Flagstar Sells CRE, Other Loans to CIT
Flagstar Bancorp Inc., Troy, Mich., is selling a portfolio of commercial loans, including commercial real estate loans, to CIT Bank for $779 million as part of its efforts to focus on its national mortgage operation and Michigan commercial banking franchise.
CIT is getting $1.3 billion in loan commitments of which $785 million is currently outstanding. The loans are located in the Northeast U.S.
Besides the CRE loans, the portfolio consists of asset-based loans and equipment finance loans and leases. The deal should be completed in the first quarter.
In a statement, Flagstar president and CEO Michael Tierney said, “We remain deeply committed to improving the quality of our earnings within a disciplined framework and today’s transaction helps us decrease our risk profile while improving our balance sheet flexibility.”
Flagstar was the seventh largest mortgage originator in the third quarter according to the Quarterly Data Report.
Tierney was promoted in October to president of Flagstar in the effort to take the bank to the next level after predecessor Joseph Campanelli was able to bring it back to profitability.
CIT Group president Nelson Chai said the Flagstar loans complement its existing corporate finance portfolio and expands the middle market customer base. It is looking for other opportunities to deploy capital, he said.