Jan 2 U.S. Midwestern regional bank Flagstar
Bancorp Inc said it will sell a substantial portion of
its Northeast-based commercial loan portfolio to CIT Group Inc
for about $780 million as it looks to focus on its
community banking operations.
CIT's U.S. commercial bank subsidiary will acquire $1.26
billion in commercial loan commitments of which $785 million is
currently outstanding, Flagstar said in a statement.
It expects to sell majority of the assets during the first
quarter of 2013.
The purchased assets consist of asset-based, commercial real
estate and equipment finance loans and leases, CIT Group, led by
former Merrill Lynch Chief Executive John Thain, said in a
The Troy, Michigan-based Flagstar, which is currently
fending off a lawsuit by bond insurer Assured Guaranty Ltd
over mortgage backed securities, expects the sale to be
"This transaction is another step in renewing Flagstar's
focus on our community banking operation in Michigan and our
national mortgage business," Flagstar Chief Executive Michael
Tierney said in a statement.
Shares in CIT closed at $39.04 on Wednesday on the New York
Stock Exchange, while those of Flagstar Bancorp closed at