CIT Group Incorporated
Encyclopedia
CIT Group Inc. is a United States bank holding company founded in 1908 with more than $35 billion in finance and leasing assets. It provides financing and leasing capital to its more than one million small business and middle market clients and their customers across more than 30 industries. CIT maintains leadership positions in small business and middle market lending, factoring, retail finance, aerospace, equipment and rail leasing, and global vendor finance.
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. The company's name is an abbreviation of an early corporate name, Commercial Investment Trust.
sectors, products and markets, with portfolios diversified by client
and geography.
.
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 — $ 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 $100 billion ($ trillion 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, Gibson, All-Steel, and RACO. The Madison Avenue building was sold in 1982 as the company moved to a newly-constructued 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.
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.
In 1999, CIT acquired Toronto-based Newcourt Credit Group Inc. for approximately US$4 billion to create one of the largest publicly-owned leasing companies. CIT over-paid for Newcourt, and merger integration
troubles forced CIT to draw upon emergency credit facilities with several banks to avoid bankruptcy. As other funding sources dried up, CIT was forced to sell itself to Tyco International
Ltd. in June 2001. 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 opeerations, 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
. Its headquarters were last in New York city in 1983. CIT retained its Livingston campus as its corporate headquarters.
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.
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. It declared Chapter 11 bankruptcy on 1 November 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.
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 p.m. 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 19 July 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.
were:
The Company is part of the Fortune 500 and was a part of the S&P 500 Index
S&P 500
The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock...
until it was replaced by Red Hat
Red Hat
Red Hat, Inc. is an S&P 500 company in the free and open source software sector, and a major Linux distribution vendor. Founded in 1993, Red Hat has its corporate headquarters in Raleigh, North Carolina with satellite offices worldwide....
at the close of trading July 24, 2009. The Company is headquartered in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, and employs approximately 3,700 people in locations throughout North America, Europe, Latin America, and Asia Pacific. The company's name is an abbreviation of an early corporate name, Commercial Investment Trust.
Structure
Each CIT business has industry alignment and focuses on specificsectors, products and markets, with portfolios diversified by client
and geography.
- CIT operates CIT Bank, which is Federal Deposit Insurance CorporationFederal Deposit Insurance CorporationThe Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
(FDIC) insured and operates BankOnCIT.com, a separate website.
- CIT Corporate 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 Communications, Energy, Entertainment, Healthcare, Industrials, Information Services & Technology, Restaurants, Retail, and Sports & Gaming.
- "Trade Finance" is the number one provider of factoringFactoring (finance)Factoring is a financial transaction whereby a business job sells its accounts receivable to a third party at a discount...
services for companies that sell into retail channels of distribution. It provides credit protection, accounts receivable management and asset-based lending to manufacturers and importers.
- "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.
- "Vendor Finance" is a global leader 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.
History
On February 11, 1908, Henry Ittleson founded the Commercial Credit and Investment Company in St. Louis, MissouriSt. Louis, Missouri
St. Louis is an independent city on the eastern border of Missouri, United States. With a population of 319,294, it was the 58th-largest U.S. city at the 2010 U.S. Census. The Greater St...
.
In 1915 it moved to New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
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
Studebaker
Studebaker Corporation was a United States wagon and automobile manufacturer based in South Bend, Indiana. Founded in 1852 and incorporated in 1868 under the name of the Studebaker Brothers Manufacturing Company, the company was originally a producer of wagons for farmers, miners, and the...
, the first of its kind in the auto industry. During World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, 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
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
. CIT entered the field of factoring
Factoring (finance)
Factoring is a financial transaction whereby a business job sells its accounts receivable to a third party at a discount...
in 1928 and expanded operations into Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
in 1929.
With international tensions rising prior to World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, 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
United States armed forces
The United States Armed Forces are the military forces of the United States. They consist of the Army, Navy, Marine Corps, Air Force, and Coast Guard.The United States has a strong tradition of civilian control of the military...
. From 1947 to 1950, the company's net income rose from $7.3 million to $30.8 million — $ million in recent terms. Ittleson died at age 77 on October 27, 1948.
The company moved into a new building at 650 Madison Avenue
Madison Avenue (Manhattan)
Madison Avenue is a north-south avenue in the borough of Manhattan in New York City, United States, that carries northbound one-way traffic. It runs from Madison Square to the Madison Avenue Bridge at 138th Street. In doing so, it passes through Midtown, the Upper East Side , Spanish Harlem, and...
in Manhattan
Manhattan
Manhattan is the oldest and the most densely populated of the five boroughs of New York City. Located primarily on the island of Manhattan at the mouth of the Hudson River, the boundaries of the borough are identical to those of New York County, an original county of the state of New York...
in 1957. In 1960, Walter Lundell succeeded Dietz as president of the company. Five years later, in 1959, the company passed $100 billion ($ trillion in recent terms) in financing volume since its founding. The Vietnam War
Vietnam War
The Vietnam War was a Cold War-era military conflict that occurred in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. This war followed the First Indochina War and was fought between North Vietnam, supported by its communist allies, and the government of...
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, Gibson, All-Steel, and RACO. The Madison Avenue building was sold in 1982 as the company moved to a newly-constructued headquarters facility in Livingston, New Jersey
Livingston, New Jersey
Livingston is a township in Essex County, New Jersey, United States. As of the United States 2000 Census, the township population was 29,366.Livingston was incorporated as a township by an Act of the New Jersey Legislature on February 5, 1813, from portions of Caldwell Township and Springfield...
in 1983. The address of the new headquarters was 650 CIT Drive, after the old 650 Madison Avenue address.
In 1984, CIT was sold to Manufacturers Hanover Trust. In 1989, Manufacturers Hanover Trust sold sixty percent of CIT to Dai-Ichi Kangyo Bank
Dai-Ichi Kangyo Bank
The , abbreviated as , was one of the largest banks in the world during the latter half of the 20th century. It combined with Fuji Bank and the Industrial Bank of Japan in 2000 to form Mizuho Financial Group....
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.
In 1999, CIT acquired Toronto-based Newcourt Credit Group Inc. for approximately US$4 billion to create one of the largest publicly-owned leasing companies. CIT over-paid for Newcourt, and merger integration
Merger integration
Merger integration, or post-merger integration refers to the aspect of an organizational merger that involves combining the original socio-technical systems of the merging organizations into one such newly-combined system.-Overview:...
troubles forced CIT to draw upon emergency credit facilities with several banks to avoid bankruptcy. As other funding sources dried up, CIT was forced to sell itself to Tyco International
Tyco International
Tyco International Ltd. is a highly diversified global manufacturing company incorporated in Switzerland, with United States operational headquarters in Princeton, New Jersey...
Ltd. in June 2001. 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 opeerations, including CIT. On July 8, 2002 Tyco completed its divestment of its Tyco Capital business through an initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
, 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
New York Public Library
The New York Public Library is the largest public library in North America and is one of the United States' most significant research libraries...
. Its headquarters were last in New York city in 1983. CIT retained its Livingston campus as its corporate headquarters.
On July 1, 2008, CIT Group announced that it would be selling its home lending division to Lone Star Funds
Lone Star Funds
Lone Star Funds is a worldwide private equity firm based in Dallas, Texas, that specializes in purchasing distressed companies and assets, often well-known consumer brands that have seen better times or gone through financial difficulties due to leveraged buy-outs...
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
Manufactured housing
Manufactured housing is a type of prefabricated housing that is largely assembled in factories and then transported to sites of use...
portfolio Vanderbilt Mortgage and Finance Inc. for approximately $300 million, although it held a value of $470 million.
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. It declared Chapter 11 bankruptcy on 1 November 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.
On July 13, 2009, Bloomberg TV reported that CIT was asking for Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
loan guarantees.
On July 15, 2009 the common stock of CIT was halted on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
during trading hours with "News Pending". At 6:03 p.m. 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
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
. It was rescued in a US$3 billion deal on 19 July 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
United States Bankruptcy Court for the Southern District of New York
The United States Bankruptcy Court for the Southern District of New York is the United States bankruptcy court within the United States District 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.
Board of directors
, members of CIT's Board of DirectorsBoard of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
were:
- John ThainJohn ThainJohn Alexander Thain is an American businessman, investment banker, and currently chairman and CEO of the CIT Group.Thain was the last chairman and chief executive officer of Merrill Lynch before its merger with Bank of America...
— Chairman of the BoardChair (official)The chairman is the highest officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office is typically elected or appointed by the members of the group. The chairman presides over meetings of the assembled group and conducts its business in an...
and Chief Executive OfficerChief executive officerA chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of CIT. - MICHAEL J. EMBLER
- WILLIAM M. FREEMAN
- DAVID M. MOFFETT
- R. BRAD OATES
- MARIANNE MILLER PARRS
- GERALD ROSENFELD
- VICE ADMIRAL JOHN RYAN
- SEYMOUR STERNBERG
- PETER J. TOBIN
- LAURA S. UNGER