{"id":1004100970,"date":"2014-07-23T05:54:35","date_gmt":"2014-07-23T13:54:35","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004100970"},"modified":"2022-12-08T18:55:03","modified_gmt":"2022-12-09T02:55:03","slug":"cit-to-buy-onewest-bank-for-3-4b","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/cit-to-buy-onewest-bank-for-3-4b\/","title":{"rendered":"CIT to Buy OneWest Bank for $3.4B"},"content":{"rendered":"

By Gail Kalinoski, Contributing Editor<\/i><\/p>\n

\"John<\/a>

John Thain, CIT<\/p><\/div>\n

Calling it a \u201ctransformational transaction,\u201d CIT Group Inc. chairman & CEO John Thain said the New York-based commercial lender would more than double in size if the planned $3.4 billion acquisition of Southern California\u2019s OneWest Bank, N.A. is approved by federal regulators.<\/p>\n

The plan calls for CIT Bank, CIT\u2019s banking subsidiary, to merge with IMB Holdco L.L.C., the parent company of OneWest Bank, N.A. in a cash and stock deal that would give the combined CIT Bank $67 billion in assets and $28 billion in total deposits. Thain, who will remain as CIT chairman & CEO, said the deal would likely close in the first or second quarter of 2015.<\/p>\n

\u201cThis transformational transaction will combine CIT\u2019s national middle market lending platform with OneWest\u2019s wholesale lending and branch banking franchise to create a unique provider of retail and institutional financial services,\u201d Thain said in a news release.<\/p>\n

OneWest Bank has 73 branches in Southern California, most in the greater Los Angeles area. The privately owned regional bank was formed in 2009 after an investors group led by Steven Mnuchin, a former Goldman Sachs Group Inc. executive, acquired the banking operations of the failed IndyMac Federal Bank. Other investors in OneWest Bank included Michael Dell, George Soros and John Paulson, according to the Los Angeles Times.<\/p>\n

Mnuchin, chairman of IMB Holdco, is expected to join CIT Group as vice chairman and also become a member of its Board of Directors. Alan Frank, an independent director from OneWest Bank, will also join the CIT board. Joseph Otting, president & CEO of OneWest Bank, will become co-president of CIT and president & CEO of CIT Bank. He will share the co-president duties with CIT\u2019s Nelson Chai, who is also president of NA Commercial Finance for CIT.<\/p>\n

\u201cWe have spent the last five years building OneWest Bank into a premier regional bank in Southern California. We are confident that this transaction will provide our retail and commercial customers with access to the broad range of high-quality financial products and services offered by CIT, and allow OneWest to benefit from CIT\u2019s expansive client base and global reach,\u201d Mnuchin said in the joint announcement Tuesday.<\/p>\n

Under the agreement, IMB Holdco shareholders would receive $2 billion in cash and 31.3 million shares of CIT Group Inc. common stock currently valued at $1.4 billion assuming a CIT stock price of $44.33.<\/p>\n

The announcement sent CIT stock up $4.76, or nearly 11 percent, to $48.71 at the end of the trading day Tuesday.<\/p>\n

\u201cThe transaction diversifies and lowers the cost of CIT\u2019s deposits, broadens the products we can offer to our middle-market clients, is accretive to earnings and return on equity, and accelerates the utilization of our NOL, while maintaining a strong capital position,\u201d Thain noted in the release.<\/p>\n

The merger is expected to increase CIT earnings per share by 20 percent in 2016.<\/p>\n

In a separate announcement Tuesday, CIT also said its board had approved the repurchase of up to $500 million of common stock through June 30, 2015.<\/p>\n

Several analysts on a conference call with Thain and CFO Scott Parker Tuesday agreed with Thain\u2019s assessment that the planned merger was \u201ctransformational\u201d for CIT. \u00a0Analyst Henry Coffey Jr. of Sterne Agee called it \u201cincredible.\u201d<\/p>\n

Thain, who previously served as chairman & CEO of Merrill Lynch & Co. Inc, and was a former president & COO at Goldman Sachs, said during the conference call that CIT and OneWest complement each other.<\/p>\n

\u201cOur commercial lending businesses fit well together and we have similar credit philosophy,\u201d he said. \u201cWe do have a commercial real estate business. They have a commercial real estate business. But our business is mostly East Coast and their business is mostly West Coast.\u201d<\/p>\n

One addition will be OneWest\u2019s cash management services business. CIT said in an investors\u2019 presentation on its website that \u201cOneWest\u2019s deposit and cash management solutions will enable CIT to serve its existing clients\u2019 cash management needs.\u201d<\/p>\n

The merger will also push CIT past the $50 billion in assets that make it a \u201csystemically important financing institution,\u201d or SiFi, to federal bank regulators. The SiFi staus means more federal oversight and tighter rules for operation, including annual stress tests.<\/p>\n

J.P. Morgan Securities L.L.C. is serving as financial advisor to CIT, and Wachtell, Lipton, Rosen & Katz is CIT\u2019s legal counsel. Goldman, Sachs & Co., Bank of America Merrill Lynch and Cleary, Gottlieb, Steen & Hamilton L.L.P. represent IMB Holdco. Sullivan & Cromwell is joint regulatory counsel for CIT and IMB Holdco.<\/p>\n","protected":false},"excerpt":{"rendered":"

Calling it a \u201ctransformational transaction,\u201d CIT Group Inc. chairman & CEO John Thain said the New York-based commercial lender would more than double in size if the planned $3.4 billion acquisition of Southern California\u2019s OneWest Bank, N.A. is approved by federal regulators.<\/p>\n","protected":false},"author":1068,"featured_media":1004100974,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21783,21742],"tags":[],"class_list":["post-1004100970","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment","category-latest"],"acf":[],"yoast_head":"\nCIT to Buy OneWest Bank for $3.4B - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/cit-to-buy-onewest-bank-for-3-4b\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CIT to Buy OneWest Bank for $3.4B\" \/>\n<meta property=\"og:description\" content=\"Calling it a \u201ctransformational transaction,\u201d CIT Group Inc. chairman & CEO John Thain said the New York-based commercial lender would more than double in size if the planned $3.4 billion acquisition of Southern California\u2019s OneWest Bank, N.A. is approved by federal regulators.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/cit-to-buy-onewest-bank-for-3-4b\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2014-07-23T13:54:35+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T02:55:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2014\/07\/Thain_John_A-.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"375\" \/>\n\t<meta property=\"og:image:height\" content=\"336\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gail Kalinoski\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cit-to-buy-onewest-bank-for-3-4b\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/cit-to-buy-onewest-bank-for-3-4b\/\",\"name\":\"CIT to Buy OneWest Bank for $3.4B - 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