CIT Group

Not to be confused with Citigroup or CITIC Group.

CIT Group
Company typeSubsidiary
IndustryBanking
Financial services
Founded1908; 117 years ago (1908) in St. Louis, Missouri
FounderHenry Ittleson
Headquarters11 West 42nd Street,
New York, New York, USA
Area served
North America
Key people
Ellen Alemany
(Chairwoman & CEO)
John Fawcett
(CFO)
Robert Rubino
(President of CIT Bank)
ProductsCommercial banking
Retail banking
Asset-based lending
Commercial mortgages
Factoring Locomotive leasing
ParentFirst Citizens BancShares
Websitecit.com
Two CEFX switching locomotives
Logo of CIT Bank
Logo of CIT Bank
Salmon Tower Building: CIT Group's Headquarters in New York City

CIT Group (CIT), a subsidiary of First Citizens BancShares, is an American financial services company. It provides financing, including factoring, cash management, treasury management, mortgage loans, Small Business Administration loans, leasing, and advisory services principally to individuals, middle-market companies and small businesses, primarily in North America. Under the reporting mark CEFX, it leases locomotives and railroad cars to rail transport and shipping companies in North America. It also operates a direct bank. In January 2022, CIT was acquired by First Citizens BancShares.

History

Founding and early history

On February 11, 1908, Henry Ittleson founded the Commercial Credit and Investment Company in St. Louis, Missouri to finance accounts receivable at small companies.[1]

In 1915, the company moved its headquarters to New York City and renamed itself Commercial Investment Trust (CIT). 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 Twenties 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 became a public company via an initial public offering on the New York Stock Exchange. CIT began offering factoring in 1928 and expanded operations into Europe in 1929.[2]

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 2,000 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.[2]

1950s - 1990s

In 1957, the company moved into a new building at 650 Madison Avenue in Manhattan. In 1958, to diversify, the company acquired Picker X-Ray Corporation, maker of X-ray and radiation equipment, for $1.9 million.[3] In 1960, Walter Lundell succeeded Dietz as president of the company. In 1964, it acquired Gibson Greeting Cards for $36 million.[4] In 1965, it acquired Meadow Brook Bank for $106.7 million in stock.[1] 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. (office furniture), and Raco, Inc. (wall boxes for electric switches and outlets.) The Madison Avenue building was sold in 1982 as the company moved to a newly constructed headquarters facility in Livingston, New Jersey in 1983.[2]

In 1984, CIT was sold to Manufacturers Hanover Trust.[2] In 1989, Manufacturers Hanover Trust sold 60% of CIT to Dai-Ichi Kangyo Bank of Japan.[2]

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.[2]

In 1997, the company became a public company via an initial public offering that raised $850 million.[2][5]

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.[6][7]

Early 2000s

In 2001, Tyco acquired CIT for $9.2 billion in stock.[8][9][10] CIT was renamed as Tyco Capital.[11]

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.[12][13]

In 2004, the company acquired the technology-leasing unit of GATX for about $200 million in cash.[14]

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.[15]

Under the leadership of CEO Jeff Peek, assets at CIT rose 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.[16]

Bankruptcy and reorganization

On July 1, 2008, the company announced the sale of its home lending division to Lone Star Funds for $1.5 billion in cash and the assumption of $4.4 billion in debt and the sale of its manufactured housing loan portfolio, with a face value of $470 million in loans, to Vanderbilt Mortgage and Finance for approximately $300 million.[17][18]

In December 2008, CIT became a bank holding company to receive $2.33 billion in funds from the Troubled Asset Relief Program (TARP).[19]

On July 15, 2009, CIT's request for Federal Deposit Insurance Corporation loan guarantees was rejected.[20][21][22][23]

On July 19, 2009, the company received $3 billion from its bondholders including Pacific Investment Management Company (PIMCO) to delay bankruptcy.[24][25][26]

On November 1, 2009, CIT filed a prepackaged bankruptcy under Chapter 11.[27][28][29][30][31]

On December 10, 2009, CIT emerged from bankruptcy protection.[32]

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.[33] On February 8, 2010, former Merrill Lynch CEO John Thain was hired as chairman and chief executive officer.[34]

In June 2014, the company acquired Direct Capital.[35]

OneWest Bank Headquarters in Pasadena, California

On August 3, 2015, CIT Group acquired OneWest Bank,[36] established in 2009 by a consortium of private equity investors led by Steven Mnuchin, for $3.4 billion in cash and stock.[37]

2016 to present

In March 2016, CEO John Thain retired and was succeeded by Ellen Alemany, a member of the board of directors.[38][39]

In April 2017, the company sold its aircraft lease business to Avolon for $10.38 billion.[40][41]

In October 2017, the company sold Financial Freedom, acquired as part of the acquisition of OneWest Bank, and its reverse mortgage portfolio.[42]

In October 2018, the company sold its European rail leasing business, NACCO, which was its last overseas operation.[43]

In January 2020, CIT acquired Mutual of Omaha Bank.[44][45]

In January 2022, CIT was acquired by First Citizens BancShares.[46]

References

  1. ^ a b Arenson, Karen W. (July 27, 1979). "C.I.T. Likes to Take Its Time". The New York Times.
  2. ^ a b c d e f g "CHRONOLOGY: A century of CIT, from St Louis to New York". Reuters. November 1, 2009.
  3. ^ "C. I. T. Acquires Picker X-Ray In Move Toward Diversification; Purchase Price Is About $1,900,000 Hartford Insurance Eyes Merger With Columbian National Life COMPANIES PLAN SALES, MERGERS". The New York Times. August 2, 1958.
  4. ^ "C.I.T. PURCHASES GIBSON GREETING; Financing Concern Getting Oldest Card Producer". The New York Times. January 10, 1964.
  5. ^ REEVES, SCOTT (December 15, 1997). "Best and Worst". Barron's.
  6. ^ Greenberg, Larry M.; Zuckerman, Gregory (March 9, 1999). "CIT to Acquire Newcourt Credit In Stock Deal for $4.12 Billion". The Wall Street Journal.
  7. ^ "Credit gambit: CIT Group Inc. agreed to acquire Newcourt". Chicago Tribune. March 8, 1999.
  8. ^ "Tyco buying CIT for $9.2B". CNN. March 13, 2001.
  9. ^ Deogun, Nikhil; Lipin, Steven; Maremont, Mark (March 13, 2001). "Tyco International to Acquire CIT Group for $9.2 Billion". The Wall Street Journal.
  10. ^ Chin, Spencer (March 13, 2001). "Tyco set to acquire finance company CIT". EE Times.
  11. ^ "Tyco calls its plans to split up "a mistake'". Tampa Bay Times. September 3, 2005.
  12. ^ "Tyco raises $4.6-billion in CIT spinoff". The Globe and Mail. Bloomberg News. July 2, 2002.
  13. ^ Maremont, Mark (July 24, 2002). "Tyco Posts $2.32 Billion Loss, Cites Downturn, CIT Spinoff". The Wall Street Journal.
  14. ^ "COMPANY NEWS; CIT TO BUY LEASING UNIT FROM GATX FOR ABOUT $200 MILLION". The New York Times. Bloomberg News. April 16, 2004.
  15. ^ "CIT Opens New Global Headquarters in New York City" (Press release). PR Newswire. April 27, 2006.
  16. ^ Creswell, Julie (May 4, 2008). "A Lender Gets Caught in the Currents". The New York Times.
  17. ^ "CIT Sells Home Loan Business to Lone Star". The New York Times. July 1, 2008.
  18. ^ Comlay, Elinor (July 1, 2008). "CIT to shed $10 billion mortgage assets". Reuters.
  19. ^ Taub, Stephen; Harris, Roy (December 23, 2008). "CIT to Qualify for $2.33B in TARP Funds". CFO. Archived from the original on January 6, 2022. Retrieved January 6, 2022.
  20. ^ de la Merced, Michael J. (July 15, 2009). "CIT Says It Won't Get More US Aid". The New York Times.
  21. ^ Barr, Colin (July 15, 2009). "CIT: No bailout for us". Fortune.
  22. ^ Appelbaum, Binyamin (July 16, 2009). "CIT Group Closer to Bankruptcy as U.S. Denies Aid". The Washington Post.
  23. ^ Jones, Sandra M. (July 15, 2009). "CIT Group's troubles could weigh heavily on retailers this holiday season". Los Angeles Times.
  24. ^ Bansal, Paritosh (July 19, 2009). "CIT clinches deal to stave off bankruptcy". Reuters.
  25. ^ "CIT Group Confirms $3 Billion Financing Deal". CNBC. Associated Press. July 20, 2009.
  26. ^ DE LA MERCED, MICHAEL J. (July 20, 2009). "CIT to Avert Bankruptcy With $3 Billion Loan". The New York Times.
  27. ^ "CIT files for 5th largest U.S. bankruptcy". CNN. November 1, 2009.
  28. ^ de la Merced, Michael J. (November 1, 2009). "CIT to Test Speed of Bankruptcy Court". The New York Times.
  29. ^ "Commercial lending giant CIT files bankruptcy". NBC News. Associated Press. November 1, 2009.
  30. ^ "CIT Group Chapter 11 Petition" (PDF). PacerMonitor. November 1, 2009.
  31. ^ "CIT Leaves Bankruptcy, With Questions". The New York Times. December 10, 2009.
  32. ^ Lagorio, Juan (December 10, 2009). "CIT shares rise as company emerges from bankruptcy". Reuters.
  33. ^ "CIT Names Director Peter J. Tobin Interim Chief Executive Officer" (Press release). Business Wire. January 19, 2010.
  34. ^ "Former Merrill chief tapped to head CIT". CNN. February 8, 2010.
  35. ^ "CIT Agrees to Acquire Technology-Driven Lender Direct Capital" (Press release). Business Wire. June 24, 2014.
  36. ^ "CIT Completes Acquisition of OneWest Bank" (Press release). Business Wire. August 3, 2015.
  37. ^ Chernikoff, Helen (March 19, 2009). "OneWest completes acquisition of Indymac Assets". Reuters.
  38. ^ Ensign, Rachel Louise; Rudegeair, Peter (October 21, 2015). "John Thain to Retire as CIT CEO". The Wall Street Journal.
  39. ^ "John Thain of CIT Group Will Step Down as Chief Executive". The New York Times. October 22, 2015.
  40. ^ "Avolon Completes US$10.38 Billion Acquisition of CIT Group Aircraft Leasing Business" (Press release). Business Wire. April 4, 2017.
  41. ^ Broughton, Kristin (September 26, 2017). "How Ellen Alemany is reinventing CIT". American Banker.
  42. ^ "CIT Reaches Agreement to Sell Financial Freedom and Reverse Mortgage Portfolio" (Press release). PR Newswire. October 6, 2017.
  43. ^ "CIT Completes Sale of its European Rail Business". PR Newswire. October 5, 2018.
  44. ^ "CIT buys Mutual of Omaha Bank for $1 billion". HousingWire. January 2, 2020.
  45. ^ "CIT Completes Acquisition of Mutual of Omaha Bank" (Press release). PR Newswire. January 2, 2020.
  46. ^ "First Citizens Completes Merger With CIT Group" (Press release). PR Newswire. January 4, 2022.
  • Official website
    • Historical business data for CIT Group Inc.:
    • SEC filings

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