Buying a whole bank is a marathon. But buying a loan portfolio is a sprint.

With banks clamoring for earning assets in the current low loan-growth environment, large portfolios of performing loans spark fierce competition when they go up for sale. Winning relies just as much on how fast a bidder moves as how much it is willing to pay.

Nelson Chai, the president of CIT Group (CIT) in New York, says the specialty lender's ability to quickly lace up its running shoes provided a competitive advantage in its recent acquisition of $1.2 billion in loans and commitments from Flagstar Bancorp (FBC) in Troy, Mich.

"The challenge when you go look at portfolios is that everybody is looking at them," Chai said Tuesday at the Credit Suisse Financial Services Forum in Miami. "And people are getting pretty aggressive."

CIT moved quickly after learning that Flagstar was shopping the portfolio on Dec. 10, he explained. It signed a definitive agreement for the assets, which included $785 million in loans outstanding, on Dec. 31. The deal was priced at 99% of the tangible book value of the loans outstanding.

"Our ability to get the deal done and sign the deal before yearend was the critical factor of success there," Chai said. "I believe that if the process had dragged out it would have gotten extremely competitive and others would have come in over the top."

Chai's comments echo similar comments made by CIT Chief Executive John Thain during the $44 billion-asset company's fourth-quarter conference call last month.

"We were also able to close quickly, which we thought was a big competitive advantage relative to our peer group," Thain said during the call.

Preparedness is probably the most important skill for a prospective buyer, loan sale advisors said.

"People who can play are those who can move quickly because they have the infrastructure in place," said Kingsley Greenland, chief executive of DebtX, a marketplace for whole-loan sales.

That means having a system for due diligence in place, an experienced credit team and the cash ready, Greenland says.

More banks will stock up on dry powder as they eye possible loan and whole-bank deals, says Matthew Schultheis, an analyst with Boenning & Scattergood.

"There are some banks right now that are contemplating doing a capital raise so that they can go to the table for an M&A deal and not have to worry about a contingent- capital situation holding them back," Schultheis says.

Having employees and advisors who are willing to work nights and weekends — even around the holidays — also helps.

"It requires a quick meeting of the minds on price, long days in a conference room reviewing files and speedy approvals on both sides," says Jon Winick, president of Clark Street Capital, a Chicago-based advisory firm that does loan sales.

Most sales of loan pools take three to five weeks, not too much different than CIT's turnaround time, Winick and Greenland say.

The impressive part of CIT's purchase, Greenland says, is that it spent only three weeks on a deal that large.

"What is unique is the size," Greenland says.

CIT was enticed by the makeup of the portfolio, which consisted of asset-based loans, equipment finance and commercial real estate.

"We recognized that this was right in our strike zone," Pete Connolly, president and co-head of CIT Corporate Finance, said in an interview. "A lot of the borrowers were known to us, because they had current facilities or were customers from the past."

Flagstar wanted bids by January, but given CIT officials' familiarity with the portfolio, they approached Flagstar and asked if it would entertain a binding agreement if CIT could produce one by Dec. 31, Connolly says.

"They said yes, so we marshaled our resources in credit and underwriting and worked around the clock," Connolly says. CIT had 30 to 40 people working on the deal around the holidays. "Despite long hours, our ability to get it done was very motivating," he says.

CIT has said it is interested in buying more portfolios, and analysts have encouraged more deals so CIT can put to work more of the cash on its balance sheet.

Meanwhile, CIT has been the subject of takeover rumors as the company has struggled to lower its cost of funds. On Friday, Reuters reported that investment bank Goldman Sachs has talked with potential buyers for CIT including Toronto-Dominion Bank and Wells Fargo (WFC) over the past year and a half but nothing materialized.

Chai and Scott Parker, chief financial officer of CIT, did not address that topic in their presentation and did not leave time for questions at the end. A CIT spokesman said in an email the company does not comment on speculation.

The loan purchases and the M&A speculation are not necessarily contradictory, Schultheis says.

"My personal opinion is that you play both sides of M&A," he says. "Are they having conversations with possible buyers? I would be surprised if they were not. Are they having conversations with others about similar portfolio deals? I would be surprised if they were not."

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