CIT Deal for OneWest Clears Hurdles

NEW YORK CITY—A year after it was first announced, CIT Group's $3.4-billion merger with OneWest Bank has cleared all regulatory hurdles. The agreement to acquire Pasadena, CA- based OneWest and its parent company, IMB Holdco LLC, has received approval from the Federal Reserve Board, the Office of the Comptroller of the Currency and all required state regulators. The transaction, one of the largest in the banking sector since the 2008 financial crisis, is expected to close on August 3, subject to remaining closing conditions.

“We welcome OneWest employees to CIT and we look forward to working with them to meet the needs of small and middle market businesses, the transportation industry, real estate sector and our retail bank customers,” says John Thain, chairman and CEO of CIT. Following the merger, OneWest will combine with CIT's banking subsidiary under the name CIT Bank. A network of 70 retail branches will operate throughout Southern California as OneWest Bank, a division of CIT Bank, NA.

When the merger was first announced in July 2014, Thain said it would  “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.” At that time, the deal was expected to close in the first or second quarter of this year; Bloomberg Business reported Tuesday that it was delayed by objections from low-income borrower advocacy groups.

OneWest rose from the ashes of the former IndyMac Bank in March 2009, as a group led by former Goldman Sachs partner Steve Mnuchin bought IndyMac's assets from the FDIC for $1.55 billion. The FDIC closed IndyMac the previous July and assumed conservatorship.

Once the transaction is completed the combined CIT Group Inc. will have more than $65 billion in assets and more than $30 billion of deposits. It 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 a year ago. "We'd have had all the expense of going over $50 billion but only $2 billion more of assets to cover the expense base."