.SBA Lending
Originates qualified Small Business Administration loans.Non-Strategic Portfolios ("NSP")
CIT's NSP segment includes businesses and portfolios the company no longer considers strategic.History
Founding and Early History
On February 11, 1908, Henry Ittleson founded the Commercial Credit and Investment Company in St. Louis, Missouri.In 1915, the company moved its headquarters to New York City and renamed itself Commercial Investment Trust and went by the initials of C.I.T. By that time, the company provided financing for wholesale suppliers and producers of consumer goods. The company added automobile financing to its product line in 1916, through an agreement with Studebaker, the first of its kind in the auto industry. During World War I, CIT financed the manufacture of 150 submarine chasers. It also added consumer financing of radios through an agreement with Thomas Edison, Inc. During the Roaring 20s following the war, consumer spending rose dramatically and CIT prospered in its consumer appliance, furniture, and automobile financing groups. In 1924, CIT incorporated in Delaware and listed its stock on the New York Stock Exchange. CIT entered the field of factoring in 1928 and expanded operations into Europe in 1929.
With international tensions rising prior to World War II, CIT closed its German operations in 1934. Arthur O. Dietz succeeded Ittleson as president of the company in 1939. During the war, CIT offered its 2000 employees a month's bonus, life insurance, and a guaranteed job on return if they served in the United States Armed Forces. Between 1947 and 1950, the company's net income rose from $7.3 million to $30.8 million. Ittleson died at age 77 on October 27, 1948.
1950s - 1990s
The company moved into a new building at 650 Madison Avenue in Manhattan in 1957. In 1960, Walter Lundell succeeded Dietz as president of the company. Five years later, in 1959, the company passed $100 billion in financing volume since its founding. The Vietnam War racial turmoil of the 1960s resulted in CIT making changes to its business. In 1969, CIT entered the personal and home equity loan and leasing business and left auto financing. In 1979, restrictive banking rules forced CIT to sell its bank, National Bank of North America. CIT was acquired by RCA Corporation in 1980. RCA promptly sold CIT's four manufacturing businesses: Picker X-Ray, Inc., Gibson Greeting Cards, Inc., All-Steel, Inc., and Raco, Inc. The Madison Avenue building was sold in 1982 as the company moved to a newly constructed headquarters facility in Livingston, New Jersey in 1983.In 1984, CIT was sold to Manufacturers Hanover Trust. In 1989, Manufacturers Hanover Trust sold 60% of CIT to Dai-Ichi Kangyo Bank of Japan.
In 1991, the company acquired Fidelcor Business Credit Corporation, which increased its services to small businesses. In 1992, CIT opened 15 new offices in 7 states.
In 1997, the company became a public company via an initial public offering that raised $850 million.
On November 15, 1999, CIT acquired Toronto-based Newcourt Credit Group in a $4.2 billion transaction, which created one of the largest publicly owned leasing companies.
Early 2000s
In 2000, CIT announced record earnings of $611.6 million, an increase of 57.1% from the prior year, which was largely attributed to the acquisition of Newcourt the year before.: CIT Group's Headquarters in New York City|alt=In 2001, Tyco acquired CIT for $9.2 billion in stock. CIT was renamed as Tyco Capital.Tyco ran into operating troubles and sold or spun off non-core operations, including CIT. On July 8, 2002, Tyco completed its divestment of its Tyco Capital business through an initial public offering, via the sale of 100% of the common shares in CIT Group Inc.
In 2006, CIT moved its global headquarters back to New York City, opening a new headquarters at 11 West 42nd Street, across from the New York Public Library. CIT retained its Livingston campus as its corporate headquarters.
Under the leadership of CEO Jeff Peek, assets at CIT jumped 77% from 2004 to the end of 2007 as it acquired companies in education lending and subprime mortgages. Those acquisitions turned out to be disastrous for the company and in the following eight quarters, CIT reported more than $3 billion in losses.
[Great Recession]
On July 1, 2008, CIT Group announced that it would sell its home lending division to Lone Star Funds for $1.5 billion in cash and the assumption of $4.4 billion in debt and announced that it would sell its manufactured housing loan portfolio, with a face value of $470 million in loans, to Vanderbilt Mortgage and Finance for approximately $300 million.In 2008, CIT became a bank holding company in order to receive $2.3 billion in Troubled Asset Relief Program funds.
On July 15, 2009, CIT's request for Federal Deposit Insurance Corporation loan guarantees was rejected. At 6:03 PM, the company issued a press release stating that talks of a government bailout were unlikely and that the company had been advised that there was "no appreciable likelihood of additional government support being provided over the near term" and that it was very close to declaring bankruptcy.
On July 19, 2009, the company received a bailout via a $3 billion deal via an agreement with the bondholders group, which included Pacific Investment Management Company and other large bond holders. CIT said it planned a comprehensive restructuring of its liabilities.
Effective July 24, 2009, CIT was removed from the S&P 500 Index.
Bankruptcy and Reorganization
On Sunday, November 1, 2009, CIT Group filed for bankruptcy protection under Chapter 11.On December 10, 2009, CIT satisfied all of the conditions required to consummate the prepackaged Plan of Reorganization, which included the cancellation of existing debt and shares and the issuance of new debt and publicly traded shares.
As part of the reorganization plan, CIT named seven new independent directors. On January 19, 2010, Peter J. Tobin, a member of the board of directors, was named interim Chief Executive Officer, replacing Jeff Peek, who resigned effective January 15, 2010. On February 8, 2010, former Merrill Lynch CEO John Thain was hired as chairman and Chief Executive Officer.
OneWest Bank Acquisition
On July 22, 2014, CIT Group announced an agreement to acquire OneWest Bank for $3.4 billion in cash and stock. OneWest Bank was established on March 19, 2009 by IMB Holdco, a holding company owned by a consortium of private equity investors led by Steven Mnuchin.The California Reinvestment Coalition was concerned about the possibility of the FDIC's loss-sharing agreement with OneWest being transferred to CIT Group and the growth of a bank that is considered too big to fail and so it filed a Freedom of Information Act request in October 2014 seeking information about the amount of money paid out to OneWest's investors under the loss-share agreement and what conversations FDIC staff have had with the leadership of OneWest Bank and CIT Group. On July 21, 2015, the Office of the Comptroller of the Currency and the Federal Reserve approved CIT Group's acquisition of OneWest Bank. The acquisition closed on August 3, 2015.
2016 to Present
In March 2016, CEO John Thain stepped down and was succeeded by Ellen Alemany, a member of the board of directors. Alemany previously led the Royal Bank of Scotland’s businesses in the Americas and also held various titles at Citigroup.Upon taking the roles of CEO in April 2016 and chairwoman in May 2016, Alemany began simplifying the company by having lending and deposit-gathering be its focus and divesting from its riskier, non-core businesses.
In April 2017, the company sold its aircraft lease business to Avolon for $10.38 billion. In October 2017, the company sold Financial Freedom, acquired as part of the acquisition of OneWest Bank, and its reverse mortgage portfolio. In October 2018, the company sold its European rail leasing business, NACCO, which was its last overseas operation.
In 2020, CIT completed the acquisition of Mutual of Omaha Bank.
CEO-to-worker pay ratio
Pursuant to Section 953 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, publicly traded companies are required to disclose the median total annual compensation of all employees other than the CEO and the ratio of the CEO’s annual total compensation to that of the median employee.Total 2018 compensation for Ellen Alemany, CEO, amounted to $8,961,198, and total compensation of the median employee was determined to be $93,605. The resulting pay ratio is estimated to be 96:1.