Flagstar Bancorp Inc., the holding company for Flagstar Bank FSB, has announced that, effective Dec. 31, 2012, it has entered into a definitive Transaction Purchase and Sale Agreement under which a wholly-owned subsidiary of CIT Bank, the U.S. commercial bank subsidiary of CIT Group Inc., will acquire a substantial portion of Flagstar's Northeast-based commercial loan portfolio.
"This transaction is another step in renewing Flagstar's focus on our community banking operation in Michigan and our national mortgage business," said Michael Tierney, Flagstar president and CEO. "Flagstar is the largest bank headquartered in Michigan, and we are focused on being a best-in-class national mortgage lender and leading super-community bank. We remain deeply committed to improving the quality of our earnings within a disciplined lending framework, and today's transaction helps us decrease our risk profile while improving our balance sheet flexibility."
Under the terms of the Agreement, CIT will acquire $1.264 billion in commercial loan commitments, $785 million of which is currently outstanding. The loans sold consist primarily of commercial real estate loans, asset-based loans and equipment leases.
"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,” said Nelson J. Chai, president of CIT. “We will continue to look for opportunities to deploy our capital in transactions that generate good returns.”