CIT Capital Finance

CIT Group, a subsidiary of First Citizens BancShares, is an American financial services company specializing in providing a wide range of financial solutions. These offerings encompass factoring, cash management, treasury management, mortgage loans, Small Business Administration loans, leasing, and advisory services. CIT primarily caters to individuals, middle-market companies, and small businesses, with a primary focus on North America. The company, known by the reporting mark CEFX, also leases locomotives and railroad cars to rail transport and shipping companies across North America. Furthermore, CIT operates a direct bank. In January 2022, First Citizens BancShares acquired CIT.
== Historical Overview ==
Founding and Early History CIT's roots trace back to February 11, 1908, when Henry Ittleson established the Commercial Credit and Investment Company in St. Louis, Missouri. Its primary purpose was to provide financing for accounts receivable at small companies. In 1915, the company relocated its headquarters to New York City and adopted the name Commercial Investment Trust (CIT). Over the years, CIT expanded its services, offering financing to wholesale suppliers and consumer goods producers. In 1916, it pioneered automobile financing through an agreement with Studebaker, marking a first in the auto industry. During World War I, CIT played a crucial role in financing the manufacture of 150 submarine chasers. The company also ventured into consumer financing for radios through a partnership with Thomas Edison, Inc.
1950s - 1990s CIT thrived in the post-war era, particularly during the Roaring Twenties when consumer spending surged. In 1924, CIT incorporated in Delaware and became a publicly traded company on the New York Stock Exchange. The company introduced factoring in 1928 and expanded its operations into Europe in 1929. With the growing international tensions preceding World War II, CIT ceased its German operations in 1934.
CIT underwent changes in leadership over the years. Arthur O. Dietz succeeded Henry Ittleson as president of the company in 1939. During World War II, CIT provided substantial benefits to its employees who served in the United States Armed Forces. Between 1947 and 1950, the company's net income soared from $7.3 million to $30.8 million. In 1957, CIT moved into a new building at 650 Madison Avenue in Manhattan.
The company diversified its operations by acquiring Picker X-Ray Corporation in 1958, known for its X-ray and radiation equipment. Further expansion came with the purchase of Gibson Greeting Cards in 1964, and Meadow Brook Bank in 1965. In 1969, CIT ventured into personal and home equity loans and leasing, exiting the auto financing sector. However, restrictive banking regulations compelled CIT to sell its bank, National Bank of North America, in 1979.
In 1980, CIT was acquired by RCA Corporation, which subsequently sold CIT's non-core manufacturing businesses: Picker X-Ray, Inc., Gibson Greeting Cards, Inc., All-Steel, Inc., and Raco, Inc. In 1984, Manufacturers Hanover Trust purchased CIT. In 1989, Manufacturers Hanover Trust sold 60% of CIT to Dai-Ichi Kangyo Bank of Japan.
1991 to Early 2000s In 1991, CIT acquired Fidelcor Business Credit Corporation, expanding its services for small businesses. This was followed by the opening of 15 new offices in seven states in 1992. CIT went public through an initial public offering in 1997, raising $850 million.
Notably, in 1999, CIT acquired Newcourt Credit Group in a transaction worth $4.2 billion, creating one of the largest publicly-owned leasing companies.
==== Early 2000s ====
In 2001, CIT was acquired by Tyco for $9.2 billion in stock and was renamed Tyco Capital. However, as Tyco experienced operational challenges, it divested non-core assets, including CIT. In 2002, Tyco completed its divestment of Tyco Capital through an initial public offering.
CIT made further strategic moves in 2004 by acquiring the technology-leasing unit of GATX for approximately $200 million in cash. In 2006, CIT returned its global headquarters to New York City, establishing a new headquarters at 11 West 42nd Street.
Under the leadership of CEO Jeff Peek, CIT significantly increased its assets between 2004 and the end of 2007 by acquiring companies involved in education lending and subprime mortgages. Unfortunately, these acquisitions led to more than $3 billion in losses over the following eight quarters.
== Bankruptcy and Reorganization ==
In 2008, CIT 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. The company also sold its manufactured housing loan portfolio to Vanderbilt Mortgage and Finance for around $300 million. In December 2008, CIT became a bank holding company to receive $2.33 billion from the Troubled Asset Relief Program (TARP). However, in July 2009, CIT's request for Federal Deposit Insurance Corporation loan guarantees was declined.
To avoid bankruptcy, CIT received $3 billion from bondholders, including Pacific Investment Management Company (PIMCO). Nevertheless, on November 1, 2009, CIT filed for bankruptcy under Chapter 11. The company emerged from bankruptcy protection on December 10, 2009.
As part of its reorganization, CIT appointed seven new independent directors. Peter J. Tobin, a member of the board of directors, was named interim chief executive officer in January 2010, replacing Jeff Peek. On February 8, 2010, former Merrill Lynch CEO John Thain was hired as chairman and chief executive officer.
=== 2015 to Present ===
In August 2015, CIT Group acquired OneWest Bank, which was established in 2009 by a consortium of private equity investors led by Steven Mnuchin. The transaction was valued at $3.4 billion in cash and stock.
In March 2016, CEO John Thain retired and was succeeded by Ellen Alemany, a member of the board of directors. The company continued to streamline its operations, selling its aircraft lease business to Avolon for $10.38 billion in April 2017. In October 2017, CIT divested Financial Freedom and its reverse mortgage portfolio, part of the acquisition of OneWest Bank. In October 2018, the company sold its European rail leasing business, NACCO.
The expansion continued in January 2020, with CIT's acquisition of Mutual of Omaha Bank. The latest development occurred in January 2022 when CIT was acquired by First Citizens BancShares.
Category:Companies