CIT Group

Structure

CIT business areas operate under three segments: Commercial Banking, Transportation Finance, and Consumer & Community Banking.

Commercial Banking

Transportation Finance

Consumer & Community Banking

History

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 — $307 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 ($822 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

In 1984, CIT was sold to Manufacturers Hanover Trust. In 1989, Manufacturers Hanover Trust sold sixty percent of CIT to Dai-Ichi Kangyo Bank of Japan.

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.

Tyco International

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.

Relisting

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

In 2008, CIT became a bank holding company in order to qualify for, and ultimately receive $2.3 billion in Troubled Asset Relief Program (TARP) funds.

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.

Bankruptcy

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.

Post-bankruptcy

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.

On July 21, 2015, the Office of the Comptroller of the Currency and the Federal Reserve officially approved CIT Group's acquisition of OneWest Bank. The acquisition closed on August 3, 2015.

Board of directors

As of 2016,the chairman of CIT's board of directors is Ellen R. Alemany.