New York-based CIT Group Inc. has agreed to acquire a commercial loan portfolio from Flagstar Bank (FSB), a wholly owned subsidiary of Troy, Mich.-based Flagstar Bancorp Inc., for $1.3 billion.
Under the terms of the agreement, CIT Bank, the U.S. commercial bank subsidiary of CIT, will acquire $1.3 billion in commercial loan commitments, of which approximately $800 million is currently outstanding. The assets represent a substantial portion of FSB's Northeast-based commercial loan portfolio, which consists primarily of asset-based, commercial real estate, and equipment finance loans and leases. The purchase is expected to be substantially completed during the first quarter of this year.
‘We are pleased to be able to acquire a pool of commercial loans that complements our existing corporate finance portfolio and will further expand our middle market customer base,’ says Nelson J. Chai, president of CIT. ‘We will continue to look for opportunities to deploy our capital in transactions that generate good returns.’