|Traded as||NYSE: CIT|
11 West 42nd Street,|
New York City, United States
Ellen R. Alemany|
(Chairwoman and CEO)
|Revenue||US$ 3.624 billion (2014)|
|US$ 1.13 billion (2014)|
|Total assets||US$ 67.5 billion (2016)|
|Total equity||US$ 9.06 billion (2014)|
CIT Group Inc. is an American financial holding company founded in 1908 with more than $65 billion in finance and leasing assets. The company's name is an abbreviation of an early corporate name, Commercial Investment Trust. It provides financing and leasing capital to its middle market clients and their customers across more than 30 industries. CIT maintains leadership positions in middle market lending, factoring, retail finance, aerospace, equipment and rail leasing, and global vendor finance. CIT also operates CIT Bank (Member FDIC), BankOnCIT.com, its primary bank subsidiary, which offers a suite of online savings options designed to help customers achieve a range of financial goals.
The company is part of the Fortune 500 and was a part of the S&P 500 Index until it was replaced by Red Hat at the close of trading July 24, 2009. The company is headquartered in New York City, and employs approximately 3,700 people in locations throughout North America, Europe, Latin America, and Asia Pacific. It declared Chapter 11 bankruptcy on November 1, 2009, and with the consent of its bondholders proposed to quickly emerge from bankruptcy court proceedings. The company emerged from bankruptcy 38 days later on December 10, 2009.
- CIT Commercial Services is one of the nation’s leading providers of factoring and financing to consumer product companies. It provides credit protection, accounts receivable management and asset-based lending to manufacturers and importers.
- CIT Commercial Finance provides lending, leasing and other financial and advisory services to the small business and middle market sectors, with a focus on specific industries, including: Business Services, Commercial Real Estate, Communications, Energy, Entertainment, Gaming, Healthcare, Industrials, Information Services & Technology, Restaurants, Retail, and Sports & Media.
- Equipment Finance is involved in providing financing programs for manufacturers, distributors, product resellers and other intermediaries that enable their customers to acquire products now and finance payments over time. CIT maintains relationships with leading companies primarily in the information technology, telecommunications and office equipment industries while providing equipment leasing and financing to small and middle market businesses across all industries.
- Transportation Finance is a leading global aircraft lessor and the third largest U.S. railcar lessor. It also provides lending and leasing services to the transportation industry, principally the aerospace and rail sectors.
Consumer & Community Banking
- CIT operates CIT Bank, which is Federal Deposit Insurance Corporation (FDIC) insured and operates BankOnCIT.com, a separate website.
On February 11, 1908, Henry Ittleson founded the Commercial Credit and Investment Company in St. Louis, Missouri.
In 1915 it moved to New York City and renamed itself Commercial Investment Trust and went by the initials of C.I.T. It remains in New York City today. 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 itself 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. From 1947 to 1950, the company's net income rose from $7.3 million to $30.8 million — $303 million in recent terms. Ittleson died at age 77 on October 27, 1948.
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 ($813 billion in recent terms) 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. (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. The address of the new headquarters was 650 CIT Drive, after the old 650 Madison Avenue address.
Manufacturers Hanover and Dai-Ichi
As Dai-Ichi Kangyo Bank ran into troubles within its core operations, it sold off non-core assets, including CIT, which in 1997 was carved out as a separate company and re-listed on the New York Stock Exchange.
On November 15, 1999, CIT acquired Toronto-based Newcourt Credit Group Inc. ("Newcourt") for approximately US$2.52 billion to create one of the largest publicly owned leasing companies. The following year 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. On March 13, 2001 Tyco announced that it was buying CIT for about $9.2 billion in stock. After the closing, CIT became the principal operating subsidiary of Tyco's Tyco Capital business. CIT's Livingston address was changed to 1 Tyco Drive.
Tyco ran into its own 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. As an independent public company, CIT changed its Livingston address to 1 CIT Drive from 1 Tyco Drive.
CIT moved its global headquarters back to New York City, opening a brand-new headquarters in 2006 across from the New York Public Library. The last time that it was headquartered in New York City had been back in 1983. CIT retained its Livingston campus as its corporate headquarters.
Under the leadership of its new 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.
On July 1, 2008, CIT Group announced that it would be selling its home lending division to Lone Star Funds for $1.5 billion in cash in addition to the $4.4 billion in debt the company held. CIT said it would concentrate on its commercial pursuits due to the decline in housing and mortgage markets of the past year. CIT also planned to sell their manufactured housing portfolio Vanderbilt Mortgage and Finance Inc. for approximately $300 million, although it held a value of $470 million.
Late 2000s financial crisis
On July 13, 2009, Bloomberg TV reported that CIT was asking for Federal Deposit Insurance Corporation loan guarantees.
On July 15, 2009, the common stock of CIT was halted on the New York Stock Exchange during trading hours with "News Pending". At 6:03 pm a press release was issued on the company's website stating that talks of a government bailout were unlikely. The company had been advised that there was "no appreciable likelihood of additional government support being provided over the near term." CIT announced that it believed it was unlikely that it would receive further funding from the federal government, and CIT Group came very close to declaring bankruptcy. It was rescued in a US$3 billion deal on July 19, 2009, via an agreement with the bondholders group, which included Pacific Investment Management Company (PIMCO) and some other top CIT holders. CIT said it planned a comprehensive restructuring of its liabilities.
On September 30, 2009, in its continuing struggle to avoid bankruptcy, CIT Group was reported to be in negotiations with Citigroup Inc., Barclays Capital, and its bondholders to secure rescue financing to comply with its filing to find a plan “acceptable” to the majority of a bondholder steering committee that provided it with the emergency cash by Oct. 1.
On Sunday, November 1, 2009, CIT Group filed for Chapter 11 bankruptcy protection. It filed in the United States Bankruptcy Court for the Southern District of New York along with CIT Group Funding Company of Delaware LLC.
On December 10, 2009, CIT satisfied all of the conditions required to consummate the prepackaged Plan of Reorganization (the "Plan"). The distribution of CIT's new debt and equity securities took place in accordance with the Company's confirmed Plan and the new common stock commenced trading on the New York Stock Exchange (NYSE) under the symbol "CIT." All previously issued and outstanding common stock and preferred stock was cancelled.
As part of the reorganization plan, CIT named seven new independent directors. Peter Tobin, a current Board member, was named interim Chief Executive officer beginning in January 2010, replacing Jeff Peek, who resigned following the Company’s emergence from bankruptcy. Soon afterward, the Board appointed former Merrill Lynch CEO John Thain as its new chairman and Chief Executive.
In commenting on his new role, Thain summarized the opportunity he believed faced CIT: “CIT’s numerous market-leading positions are evidence of the resiliency of the franchise and its unwavering commitment to its customers. We will continue to work even harder to support small and mid-market businesses. CIT can and will serve an important role in the recovery of the U.S. economy and the creation of jobs.” With Thain at the helm, the remainder of 2010 and first half of 2011 witnessed CIT’s Executive Management Team and its board of directors making strategic moves to further position CIT as a market leader.
Banking model, cleaning up bad debt, new acquisition
S&P boosted the firm (CIT) to BB- on March 9, 2012, three levels below investment grade. CIT has “shifted towards a more bank-centric business model: It has repaid or refinanced a material portion of its high-cost debt, increased deposits, and moved many U.S. originations to its commercial bank subsidiary, CIT Bank,” analysts Brendan Browne and Rian Pressman said in an April 16, 2012 report.‘
In the summer of 2014, CIT Group announced a proposal to purchase OneWest Bank, headquartered in Pasadena, California. Community organizations are concerned about the possibility of the FDIC's loss-sharing agreement with OneWest also being transferred to CIT Group. Advocates are also concerned about another bank that would be considered too big to fail. The California Reinvestment Coalition filed a FOIA request in October 2014. The FOIA request seeks information about the amount of money already 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.
Board of directors
- Red Hat to join S&P 500 Archived July 21, 2009, at the Wayback Machine.
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- The CIT Story Archived September 4, 2007, at the Wayback Machine., accessed September 8, 2007
- August 6, 1999 Wall Street Journal
- January 25, 2001 CIT press release
- March 13, 2001 Tyco press release
- 2004 Annual Report, Tyco International Ltd.
- CIT Establishes New York City As Its Global Headquarters.PR NewsWire, June 8, 2005.
- Contact CIT – US & Global Financial Services accessed on March 25, 2009.
- July 14, 1999 bloomberg article
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- CIT clinches deal to stave off bankruptcy (Reuters)
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- de la Merced, Michael J. (November 1, 2009). "CIT Files for Bankruptcy". New York Times. Retrieved 2009-11-01.
- "Commercial lending giant CIT files bankruptcy: Government to likely lose $2.3 billion it spent to prop company up last year". MSNBC. November 1, 2009. Retrieved 2009-11-01.
- CIT Group Inc. (December 10, 2009). "CIT Shares Commence Trading on New York Stock Exchange". CIT Group Inc. Retrieved 2009-12-10.
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- Childs, Mary. "Thain Has High-Grade Mien in CIT Debt Purge: Corporate Finance". bloomberg.com. BloombergBusinessweek. Archived from the original on July 18, 2013. Retrieved August 24, 2012.
- "California Reinvestment Coalition Urges Greater Transparency by Regulators in Merger Creating Too Big to Fail Bank". PRWeb. October 3, 2014. Retrieved August 5, 2015.
- Rachel Louise Ensign (July 21, 2015). "CIT Group Wins Key Federal Approval for Acquisition of OneWest Bank's Parent". WSJ. Retrieved August 5, 2015.
- Retrieved 2016-11-15