CIT Group (CIT), a provider of commercial lending and leasing services, entered into a definitive agreement and plan of merger with IMB Holdco, the parent company of OneWest Bank, for $3.4 billion in cash and stock.
As a result, CIT expects the transaction to be 20% accretive to earnings per share in 2016 and generate an internal rate of return of 15%.
"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," said John Thain, chairman and CEO of OneWest.
"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," Thain continued.
OneWest Bank operates 73 retail branches in Southern California, with approximately $23 billion in assets, including commercial and residential mortgage loans, and $15 billion in deposits.
Under the agreement, CIT Bank, CIT's banking subsidiary, will merge with OneWest Bank under the "CIT Bank" name and CIT will have assets of $67 billion and $28 billion in deposits.