Back to top

Analyst Blog

On Wednesday, CIT Group Inc. (CIT - Analyst Report) announced an agreement to acquire a commercial loan portfolio worth $1.3 billion from Flagstar Bank, a fully-owned subsidiary of Flagstar Bancorp, Inc. (FBC - Snapshot Report). The total portfolio comprises roughly $800 million of outstanding loans. The acquisition is anticipated to be closed in the first quarter of this year.

The acquired portfolio principally consists of asset-based commercial real estate and equipment finance loans and leases. These make up a considerable portion of Flagstar Bank’s Northeast-based commercial loan portfolio.

In November 2012, Wells Fargo & Company (WFC - Analyst Report) also took similar step and announced the acquisition of a loan portfolio with face value of $3.3 billion from Irish Bank Resolution Corporation , previously known as Anglo Irish Bank. The portfolio comprised 61 performing U.S.-based commercial real estate loans.

Management at CIT Group believes that the acquisition will enhance the company’s middle-market customer base. We believe that the bank is purchasing such loans in order to significantly gain in the long term.

With respect to CIT Group’s fundamentals, it is poised to benefit from strong capital and liquidity position. Moreover, the company’s recent initiatives to restructure its balance sheet as well as repay and refinance its costly debt will not only bring down the funding costs, but also would lead to an improvement in its net interest margin as well as profitability.

However, CIT Group’s growth prospects will likely be adversely impacted by sluggish growth in the industries where the company provides finance, stringent regulations as well as the weak economic recovery.

CIT Group currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%