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CIT to purchase commercial loan portfolio from Flagstar Bank

US based bank holding company CIT Group (CIT) is likely to acquire a commercial loan portfolio from Flagstar Bank (FSB), a wholly-owned subsidiary of Flagstar Bancorp, for an undisclosed sum.

Based on terms of the deal, the US commercial arm CIT Bank will purchase nearly $1.3bn in commercial loan commitments, out of which almost $800m is currently outstanding.

Representing a significant portion of FSB’s Northeast-based commercial loan portfolio, the deal mainly includes asset-based, commercial real estate, as well as equipment finance loans and leases.

The transaction is likely to complete during the first quarter of 2013.

CIT president Nelson Chai said, "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."

As of 30 September 2012, Flagstar Bank had $14.9bn in total assets and manages a network of 111 branches in Michigan, 31 home loan centres in 14 states, and a total of four commercial banking offices in Massachusetts, Connecticut, and Rhode Island.

Established in 2000, CIT Bank offers various banking services in the country. As of 30 September 2012, it had $8.6bn of deposits and $11.6bn of assets.