An Important Milestone

In 2008, CIT reached a milestone rare in corporate America: its hundredth anniversary. New York Mayor Michael Bloomberg declared Monday, February 11, “CIT Centennial Day.” That same day, CIT executives and board members, along with executives of CIT-supported civic and cultural organizations, rang the opening bell at the New York Stock Exchange.

A Gathering Storm

Even as CIT celebrated its centennial, the global financial system began to falter. Triggered by a collapse in the U.S. housing market, the crisis quickly engulfed the entire financial system, leading to a global credit crunch and the worst economy since the Great Depression.

As the crisis unfolded, CIT took definitive steps to position itself to withstand the recession.  In April 2008, CIT ceased student loan originations. In July, the company sold its home lending business as it sought to secure liquidity.

Despite these moves, the global recession exacted a heavy toll. Seeking a more reliable source of capital and focused on building a bank centric model, CIT converted to a bank holding company in December 2008. That same month, CIT received funds through the U.S. Treasury’s Troubled Asset Relief Program (TARP). The investment enabled CIT to continue to meet its obligations and maintain its commitments to its small business and middle market clients.

CIT faced a worsening liquidity crisis, culminating in the July 2009 denial of access to the FDIC’s Temporary Liquidity Guarantee Program (TLGP), which threatened to force the company into liquidation. In response, CIT secured rescue financing from a group of its bondholders, allowing the Company the time to develop and execute a plan of reorganization and win overwhelming bondholder support for the largest ever pre-packaged bankruptcy. Fewer than 40 days after entering bankruptcy, CIT became the first financial services company in history to emerge intact.

2010: A New Beginning

As part of the reorganization plan, CIT named seven new independent directors.  Peter Tobin, a current Board member, was named interim Chief Executive officer beginning in January 2010, replacing Jeff Peek, who resigned following the Company’s emergence from bankruptcy. Soon afterward, the Board appointed a financial services veteran, John Thain, Chairman and Chief Executive.

In commenting on his new role, Thain summarized the opportunity facing CIT as it moves forward into its second century: “CIT’s numerous market-leading positions are evidence of the resiliency of the franchise and its unwavering commitment to its customers. We will continue to work even harder to support small and mid-market businesses. CIT can and will serve an important role in the recovery of the U.S. economy and the creation of jobs.”

With Thain at the helm, the remainder of 2010 and first half of 2011 witnessed CIT’s Executive Management Team and its Board of Directors making strategic moves to further position CIT as a market leader.