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The Story of CIT Group: A Journey of Financial Services and Growth

CEO Khai Intela
Introduction Welcome to the captivating story of CIT Group, an American financial services company with a rich history and a commitment to providing financing and advisory services to individuals, middle-market companies, and small businesses. From...

Introduction

Welcome to the captivating story of CIT Group, an American financial services company with a rich history and a commitment to providing financing and advisory services to individuals, middle-market companies, and small businesses. From its humble beginnings in St. Louis, Missouri, over a century ago, CIT Group has evolved into a powerhouse in the banking industry. Join us as we explore the fascinating journey of this influential institution.

CIT Group Two CEFX switching locomotives

Founding and Early History

In 1908, Henry Ittleson founded the Commercial Credit and Investment Company in St. Louis, Missouri. Its purpose was to provide financing for accounts receivable at small companies. The company later moved its headquarters to New York City and rebranded itself as Commercial Investment Trust (CIT). With a growing reputation for providing financing to wholesale suppliers and producers of consumer goods, CIT expanded its product line to include automobile financing, becoming the first company to do so in the auto industry.

During World War I, CIT played a significant role in the war effort by financing the manufacture of 150 submarine chasers. The company also ventured into consumer financing, forming an agreement with Thomas Edison, Inc. to provide financing for radios. As the Roaring Twenties arrived, CIT experienced tremendous growth in its consumer appliance, furniture, and automobile financing groups. In 1924, CIT became a public company and expanded its operations into Europe in 1929.

1950s - 1990s

The 1950s marked a new era for CIT, as it relocated to a modern building at 650 Madison Avenue in Manhattan. Seeking diversification, the company acquired Picker X-Ray Corporation, a leading manufacturer of X-ray and radiation equipment. CIT continued its expansion by acquiring companies like Gibson Greeting Cards and Meadow Brook Bank.

In the 1970s, CIT entered the personal and home equity loan and leasing business, while divesting its auto financing division to comply with restrictive banking rules. In 1980, CIT was acquired by RCA Corporation, and subsequently, its manufacturing businesses were sold off. To support its growing operations, CIT moved its headquarters to Livingston, New Jersey in 1983.

The 1990s brought further growth and expansion for CIT. The company acquired Fidelcor Business Credit Corporation, broadening its service offerings for small businesses. In 1997, CIT went public, raising $850 million through an initial public offering. In a groundbreaking move, CIT acquired Toronto-based Newcourt Credit Group in 1999, solidifying its position as one of the largest publicly-owned leasing companies.

The Early 2000s

In 2001, CIT faced a significant turning point when it was acquired by Tyco in a $9.2 billion stock deal and renamed Tyco Capital. However, Tyco encountered operational challenges and decided to divest its non-core operations, including CIT. In 2002, CIT became an independent company through an initial public offering, and in 2004, it expanded its reach by acquiring the technology-leasing unit of GATX.

Under the leadership of CEO Jeff Peek, CIT experienced remarkable growth and acquisitions in education lending and subprime mortgages. However, these acquisitions proved detrimental, resulting in significant losses for the company. This downturn led to a series of major events for CIT.

Bankruptcy and Reorganization

In 2008, CIT faced financial difficulties and announced the sale of its home lending division and manufactured housing loan portfolio. To cope with the challenging economic climate, CIT became a bank holding company and received funds from the Troubled Asset Relief Program (TARP).

Despite these efforts, in 2009, CIT's request for Federal Deposit Insurance Corporation loan guarantees was denied. The company was saved from bankruptcy by a $3 billion infusion from its bondholders. However, CIT ultimately filed for bankruptcy under Chapter 11 in November 2009, emerging from bankruptcy protection in December 2009.

As part of the reorganization plan, CIT appointed new independent directors, including Peter J. Tobin as interim CEO. In 2010, former Merrill Lynch CEO, John Thain, took over as chairman and CEO. CIT steadily regained its footing and continued its growth trajectory.

Acquisitions and Growth

In 2014, CIT acquired Direct Capital, expanding its offerings and strengthening its position in the financial services industry. The following year, CIT Group made a significant acquisition by acquiring OneWest Bank, which was established in 2009 by a consortium led by Steven Mnuchin, who later served as the United States Secretary of the Treasury. This acquisition solidified CIT's presence and further expanded its reach in the banking sector.

Recent Developments

In 2016, John Thain retired as CEO, and Ellen Alemany assumed the role, bringing her expertise and vision to lead CIT Group into the future. As part of its strategic initiatives, CIT sold its aircraft lease business to Avolon in 2017 and divested Financial Freedom, the reverse mortgage portfolio acquired from OneWest Bank. In 2018, the company sold its European rail leasing business, NACCO, marking the end of its overseas operations.

CIT continued its growth trajectory by acquiring Mutual of Omaha Bank in 2020, expanding its offerings and strengthening its position in the market. In January 2022, CIT Group was acquired by First Citizens BancShares, exemplifying the company's commitment to ongoing growth and success.

Conclusion

The story of CIT Group is a testament to its resilience and adaptability in the face of challenges. Throughout its history, CIT has navigated through various economic climates, emerging stronger and more determined than ever. Today, CIT Group continues to provide financing, advisory services, and a range of financial solutions to individuals, middle-market companies, and small businesses across North America. As it enters this exciting new chapter under the ownership of First Citizens BancShares, CIT Group remains committed to supporting the financial needs of its customers and driving economic growth.

All images courtesy of CIT Group.

Logo of CIT Bank

Salmon Tower Building: CIT Group's Headquarters in New York City

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