| Type | Public (NYSE: CIT) |
|---|---|
| Industry | Financial services |
| Founded | 1908 |
| Founder(s) | Henry Ittleson |
| Headquarters | 11 West 42nd Street, New York City, United States |
| Key people | John Thain CEO & Chairman[1] Scott T. Parker CFO[2] Nelson Chai President[3] |
| Revenue | US$ 6.363 billion (2010)[4] |
| Net income | US$ 0.516 billion (2010)[4] |
| Total assets | US$ 51.0 billion (2010)[4] |
| Total equity | US$ 8.9 billion (2010)[4] |
| Website | cit.com |
CIT Group Inc. (NYSE: CIT) 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.[5] 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.
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Each CIT business has industry alignment and focuses on specific sectors, products and markets, with portfolios diversified by client and geography.[6]
On February 11, 1908, Henry Ittleson founded the Commercial Credit and Investment Company in St. Louis, Missouri.[8]
In 1915 it moved to New York City and renamed itself Commercial Investment Trust and went by the initials of C.I.T.[9] 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 — $281 million in recent terms. Ittleson died at age 77 on October 27, 1948.[8]
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 ($1 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.[10] 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.[11] Its headquarters were last in New York city in 1983. CIT retained its Livingston campus as its corporate headquarters.[12]
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.[13]
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.[14]
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."[15] 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.[16][17][18] 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.[19] CIT said it planned a comprehensive restructuring of its liabilities.[20]
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.[21]
On Sunday, November 1, 2009, CIT Group filed for Chapter 11 bankruptcy protection.[22][23][24] It filed in the United States Bankruptcy Court for the Southern District of New York along with CIT Group Funding Company of Delaware LLC.[25]
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.[26]
As of 2011[update], members of CIT's Board of Directors were:[27]
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