CIT Group has signed a definitive agreement and plan of merger to acquire OneWest Bank from IMB Holdco for $3.4bn in a mixture of cash and stock.
Privately owned regional lender, OneWest Bank was established in 2009 that manages 73 retail branches in Southern California, with approximately $23bn in assets, including commercial and residential mortgage loans, and $15bn in deposits.
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In accordance with the terms of the agreement, IMB Holdco shareholders will receive $2bn in cash and 31.3 million shares of CIT Group common stock currently valued at $1.4bn, assuming a CIT stock price of $44.33.
CIT Group chairman and CEO John Thain said: "This transformational transaction will combine CIT’s national middle market lending platform with OneWest’s wholesale lending and branch banking franchise to create a unique provider of retail and institutional financial services.
"The transaction diversifies and lowers the cost of CIT’s 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."
Once the transaction is complete, CIT’s banking subsidiary CIT Bank will merge with OneWest Bank and the new entity will be rebranded as "CIT Bank," which will have assets of $67bnn and $28bn in deposits.
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By GlobalDataCIT Group will continue to be spearheaded by John Thain, while Steven Mnuchin, chairman of IMB Holdco, will join CIT Group as vice chairman and will also become a member of its board of directors. Alan Frank, an independent director from OneWest Bank will join the CIT Board, increasing its size from 13 to 15 members.
Mnuchin said: "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’s expansive client base and global reach."
