When CIT Group Inc.’s merger with Pasadena’s OneWest Bank closed last week, it created L.A.’s largest bank, with $42.8 billion in assets – nearly one-third bigger than L.A.’s longtime leader, City National Bank.
But now that its yearlong approval process is over, it remains to be seen how much will change in the way the bank will actually interact with Angelenos. At least outwardly, the answer seems to be: not much.
As part of the deal, OneWest will become part of CIT’s banking unit, CIT Bank, and CIT Bank will relocate its headquarters to OneWest’s home in Pasadena. While the entity will be called CIT Bank, that won’t be the case for current OneWest branches.
Curt Ritter, a CIT spokesman, said branches will keep their existing signage and do business as OneWest Bank, a division of CIT. OneWest has spent a significant amount of money promoting that name – which it assumed after being formed out of the wreckage of failed IndyMac Bank and is familiar to more Angelenos than CIT.
CIT has done business in Los Angeles for years but is perhaps best known as a lender and factoring firm serving the local apparel industry.
Ritter added that customers shouldn’t expect much difference in where they find their local bank, either. He said CIT will continue to move branches within OneWest’s local footprint, but he does not expect there will be many closures.
In buying OneWest, after all, CIT was looking to take advantage of OneWest’s low-cost base of deposits – and the branches used to gather them. In fact, Ritter said CIT is actively working on ways to make the bank even easier to access for most of its customers, planning to open more full-service ATMs at local grocery chains Jons International Marketplace and Island Pacific Supermarket.
As to how the new CIT will compete with other business-focused institutions such as City National and Century City’s PacWest Bancorp, Ritter said the bank’s combination of CIT’s business-focused lending platform with OneWest’s retail footprint gives potential customers the type of multifaceted capabilities that other local banks really don’t offer.
CIT and OneWest aren’t the only institutions trying to combine a business lender and a retail bank. Last year’s acquisition of downtown L.A. lender CapitalSource by PacWest was a similar combination. But the new CIT, with a balance sheet more than twice the size of PacWest’s, will have the capability to underwrite much larger business loans.
OneWest also has a bigger share of local bank deposits, holding 3.6 percent of Los Angeles County deposits as of October, the last time data was released, compared with PacWest’s 1.6 percent.
While much has been written about businesses fleeing Los Angeles for places with leaner governments and lower taxes, this deal bucks that trend. CIT is headquartered in Livingston, N.J., and its banking unit is based in Salt Lake City. But after the OneWest acquisition, CIT Bank will move its headquarters to Pasadena.
“We expect to wind down our existing operations in Salt Lake City within one year and move our Utah operations to other CIT locations, including Pasadena,” Ritter said.
Moving its headquarters here makes sense given that CIT Bank has just one location – its Salt Lake City office – while OneWest’s 74 branches are all in Southern California.
Most OneWest employees in Pasadena will keep their jobs, Ritter said, as will top OneWest executives. CIT Chief Executive John Thain will remain based in the New York area, but current OneWest Chairman Steven Mnuchin and Chief Executive Joseph Otting will be CIT’s top two local executives, taking on the respective titles of vice chairman and co-president of CIT. Otting will also be chief executive of CIT Bank.
The CIT-OneWest merger was notable not just for the size of the deal, but also for the fact that a number of community groups, led by San Francisco’s California Reinvestment Coalition, opposed the deal. Opponents’ argument drew on OneWest’s history with home foreclosures, their belief that neither CIT nor OneWest had adequately served lower-income communities – and the fact that both banks received substantial government assistance and their backers will reap a financial windfall as a result of the deal.
When asked about this, Ritter mentioned the community groups that came out in support of the deal. The Los Angeles Latino Chamber of Commerce was one notable advocate, although OneWest has been one of the group’s major sponsors. And Otting conducted a campaign early on in the process where he asked business contacts to send a form email to Federal Reserve Chairwoman Janet Yellen urging her to approve the merger without a public hearing – where community groups on both sides of the issue could weigh in. Nonetheless, Ritter said CIT is prepared to work with both its supporters and its detractors going forward.
“We will continue to engage with and foster relationships with local community organizations throughout Southern California,” Ritter said.
One area where the bank isn’t afraid to choose sides is on the hardwood. Ritter said CIT plans to carry on OneWest’s affiliation with the Los Angeles Lakers.
For reprint and licensing requests for this article, CLICK HERE.