NEW YORK CITY—Commercial lender CIT Group Inc. said Tuesday that it would acquire Southern California-based OneWest Bank. The $3.4-billion cash-and-stock merger deal with IMB Holdco LLC, OneWest's parent company, will increase CIT's total assets to $67 billion in the largest bank acquisition of the year to date.

With 73 retail branches, OneWest rose from the ashes of the former IndyMac Bank in 2009, as a group led by former Goldman Sachs partner Steve Mnuchin bought IndyMac's assets from the FDIC for $1.55 billion. Following the merger, OneWest will combine with CIT's banking subsidiary under the name CIT Bank.

CIT chairman John Thain says the OneWest deal “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.” He expects the deal to close in the first or second quarter of 2015, and to add 20% to earnings per share for 2016.

Thain will continue as CIT's chairman and CEO, with Mnuchin joining as vice chairman and as a member of CIT's board. Alan Frank, an independent director from OneWest, will also join the CIT board, increasing its size from 13 to 15 members.

The OneWest deal will put CIT comfortably over the $50-billion threshold that marks a bank as a systemically important financial institution and thus subject to a more comprehensive battery of regulations. “If we had grown to just $52 billion, we would be in the worst spot," Thain told the Wall Street Journal on Tuesday. "We'd have had all the expense of going over $50 billion but only $2 billion more of assets to cover the expense base."

J.P. Morgan Securities LLC is serving as financial advisor to CIT, while Wachtell, Lipton, Rosen & Katz is serving as CIT's legal counsel. Goldman, Sachs & Co., Bank of America Merrill Lynch and Cleary, Gottlieb, Steen & Hamilton LLP are representing IMB Holdco. Sullivan & Cromwell is serving as joint regulatory counsel for CIT and IMB Holdco.