CIT expects the transaction to be 20% accretive to earnings per share in 2016 generating an internal rate of return (IRR) of 15%.

CIT Group Inc. will continue to be led by John A. Thain, chairman and chief executive officer.

Following the close of the transaction, Steven T. Mnuchin, chairman of IMB Holdco LLC, will join CIT Group Inc. as vice chairman and will also become a member of its Board of Directors. Alan Frank, an independent director from OneWest Bank will also join the CIT Board, increasing its size from 13 to 15 members.

Thain explained: “This transformational transaction will combine CIT’s national middle market lending platform with OneWest’s wholesale lending and branch banking franchise to create a unique provider of retail and institutional financial services.

“The transaction diversifies and lowers the cost of CIT's deposits, broadens the products we can offer to our middle market clients, is accretive to earnings and return on equity, and accelerates the utilization of our NOL, while maintaining a strong capital position. We look forward to welcoming OneWest Bank’s talented employees to CIT as we build our franchise and meet the financing needs of our customers.”

Mnuchin added: “We have spent the last five years building OneWest Bank into a premier regional bank in Southern California. We are confident that this transaction will provide our retail and commercial customers with access to the broad range of high-quality financial products and services offered by CIT, and allow OneWest to benefit from CIT’s expansive client base and global reach.

“I look forward to joining the CIT Board, and to ensuring a smooth integration of CIT Bank and OneWest for the benefit of both companies’ stakeholders.”

Under the terms of the Agreement, IMB Holdco LLC shareholders will receive $2.0 billion in cash and 31.3 million shares of CIT Group Inc. common stock currently valued at $1.4 billion assuming a CIT stock price of $44.33.

The transaction has been approved by the boards of directors of both companies and is subject to customary closing conditions and regulatory approvals.

News of the deal comes as CIT reported net income of $247 million for Q2 2014, compared to net income of $184 million for the year-ago quarter. During the quarter, CIT completed the sale of the $3.3 billion Student Loan portfolio along with certain secured debt and servicing rights, generating income of $52 million net of taxes.

Thain stressed: “We had a solid second quarter and made good progress strengthening our franchise. We grew our commercial assets by 3%, repurchased 9.4 million common shares and announced the acquisition of Direct Capital Corporation while completing the sale of certain non-strategic portfolios. We continue to focus on building long-term value by growing our earning assets, expanding CIT Bank, achieving our profitability targets and returning capital to our shareholders.”