Income from Continuing Operations of $697
Million ($3.63 Per Diluted Share)
- Results Impacted by Several Items
Related to Strategic Initiatives and Exited Businesses –
Includes net after-tax benefit of $544 million ($2.83) per diluted
share from discrete items;
- Closed OneWest Bank Acquisition
– Added over $20 billion of assets; $14 billion of deposits,
reducing borrowing costs by approximately 70 basis points; CIT Bank
now represents nearly 65% of total portfolio assets;
- Grew Lending and Leasing Assets
– Financing and leasing assets in North America Banking and
Transportation & International Finance grew over $1 billion or
3% from prior quarter, excluding assets acquired;
- Continued Capital Return –
Returned nearly $170 million of capital to shareholders through
dividends and the repurchase of approximately 3 million shares;
Tier 1 Common Ratio of 12.4%.
CIT Group Inc. (NYSE: CIT) cit.com, a leading provider of
commercial lending and leasing services, today reported net income
of $693 million, $3.61 per diluted share, for the quarter ended
September 30, 2015, compared to net income of $515 million, $2.76
per diluted share, for the year-ago quarter. Income from continuing
operations was $697 million, $3.63 per diluted share, compared to
$515 million, $2.76 per diluted share, in the year-ago quarter. Net
income for the current and year-ago quarters included $647 million,
$3.37 per diluted share, and $375 million, $2.01 per diluted share,
respectively, of income tax benefits associated with the reversals
of the valuation allowance related to the U.S. federal deferred tax
asset.
Net income for the nine month period ended September 30, 2015
was $912 million, $5.03 per diluted share, compared to $879
million, $4.59 per diluted share, for the period ended September
30, 2014. Income from continuing operations for the nine month
period ended September 30, 2015 was $916 million, $5.05 per diluted
share, compared to $825 million, $4.31 per diluted share, for the
period ended September 30, 2014. Net income for the nine month
periods ended September 30, 2015 and September 30, 2014 also
included $647 million, $3.57 per diluted share, and $375 million,
$1.96 per diluted share, respectively, of income tax benefits
associated with the previously mentioned partial reversals of the
tax related valuation allowance.
“We made significant progress in our transition to a U.S.
commercial bank model in the third quarter,” said John Thain,
Chairman and Chief Executive Officer. “We closed the acquisition of
OneWest Bank and remain focused on integrating and leveraging its
platform. We sold our business in Mexico, moved certain
international businesses into held for sale and are exploring
strategic alternatives for our Commercial Air business. I am
confident our strategic initiatives will further position CIT for
long-term success and increased shareholder value.”
Summary of Third Quarter Financial
Results from Continuing Operations
All references in this section relate to continuing operations
and therefore do not include any of the assets or results of
operations of the discontinued operations.
On August 3, 2015, CIT acquired IMB HoldCo LLC, the parent
company of OneWest Bank, which impacts the comparability of current
results to prior periods. CIT paid approximately $3.4 billion as
consideration, which was mostly comprised of approximately $1.9
billion in cash proceeds and 30.9 million shares of CIT Group Inc.
common stock (valued at approximately $1.5 billion at the time of
closing). The acquisition added over $20 billion of assets,
including $0.6 billion of goodwill, and $18 billion of liabilities
to CIT’s Consolidated Balance Sheet.
The third quarter 2015 includes two months of OneWest Bank
results of operations, and the September 30, 2015 balance sheet
includes the impact of the acquisition. Prior periods do not
reflect any results from OneWest Bank.
Selected Financial Highlights
(Continuing Operations)
Change from: 3Q15
2Q15 3Q14
PriorQuarter*
Prior
Year*
($ in millions, except per share data) Pre-tax income $ 137 $ 153 $
117 $ (16 ) $ 20 Net income $ 697 $ 115 $ 515 $ 582 $ 181 Diluted
earnings per share (EPS) $ 3.63 $ 0.66 $ 2.76 $ 2.97 $ 0.87 EPS
impact from VA Reversal $ 3.37 NA $ 2.01 NA $ 1.36 Pre-tax
return on average earning assets (ROAEA) 1.04 % 1.49 % 1.14 % -0.45
% -0.10 % Net finance margin 3.67 % 3.33 % 3.57 % 0.33 % 0.10 % Net
efficiency ratio 62.2 % 57.4 % 57.8 % 4.8 % 4.4 % Tangible book
value per share (TBVPS) $ 47.09 $ 47.51
$
45.87
$
(0.42 )
$
1.22 CET 1 Ratio 12.4 % 14.4 % NA -2.0 % NA Total Capital
Ratio 13.0 % 15.1 % 14.3 % -2.1 % -1.3 % Net charge-offs as
% of AFR 0.86 % 0.48 % 0.39 % 0.38 % 0.47 % Allowance for loan
losses as % of finance receivables 1.03 % 1.79 % 1.81 % -0.76 %
-0.78 % Average earning assets $ 52,448 $ 41,159 $ 40,974 $
11,289
$ 11,474 Financing and leasing assets $ 50,099 $ 35,846 $ 36,072 $
14,253 $ 14,026 * Certain balances may not sum due to rounding.
Income from continuing operations of $697 million includes two
months of results from OneWest Bank and also reflects discrete
items that contributed $544 million to income relating to the
acquisition, our strategic actions and portfolios we have exited.
Discrete items associated with the acquisition include $647 million
from the reversal of the valuation allowance on the U.S. federal
deferred tax asset and after-tax transaction and restructuring
costs of $18 million. In addition, we incurred charges on our
strategic initiatives and exited portfolios, including a $14
million after-tax charge related to the sale of our Mexico business
due to the realization of the currency translation adjustment
(“CTA”), $15 million in after-tax impairment on an international
business moved to held for sale during the quarter, and discrete
tax charges of $56 million. In addition to the discrete items noted
above, income this quarter included a $17 million after-tax
mark-to-market charge on the total return swap (“TRS”).
Tangible book value per share1 of $47.09 reflects the equity
distributed for the OneWest Bank acquisition, the reversal of the
valuation allowance on the deferred tax asset and the goodwill and
intangibles associated with the acquisition. Estimated Common
Equity Tier 1 and Total Capital ratios at September 30, 2015
declined to 12.4% and 13.0%, respectively, as calculated under the
fully phased-in Regulatory Capital Rules. Average earning assets2
at September 30, 2015 increased to $52.4 billion.
Income Statement
Highlights:
Net Finance Revenue*
Change from: ($ in millions) 3Q15 2Q15 3Q14 Prior
Quarter Prior
Year
Interest income $ 438 $ 284 $ 308 $ 154 $ 129 Rental income
on operating leases 539 532
535 8 4 Finance revenue
977 816 843 162 134 Interest expense (280 ) (265 ) (275 ) (15 ) (5
) Depreciation on operating lease equipment (159 ) (158 ) (156 ) (1
) (3 )
Maintenance and other operating lease
expenses
(56 ) (49 ) (47 ) (7 ) (9
) Net finance revenue $ 482 $ 343 $ 365
$ 139 $ 117 Average earning assets $ 52,448 $
41,159 $ 40,974 $ 11,289 $ 11,474 Net finance margin 3.67 % 3.33 %
3.57 % 0.33 % 0.10 % * Certain balances may not sum due to
rounding.
Net finance revenue3 was $482 million, compared to $343 million
in the prior quarter and $365 million in the year-ago quarter.
Average earning assets were $52 billion in the current quarter
reflecting $20 billion of earnings assets acquired from OneWest
Bank. Net finance revenue as a percentage of average earning assets
(“net finance margin”) increased from both the prior and year-ago
quarters. The increase from prior quarter primarily reflects the
reduction in borrowing costs off-set by lower yielding assets
acquired with the OneWest Bank acquisition, while the change from
the year-ago quarter also reflects pressure on yields and the
absence of interest recoveries.
Other Income*
Change from: ($ in millions) 3Q15 2Q15 3Q14 Prior Quarter
Prior
Year
Factoring commissions $ 31 $ 27 $ 31 $ 4 $ - Fee revenues 28
25 24 3 5 Gains on sales of leasing equipment 31 22 22 9 9 Gains
(losses) on loan and portfolio sales (15 ) 2 10 (17 ) (25 ) Gains
on investments 2 4 5 (2 ) (3 ) Losses on OREO sales (3 ) - - (3 )
(3 )
Gains (losses) on derivatives and foreign
currency exchange
(20 ) (5 ) (23 ) (15 ) 2 Impairment on assets held for sale (24 )
(11 ) (54 ) (13 ) 31 Other revenues 9 -
9 9 - Total other
income $ 39 $ 64 $ 24 $ (25 ) $ 15
* Certain balances may not sum due to rounding.
Other income of $ 39 million includes a $24 million
mark-to-market charge on the TRS, a loss on the sale of the Mexico
platform primarily related to the recognition of $19 million of CTA
losses, and an impairment charge of $15 million on an international
portfolio moved to held for sale, partially offset by an increase
in gains on sale of rail cars. The prior quarter included a $9
million tax-related charge (that was fully offset with a benefit to
the tax provision) and a $6 million negative mark-to-market on the
TRS. The year-ago quarter was impacted by $46 million in impairment
charges on the Non-Strategic Portfolios and a negative
mark-to-market of $13 million on the TRS.
Operating Expenses*
Change from: ($ in millions) 3Q15 2Q15 3Q14 Prior
Quarter Prior
Year
Compensation and benefits $ 160 $ 136 $ 130 $ 25 $ 30
Technology 30 25 21 5 9 Professional fees 57 21 22 37 35 Net
occupancy expense 15 9 9 6 6 Advertising and marketing 7 7 8 - -
Other expenses 54 37 35
17 19 Operating expenses before
provision for severance and facilities exiting and intangible asset
amortization 324 233 225 90 99 Provision for severance and
facilities exiting activities 5 1 9 4 (4 ) Intangible asset
amortization 5 1 -
5 5 Total operating expenses $ 334
$ 235 $ 235 $ 99 $ 99
Net efficiency ratio 62.2 % 57.4 % 57.8 % 4.8 % 4.4 % *
Certain balances may not sum due to rounding.
Operating expenses excluding restructuring fees and intangible
asset amortization were $324 million, compared to $233 million in
the prior quarter and $225 million in the year-ago quarter. The
current quarter includes $24 million in transaction costs (included
in professional fees) related to the OneWest Bank acquisition,
which increased the net efficiency ratio4 by 460 basis points.
Professional fees also reflect integration related costs, while
other expenses include higher FDIC insurance costs resulting from
the acquisition. The increase from the prior quarters also reflects
higher compensation and occupancy costs primarily related to the
addition of OneWest Bank. Headcount at September 30, 2015 was 4,960
up from 3,360 in the prior quarter and from 3,330 a year ago,
driven by the OneWest acquisition. Restructuring costs and expenses
associated with the amortization of intangibles are mainly the
result of the OneWest Bank acquisition.
Income Taxes
The provision for income taxes was a benefit of $560 million,
reflecting a $647 million reversal of the valuation allowance on
the U.S. federal deferred tax asset partially offset by $56 million
in discrete charges related to our international businesses. The
effective tax rate excluding discrete items was 24%. The income tax
benefit in the year-ago quarter was $401 million from a valuation
allowance reversal and other discrete items, and a $38 million
expense in the prior quarter. Cash taxes were $9 million compared
to $4 million in the prior quarter and $3 million in the year-ago
quarter.
Balance Sheet
Highlights:
Earning Assets*
Change from: ($ in millions) 3Q15 2Q15 3Q14 Prior Quarter
Prior
Year
Loans (including assets held for sale) $ 34,395 $ 20,448 $
20,718 $ 13,947 $ 13,678 Operating lease equipment, net (including
assets held for sale) 15,704 15,398
15,354 306 350
Financing and Leasing Assets 50,099 35,846 36,072 14,253 14,027
Interest bearing cash 6,606 4,225 5,322 2,382 1,284 Investment
securities 3,619 1,693 792 1,926 2,826
Indemnification assets
465 - - 465 465 Securities purchased under agreements to resell 100
750 650 (650 ) (550 ) Credit balances of factoring clients
(1,609 ) (1,373 ) (1,433 ) (236 )
(176 ) Total Earning Assets $ 59,280 $ 41,140
$ 41,403 $ 18,139 $ 17,877 * Certain
balances may not sum due to rounding.
Earning Assets at September 30, 2015 were $59 billion, an
increase of 44% from the prior quarter, reflecting approximately $6
billion in interest bearing deposits and investments, $14 billion
in loans and $0.5 billion of indemnification assets, acquired in
the OneWest Bank transaction. Excluding the loans purchased in the
acquisition, total financing and leasing assets increased 3% from
the prior quarter, reflecting 3% growth in North America Banking
(NAB) and Transportation & International Finance (TIF), which
was slightly offset by a decrease in the Non-Strategic Portfolios
resulting from the sale of the Mexican platform.
Total cash and investment securities, including non-earning
cash, were $12.0 billion at September 30, 2015, and comprised of
$8.3 billion of cash, $3.6 billion of debt and equity securities,
of which $0.9 billion were short term, and $0.1 billion of reverse
repurchase securities. Cash and investment securities at September
30, 2015 consisted of $2.1 billion related to the bank holding
company and $8.4 billion at CIT Bank, N.A. (excluding $0.1 billion
of restricted cash), with the remainder comprised of cash at
operating subsidiaries and other restricted balances of
approximately $1.5 billion.
Deposits and Borrowings*
Change from: ($ in millions) 3Q15 2Q15 3Q14 Prior
Quarter Prior Year Total Deposits $ 32,329 $
17,268 $ 14,483 $ 15,061 $ 17,846 Unsecured notes $
10,725 $ 10,733 $ 12,232 $ (8 ) $ (1,507 ) Secured borrowings
8,596 5,709 6,691 2,887
1,904 Total Borrowings $ 19,321 $ 16,442 $
18,923 $ 2,879 $ 397 * Certain balances may not sum
due to rounding.
Deposits and secured borrowings increased from June 30, 2015,
and September 30, 2014, reflecting $14 billion of deposits and $3
billion of FHLB borrowings acquired in the OneWest Bank
transaction. At September 30, 2015, deposits represented
approximately 63% of CIT’s funding, with unsecured and secured
borrowings comprising 21% and 16% of the funding mix, respectively,
reflecting the ongoing shift from unsecured borrowings to deposit
funding. As a result, the weighted average coupon rate on
outstanding deposits and borrowings in continuing operations was
2.21% at September 30, 2015, down from 3.04% at June 30, 2015 and
from 3.16% at September 30, 2014.
Capital* Change
from: ($ in millions, except per share data) 3Q15 2Q15 3Q14
Prior Quarter Prior Year Common Stockholders' Equity
$ 10,799 $ 8,807 $ 9,005 $ 1,992 $ 1,793 Tangible Common Equity $
9,462 $ 8,220 $ 8,414 $ 1,243 $ 1,048 Total risk-based capital $
9,156 $ 8,409 $ 8,422 $ 747 $ 734 Risk-weighted assets $ 70,677 $
55,665 $ 56,212 $ 15,012 $ 14,465 Book value per share
(BVPS) $ 53.74 $ 50.91 $ 49.10 $ 2.83 $ 4.64 Tangible book value
per share (TBVPS) $ 47.09 $ 47.51 $ 45.87 $ (0.42 ) $ 1.22 CET 1
Ratio 12.4 % 14.4 % NA -2.0 % NA Total Capital Ratio 13.0 % 15.1 %
14.3 % -2.1 % -1.3 % Tier 1 Leverage Ratio 15.2 % 17.7 % 18.1 %
-2.5 % -2.9 % * Certain balances may not sum due to rounding.
The acquisition of OneWest Bank increased equity, primarily due
to the issuance of $1.5 billion in common shares, and resulted in
the reversal of the valuation allowance on our Federal deferred tax
asset. Tangible common equity reflects the increase in equity net
of the increase in goodwill and intangibles resulting from the
acquisition. Regulatory capital increased by approximately $800
million. While the reversal of the deferred tax asset valuation
allowance benefited stockholders’ equity, it had minimal impact on
regulatory capital as the majority of the deferred tax asset
balance was disallowed for regulatory capital purposes. As a
result, capital ratios declined by approximately 200 basis points,
as the benefit from the increase in regulatory capital was more
than offset by the increase in the risk-weighted assets
acquired.
The leverage ratio, which was also impacted by the acquisition,
declined to 15.2%. The ratios presented reflect estimated Common
Equity Tier 1 and Total Capital ratios at September 30 and June 30,
2015 under the fully phased-in Regulatory Capital Rules. The
September 30, 2014 Tier 1 and Total Capital ratios are reported
under the previously effective capital rules. The impact of the
change in Regulatory Capital Rules at January 1, 2015 was
minimal.
Book value per share grew during the quarter as the increase in
equity outpaced the increase in shares outstanding. While tangible
book value per share increased from a year ago, it decreased from
June 30, 2015, as the higher share count offset the net increase in
tangible equity.
During the quarter, we returned nearly $170 million in capital
including $30 million in dividends and $140 million on repurchases
of 3.0 million common shares at an average price of $46.28 per
share.
In October 2015, the Board approved a $0.15 cash dividend
payable on November 30, 2015 to common shareholders of record as of
November 13, 2015.
Asset Quality
Asset Quality*
Change from: ($ in millions) 3Q15 2Q15 3Q14 Prior Quarter
Prior Year Net charge-offs (NCO) $ 61 $ 24 $ 19 $ 38
$ 42 NCO % of AFR 0.86 % 0.48 % 0.39 % 0.38 % 0.47 % Non-accrual $
215 $ 198 $ 201 $ 17 $ 14 OREO $ 127 $ - $ - $ 127 $ 127 Provision
for credit losses $ 50 $ 19 $ 38 $ 31 $ 12
Total Portfolio Allowance as a % of
Finance Receivables (FR)
1.03 % 1.79 % 1.81 % -0.76 % -0.78 %
Allowance for loan losses plus
non-accretable discount as % of FR (before non-accretable discount)
/ Commercial
1.82 % 1.79 % 1.81 % 0.03 % 0.01 % * Certain balances may not sum
due to rounding.
Net charge-offs of $61 million (0. 86%) in the current quarter
included $40 million related to receivables transferred to assets
held for sale. Excluding assets moved to held for sale, net
charge-offs were $21 million, relatively consistent with the prior
quarter. Recoveries of $6 million were down from $11 million in the
prior quarter and unchanged from the year-ago quarter.
Non-accrual loans rose modestly over the prior quarter due to
the addition of a few discrete loans in North America Banking,
including one loan in the energy portfolio, partially offset by a
reduction from the sale of the Mexico business. The provision for
credit losses was up from both the prior and year-ago quarters and
reflects the reserve build on loan growth and a slight increase in
the reserve resulting from the quarter’s purchase accounting
accretion on loans. In addition, the provision was elevated in the
current quarter from the establishment of reserves on certain
acquired non-credit impaired loans in the initial period post
acquisition. Real estate owned as a result of foreclosures of
secured mortgage loans was $127 million at September 30, 2015 and
recorded in the Legacy Consumer Mortgage segment acquired with the
OneWest Bank transaction.
The allowance for loan losses was $335 million (1.03% of finance
receivables, 1.22% excluding loans subject to loss sharing
agreements with the FDIC) at September 30, 2015, compared to $351
million (1.79%) at June 30, 2015 and $358 million (1.81%) at
September 30, 2014. The decrease of $16 million in the allowance
from the prior quarter is primarily due to the decline in
non-specific reserves associated with assets transferred to held
for sale, partially offset by reserve build on new loans and on
certain acquired non-credit impaired loans. The decline in the
percentage of allowance to finance receivables reflects the OneWest
Bank acquisition, which added $14 billion of loans at fair value
with no related allowance at the time of acquisition. Including the
impact of the non-accretable discount on credit impaired loans,
which absorbs credit losses on the discounted loans, the commercial
loan allowance to finance receivables was 1.82%. The consumer loans
ratio was 11% as most of the consumer loans purchased were credit
impaired and are partially covered by loss share agreements with
the FDIC.
As part of the OneWest Bank acquisition CIT’s direct lending to
oil and gas extraction and services increased to approximately $1.0
billion and now comprise 3.1% of total loans. If oil prices remain
at current levels, the portfolio could see additional downward
credit migration.
Segment Highlights:
North America Banking (NAB)
Earnings Summary*
Change from: ($ in millions) 3Q15 2Q15 3Q14 Prior Quarter
Prior Year Interest income $ 276 $ 199 $ 216 $ 77 $
60 Rental income on operating leases 29 28 25 1 4 Interest expense
(72 ) (73 ) (74 ) 1 2
Depreciation on operating lease
equipment
(22 ) (21 ) (20 ) (0 ) (1
) Net finance revenue 210 133 146 78 64 Other income 58 69 71 (11 )
(13 ) Provision for credit losses (47 ) (19 ) (30 ) (28 ) (17 )
Operating expenses (186 ) (135 ) (126 )
(51 ) (60 ) Income before income taxes $ 36
$ 48 $ 62 $ (12 ) $ (26 )
Select
Average Balances Average finance receivables $ 21,204 $ 15,854
$ 16,009 $ 5,350 $ 5,195 Average earning assets $ 20,808 $ 15,397 $
15,746 $ 5,411 $ 5,063
Statistical Data Pre-tax ROAEA 0.69 %
1.23 % 1.57 % -0.55 % -0.88 % Net finance margin 4.04 % 3.44 % 3.71
% 0.60 % 0.33 % New business volume $ 2,067 $ 1,631 $ 1,608 $ 437 $
459 Efficiency ratio 67.4 % 66.9 % 57.8 % 0.5 % 9.6 % * Certain
balances may not sum due to rounding.
NAB pre-tax earnings of $36 million declined from both the prior
and the year-ago quarters, primarily due to a $15 million goodwill
impairment related to the transfer of the Canadian business to held
for sale and elevated credit provision resulting from the
establishment of reserves on certain acquired non-credit impaired
loans. The current quarter includes two months of results of
operations of OneWest Bank, which primarily impacted interest
income, provision for credit losses and operating expenses.
The results continue to reflect a challenging lending
environment and the impact of continued low interest rates. The
current quarter’s results also reflect higher credit costs related
to a few accounts, higher operating expenses, largely reflecting
the acquisition of OneWest Bank, and a decline in other income
which was negatively impacted by the impairment charge referenced
above.
Financing and leasing assets, which comprise the majority of
earning assets, were $24.7 billion, including $1.3 billion of
consumer loans. These assets rose from $16.3 billion at June 30,
2015, and $16.4 billion at September 30, 2014, primarily due to
approximately $8 billion of loans acquired. Assets also grew in
Commercial Services reflecting seasonally-strong factored volume,
Commercial Real Estate driven by strong new business originations,
and Commercial Banking reflecting slower portfolio runoff. New
lending and leasing volume was $2.1 billion, up from $1.6 billion
in both the prior and year-ago quarters. Factored volume increased
slightly from the year-ago quarter and rose nearly $1 billion (16%)
from the prior quarter, in line with seasonal trends.
Net finance revenue (“NFR”) increased from the prior and
year-ago quarters, reflecting higher earning assets and purchase
accounting accretion on loans acquired. Net finance margin
increased from the prior and year-ago quarters as the benefit of
higher yields from purchase accounting accretion on acquired loans
and lower funding costs due to the OneWest Bank acquisition more
than offset lower pricing in certain new originations. The
year ago quarter also benefited from interest recoveries.
The decline in other income from the prior and year-ago quarters
was due primarily to the impairment charge noted above.
Operating expenses rose from both the prior and year-ago
quarters reflecting an increase in employee and deposit-related
costs that resulted from the acquisition of OneWest Bank.
Non-accrual loans were $156 million (0.67% of finance
receivables), compared to $111 million (0.70%) at June 30, 2015,
and $134 million (0.83%) a year ago. The increase in balance
from the prior quarter related primarily to loans in the Commercial
Banking division. The sequential quarter increase in the provision
for credit losses reflects new volume, primarily in Commercial
Banking and Commercial Real Estate, the establishment of reserves
on acquired assets as well as an increase in specific reserves. Net
charge-offs were $33 million (0.62% of average finance
receivables), compared to $26 million (0.66%) in the prior quarter
and $16 million (0.40%) in the year-ago quarter. Net charge-offs
related to assets transferred to held for sale were $14 million in
the current quarter compared to $1 million in the prior quarter and
$11 million in the year-ago quarter.
Transportation & International Finance (TIF)
Earnings Summary*
Change from: ($ in millions) 3Q15 2Q15 3Q14
PriorQuarter
Prior
Year
Interest income $ 74 $ 70 $ 69 $ 4 $ 5 Rental income on
operating leases 507 499 501 8 5 Interest expense (155 ) (165 )
(165 ) 10 10 Depreciation on operating lease equipment (138 ) (137
) (133 ) (1 ) (5 ) Maintenance and other operating lease expenses
(56 ) (49 ) (47 ) (7 ) (9
) Net finance revenue 232 218 226 14 6 Other income 23 17 19 6 4
Provision for credit losses (2 ) - (9 ) (2 ) 8 Operating expenses
(68 ) (78 ) (74 ) 9
5 Income before income taxes $ 185 $
157 $ 162 $ 28 $ 23
Select
Average Balances Average finance receivables $ 3,806 $ 3,657 $
3,433 $ 149 $ 374 Average operating leases $ 14,978 $ 14,720 $
14,713 $ 258 $ 266 Average earning assets $ 20,068 $ 20,156 $
19,894 $ (87 ) $ 175
Statistical Data Pre-tax ROAEA 3.69 %
3.11 % 3.25 % 0.58 % 0.44 % Net finance margin 4.62 % 4.32 % 4.54 %
0.31 % 0.09 % New business volume $ 1,237 $ 826 $ 1,327 $ 411 $ (90
) Efficiency ratio 26.9 % 33.1 % 30.2 % -6.3 % -3.3 % * Certain
balances may not sum due to rounding.
TIF pre-tax earnings were up from the prior and year-ago
quarters, as finance revenue increased with financing and leasing
asset growth, funding costs declined, other income rose from higher
gains on asset sales and operating expenses declined from lower
employee costs.
Financing and leasing assets at September 30, 2015 were $19.6
billion, up from $19.3 billion at June 30, 2015 and $19.1 billion
at September 30, 2014. The increases primarily reflect growth in
Rail and Maritime Finance, partially offset by a reduction in
International Finance. The Aerospace portfolio, while up slightly
from the prior quarter, was down from the year-ago quarter
reflecting asset sales. Assets held for sale totaled $1.0 billion
and largely consists of International Finance assets, including the
U.K. equipment finance portfolio, for which the sale is expected to
close in the fourth quarter, and the China portfolio, for which the
intent to exit was recently announced. New business volume for the
quarter consisted of $0.8 billion of operating lease equipment,
including the delivery of 8 new aircraft, and approximately 2,200
new railcars, and the funding of $0.4 billion of finance
receivables, the majority of which was in Maritime Finance.
Net finance revenue rose from the prior and year-ago quarters,
reflecting asset growth and lower funding costs, partially offset
by yield compression in Rail primarily due to increased maintenance
and other operating lease expense. Net finance margin also
increased from the prior and year-ago quarters reflecting lower
funding costs as well as the aforementioned net finance revenue
trends. Gross yields in Aerospace increased to 11.0% from 10.4% in
the prior quarter due to increased collections, loan prepayment
benefits and a decrease in the interest bearing cash balance (which
is now included in Average Earning Assets), while gross yields in
Rail of 14.5% were down sequentially from 14.7%, reflecting reduced
utilization in energy-related railcars and portfolio growth.
Other income rose from the year-ago and prior quarters, driven
by gains on railcar and commercial aircraft sales.
Non-accrual loans of $52 million (1.58% of finance receivables)
improved from $58 million (1.55%) at June 30, 2015 and increased
from $42 million (1.13%) a year ago and largely consist of
international balances in each of the periods. There was a small
provision for credit losses, compared to a slight benefit in the
prior quarter and a $9 million provision in the year-ago quarter,
primarily reflecting activity in China. Net charge-offs were $27
million this quarter (2.86% of average finance receivables)
compared to net recoveries of $3 million in the prior quarter and
net charge-offs of $4 million (0.44%) in the year-ago quarter. All
but $0.1 million of the current quarter’s charge-offs were related
to China and the majority related to the transfer of the China
portfolio to held for sale.
Operating expenses were down from the prior and year-ago
quarters reflecting lower employee costs, which improved
efficiency.
Utilization trends were mixed compared to the prior quarter. Air
utilization increased slightly to 98% of aircraft equipment leased
or under a commitment at quarter-end. Rail utilization declined
from 98% to 97% reflecting pressures mostly from energy related
industries. All of our aircraft scheduled for delivery in the next
12 months and approximately 60% of the total railcar order-book
have lease commitments.
Legacy Consumer Mortgages (LCM)
Earnings Summary*
Change from: ($ in millions) 3Q15 2Q15 3Q14 Prior Quarter
Prior Year Interest income $ 63 $ - $ - $ 63 $ 63
Interest expense (14 ) - - (14 )
(14 ) Net finance revenue 49 - - 49 49 Other income (1 ) - -
(1 ) (1 ) Provision for credit losses (2 ) - - (2 ) (2 ) Operating
expenses (17 ) - - (17 )
(17 ) Income before income taxes $ 30 $ - $ - $ 30
$ 30
Select Average Balances Average
finance receivables $ 3,637 $ - $ - $ 3,637 $ 3,637 Average earning
assets $ 3,913 $ - $ - $ 3,913 $ 3,913
Statistical Data
Pre-tax ROAEA 3.02 % - - 3.02 % 3.02 % Net finance margin 4.99 % -
- 4.99 % 4.99 % * Certain balances may not sum due to rounding.
LCM includes certain single family residential mortgage loans
and reverse mortgage loans, mostly covered by loss share agreements
acquired in the OneWest Bank acquisition, that will run-off over
time.
Results reflect two months of activity. Revenue is primarily
generated from interest on loans.
Financing and leasing assets totaled $5.7 billion at the
acquisition date, and declined slightly to $5.6 billion at
September 30, 2015. LCM includes single family residential mortgage
loans, totaling $4.7 billion at September 30, 2015, and reverse
mortgage loans totaling $0.9 billion. Approximately $5.0 billion of
these loans are partially covered by loss sharing arrangements with
the FDIC, which will continue to reimburse CIT Bank for certain
realized losses. The indemnification asset, representing the
expected cash flows from the loss share agreements was $397 million
at September 30, 2015.
Non-accrual loans totaled $2 million and related to SFR loans
and there were $1 million in net charge-offs. The loans were
recorded at fair value upon acquisition, with no associated
allowance for loan loss. The provision reflected changes in
portfolio quality, along with draws on existing loans since the
acquisition.
Non-Strategic Portfolios (NSP)
Earnings Summary*
Change from: ($ in millions) 3Q15 2Q15 3Q14 Prior Quarter
Prior Year Interest income $ 7 $ 10 $ 20 $ (3 ) $ (13
) Rental income on operating leases 4 5 9 (1 ) (5 ) Interest
expense (6 ) (9 ) (19 ) 3 13 Depreciation on operating lease
equipment - - (4 )
- 4 Net finance revenue 5 6 7 (1 ) (2 ) Other
income (22 ) (6 ) (47 ) (16 ) 25 Provision for credit losses - - 1
- (1 ) Operating expenses (5 ) (11 )
(17 ) 6 12 Income before income taxes $
(21 ) $ (10 ) $ (56 ) $ (11 ) $ 35
Select
Average Balances Average earning assets $ 312 $ 465 $ 1,027 $
(152 ) $ (715 )
Statistical Data Pre-tax ROAEA -26.90 %
-8.95 % -21.84 % (0.2 ) (0.1 ) Net finance margin 6.79 % 5.34 %
2.80 % 1.45 % 3.98 % New business volume $ 14 $ 26 $ 65 $ (12 ) $
(51 ) * Certain balances may not sum due to rounding.
NSP pre-tax losses were $21 million, up from the prior quarter
and down from the year-ago quarter. The sequential trend reflects
the completion of the sale of the Mexican platform during the
quarter and a loss mainly due to the associated recognition of a
$19 million currency translation adjustment loss, previously
reflected in stockholder’s equity, and reduced operating
expenses.
Financing and leasing assets declined to $0.1 billion at
September 30, 2015, compared to $0.3 billion at June 30, 2015, and
from $0.6 billion a year-ago, due to international portfolio sales
and portfolio run-off.
The only remaining assets in the NSP segment relate to our
Brazilian platform. We have a signed definitive agreement and
received regulatory approval to sell the platform which is expected
to close by the end of 2015.
Corporate and Other
Earnings Summary*
Change from: ($ in millions) 3Q15 2Q15 3Q14 Prior Quarter
Prior Year Interest income $ 18 $ 5 $ 3 $ 14 $ 15
Interest expense (33 ) (18 ) (17 )
(15 ) (16 ) Net finance revenue (15 ) (13 ) (14 ) (2
) (1 ) Other income (19 ) (17 ) (19 ) (3 ) (1 ) Operating expenses
(59 ) (11 ) (18 ) (47 )
(41 ) Income before income taxes $ (92 ) $ (41 ) $ (50 ) $
(52 ) $ (42 )
Select Average Balances Average earning
assets $ 7,347 $ 5,142 $ 4,307 $ 2,204 $ 3,040
Statistical
Data Pre-tax ROAEA -5.03 % -3.18 % -4.67 % -1.85 % -0.36 % Net
finance margin -0.80 % -1.02 % -1.28 % 0.22 % 0.48 % Efficiency
ratio NM -33.6 % -27.1 % NM NM * Certain balances may not sum due
to rounding.
Certain items are not allocated to operating segments and are
included in Corporate and Other, including interest expense,
primarily related to corporate liquidity costs, mark-to-market on
certain derivatives, restructuring charges, certain legal costs and
other operating expenses. Interest income increased from both prior
and year-ago quarters primarily related to income generated from
the investment portfolio, which now includes a Mortgage-Backed
Security portfolio acquired in the OneWest Bank transaction. Other
income included a $24 million negative mark-to-market on the TRS
derivative. Operating expenses were elevated in the quarter
reflecting closing costs and restructuring charges related to the
OneWest Bank transaction.
Discontinued Operations
Income from discontinued operations, net of taxes, was a loss of
$4 million in the current quarter. Discontinued operations in the
current quarter include third-party reverse mortgage servicing
right activities. The Company acquired servicing rights associated
with Home Equity Conversion Mortgages (HECM reverse mortgage loans
or HECM loans) previously securitized in the form of GNMA Home
Equity Conversion Mortgage-Backed Securities (“HMBS”) in connection
with the OneWest Bank transaction. Assets and liabilities of this
business are included in Assets of discontinued operations and
Liabilities of discontinued operations. In the prior year,
discontinued operations included the activity related to our
Student Loan portfolio that was sold in the second quarter of
2014.
Conference Call and Webcast
Chairman and Chief Executive Officer John A. Thain and Chief
Financial Officer Carol Hayles will discuss these results on a
conference call and audio webcast today, November 3, 2015, at 8:00
a.m. (EST). Interested parties may access the conference call live
by dialing 888-317-6003 for U.S., 866-284-3684 for Canadian callers
or 412-317-6061 for international callers and reference access code
“7484525” or access the audio webcast at cit.com/investor. An audio
replay of the call will be available until 11:59 p.m. (EST) on
December 10, 2015, by dialing 877-344-7529 for U.S. callers,
855-669-9658 for Canadian callers or 412-317-0088 for international
callers with the access code “10073687”, or at
cit.com/investor.
About CIT
Founded in 1908, CIT (NYSE: CIT) is a financial holding company
with more than $65 billion in assets. Its principal bank
subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has
more than $30 billion of deposits and more than $40 billion of
assets. It provides financing, leasing and advisory services
principally to middle market companies across more than 30
industries primarily in North America, and equipment financing and
leasing solutions to the transportation sector. It also offers
products and services to consumers through its Internet bank
franchise and a network of retail branches in Southern California,
operating as OneWest Bank, a division of CIT Bank, N.A. cit.com
Forward-Looking Statements
This press release contains forward-looking statements
within the meaning of applicable federal securities laws that are
based upon our current expectations and assumptions concerning
future events, which are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from those anticipated. The words “expect,” “anticipate,”
“estimate,” “forecast,” “initiative,” “objective,” “plan,” “goal,”
“project,” “outlook,” “priorities,” “target,” “intend,” “evaluate,”
“pursue,” “commence,” “seek,” “may,” “would,” “could,” “should,”
“believe,” “potential,” “continue,” or the negative of any of those
words or similar expressions is intended to identify
forward-looking statements. All statements contained in this press
release, other than statements of historical fact, including
without limitation, statements about our plans, strategies,
prospects and expectations regarding future events and our
financial performance, are forward-looking statements that involve
certain risks and uncertainties. While these statements represent
our current judgment on what the future may hold, and we believe
these judgments are reasonable, these statements are not guarantees
of any events or financial results, and our actual results may
differ materially. Important factors that could cause our actual
results to be materially different from our expectations include,
among others, the risk that CIT is unsuccessful in implementing its
strategy and business plan, the risk that CIT is unable to react to
and address key business and regulatory issues, the risk that CIT
is unable to achieve the projected revenue growth from its new
business initiatives or the projected expense reductions from
efficiency improvements, and the risk that CIT becomes subject to
liquidity constraints and higher funding costs. We describe these
and other risks that could affect our results in Item 1A, “Risk
Factors,” of our latest Annual Report on Form 10-K for the year
ended December 31, 2014, which was filed with the Securities and
Exchange Commission. Accordingly, you should not place undue
reliance on the forward-looking statements contained in this press
release. These forward-looking statements speak only as of the date
on which the statements were made. CIT undertakes no obligation to
update publicly or otherwise revise any forward-looking statements,
except where expressly required by law.
Non-GAAP Measurements
Net finance revenue, net operating lease revenue, adjusted net
finance revenue and average earning assets are non-GAAP
measurements used by management to gauge portfolio performance.
Operating expenses excluding restructuring costs and intangible
amortization is a non-GAAP measurement used by management to
compare period over period expenses. Net efficiency ratio measures
operating expenses (net of restructuring costs and intangible
amortization) to our level of total net revenues. Total assets from
continuing operations is a non-GAAP measurement used by management
to analyze the total asset change on a more consistent basis.
Tangible book value and tangible book value per share are non-GAAP
metrics used to analyze banks.
1 Tangible book value and tangible book value per share are
non-GAAP measures. See “Non-GAAP Measurements” at the end of this
press release and page 23 for reconciliation of non-GAAP to GAAP
financial information.
2 Average earning asset components have been changed to include
interest earning cash, investments, securities and indemnification
assets. See “Non-GAAP Measurements” at the end of this press
release and page 23 for reconciliation of Earning Assets non-GAAP
to GAAP financial information.
3 Net finance revenue, net finance margin and net operating
lease revenue are non-GAAP measures. See “Non-GAAP Measurements” at
the end of this press release and page 23 for reconciliation of
non-GAAP to GAAP financial information.
4 Net efficiency ratio is a non-GAAP measure. See “Non-GAAP
Measurements” at the end of this press release and page 23 for
reconciliation of non-GAAP to GAAP financial information.
CIT GROUP INC. AND
SUBSIDIARIES Unaudited Consolidated Statements of
Operations (dollars in millions, except per share data)
Quarters Ended Nine Months Ended September
30, June 30, September 30, September 30,
2015 2015 2014 2015 2014
Interest income Interest and fees on loans $ 414.2 $ 274.8 $ 299.9
$ 961.4 $ 894.7 Other Interest and dividends 23.5
9.0 8.4 41.1 25.6
Total interest income 437.7 283.8
308.3 1,002.5 920.3
Interest expense Interest on borrowings (187.2 ) (193.0 )
(216.0 ) (582.5 ) (642.1 ) Interest on deposits (93.1 )
(72.2 ) (59.2 ) (234.3 ) (167.2 ) Total
interest expense (280.3 ) (265.2 ) (275.2 )
(816.8 ) (809.3 ) Net interest revenue 157.4 18.6
33.1 185.7 111.0 Provision for credit losses (49.9 )
(18.4 ) (38.2 ) (102.9 ) (85.1 ) Net interest
revenue, after credit provision 107.5 0.2
(5.1 ) 82.8 25.9
Non-interest income Rental income on operating leases 539.3 531.7
535.0 1,601.6 1,546.5 Other income 39.2 63.5
24.2 189.1 189.0
Total non-interest income 578.5 595.2
559.2 1,790.7 1,735.5
Non-interest expenses Depreciation on operating lease equipment
(159.1 ) (157.8 ) (156.4 ) (473.7 ) (462.5 ) Maintenance and other
operating lease expenses (55.9 ) (49.4 ) (46.5 ) (151.4 ) (147.1 )
Operating expenses (333.9 ) (235.0 ) (234.5 ) (810.5 ) (693.0 )
Loss on debt extinguishment (0.3 ) (0.1 ) -
(0.4 ) (0.4 ) Total other expenses
(549.2 ) (442.3 ) (437.4 ) (1,436.0 )
(1,303.0 ) Income from continuing operations before benefit
(provision) for income taxes 136.8 153.1 116.7 437.5 458.4 Benefit
(provision) for income taxes 560.0 (37.8 )
401.2 478.2 369.6 Income
from continuing operations, before attribution of noncontrolling
interests 696.8 115.3 517.9 915.7 828.0 Net (income) loss
attributable to noncontrolling interests, after tax -
- (2.5 ) 0.1 (2.5 )
Income from continuing operations 696.8 115.3
515.4 915.8 825.5
Discontinued operation Loss from discontinued operation (5.8 ) - -
(5.8 ) (226.8 ) Provision for Income Taxes 2.1 - (0.5 ) 2.1 (2.5 )
Gain on sale of discontinued operation - -
- - 282.8 (Loss)
income from discontinued operation, net of taxes (3.7 )
- (0.5 ) (3.7 ) 53.5 Net
income $ 693.1 $ 115.3 $ 514.9 $ 912.1
$ 879.0 Basic income per common share Income from
continuing operations $ 3.66 $ 0.66 $ 2.78 $ 5.08 $ 4.34 (Loss)
income from discontinued operation, net of taxes (0.02 )
- - (0.02 ) 0.28
Basic income per common share $ 3.64 $ 0.66 $ 2.78
$ 5.06 $ 4.62 Average number of common shares
- basic (thousands) 190,557 173,785 185,190 180,300 190,465
Diluted income per common share Income from continuing operations $
3.63 $ 0.66 $ 2.76 $ 5.05 $ 4.31 (Loss) income from discontinued
operation, net of taxes (0.02 ) - -
(0.02 ) 0.28 Diluted income per common
share $ 3.61 $ 0.66 $ 2.76 $ 5.03 $
4.59 Average number of common shares - diluted (thousands)
191,803 174,876 186,289 181,350 191,433
CIT GROUP INC. AND SUBSIDIARIES Unaudited
Consolidated Balance Sheets (dollars in millions, except per
share data) September 30, June 30,
December 31, September 30, 2015* 2015
2014 2014 Assets Total cash and
deposits $ 8,259.9 $ 5,465.3 $ 7,119.7 $ 6,214.2 Securities
purchased under agreements to resell 100.0 750.0 650.0 650.0
Investment securities 3,618.8 1,692.9 1,550.3 792.4 Assets held for
sale 2,154.3 1,086.8 1,218.1 1,102.7 Loans 32,406.2 19,649.3
19,495.0 19,785.8 Allowance for loan losses (335.0 )
(350.9 ) (346.4 ) (357.7 ) Loans, net of allowance
for loan losses 32,071.2 19,298.4 19,148.6 19,428.1
Operating lease equipment, net 15,538.2 15,109.6 14,930.4 15,183.8
Indemnification assets
465.0 - - - Goodwill 1,135.1 565.9 571.3 557.3 Intangible assets
201.3 21.4 25.7 33.5 Unsecured counterparty receivable 529.5 538.2
559.2 580.1 Other assets 3,538.4 2,128.7 2,106.7 1,938.9 Assets of
discontinued operation 513.8 - -
- Total assets $ 68,125.5 $ 46,657.2
$ 47,880.0 $ 46,481.0
Liabilities Deposits $ 32,328.9 $ 17,267.8 $ 15,849.8 $
14,483.2 Credit balances of factoring clients 1,609.3 1,373.3
1,622.1 1,433.2 Other liabilities 3,395.7 2,766.9 2,888.8 2,637.2
Borrowings Unsecured borrowings 10,725.0 10,732.8 11,932.4 12,232.3
Structured financings
5,376.5 5,561.4 6,268.7 6,401.4 FHLB advances 3,219.0
147.4 254.7 289.7 Total
long-term borrowings 19,320.5 16,441.6
18,455.8 18,923.4 Liabilities of
discontinued operation 671.9 - -
- Total liabilities 57,326.3
37,849.6 38,816.5 37,477.0
Equity Stockholders' equity Common stock 2.0 2.0 2.0
2.0 Paid-in capital 8,683.5 8,615.6 8,603.6 8,593.6 Retained
earnings 2,443.4 1,781.1 1,615.7 1,392.5 Accumulated other
comprehensive loss (174.3 ) (158.8 ) (133.9 ) (82.1 ) Treasury
stock, at cost (155.9 ) (1,432.8 ) (1,018.5 )
(900.8 ) Total common stockholders' equity 10,798.7 8,807.1
9,068.9 9,005.2 Noncontrolling interests 0.5
0.5 (5.4 ) (1.2 ) Total equity 10,799.2
8,807.6 9,063.5 9,004.0
Total liabilities and equity $ 68,125.5 $ 46,657.2
$ 47,880.0 $ 46,481.0
Book Value Per
Common Share Book value per common share $ 53.74 $ 50.91 $
50.13 $ 49.10 Tangible book value per common share $ 47.09 $ 47.51
$ 46.83 $ 45.87 Outstanding common shares (in thousands) 200,952
172,998 180,921 183,423 * Preliminary
CIT GROUP INC. AND SUBSIDIARIES
Average Balances and Rates (dollars in millions)
Quarters Ended September 30, 2015 June 30,
2015 September 30, 2014
Average Balance
Rate
Average Balance
Rate
Average Balance
Rate Assets Interest bearing deposits $ 5,812.4 0.31
% $ 4,829.4 0.28 % $ 5,517.4 0.32 % Securities purchased under
agreements to resell 387.5 0.62 % 675.0 0.59 % 275.0 0.58 %
Investments 2,663.2 2.76 % 1,510.6 1.22 % 860.9 1.67 % Loans
(including held for sale) U.S. 27,320.5 5.72 % 18,130.4 5.41 %
17,002.0 5.85 % Non-U.S. 1,971.6 8.91 %
2,161.3 9.01 % 3,186.7 8.87 % Total Loans
29,292.1 5.95 % 20,291.7 5.83 %
20,188.7 6.36 % Total interest earning assets / interest
income 38,155.2 4.77 % 27,306.7 4.39 %
26,842.0 4.83 % Operating lease equipment, net
(including held for sale) U.S. 8,114.8 8.75 % 7,859.0 8.93 %
7,959.1 8.86 % Non-U.S. 7,330.3 8.01 % 7,422.2
8.04 % 7,219.3 8.64 % Total operating lease
equipment, net 15,445.1 8.40 % 15,281.2 8.49 % 15,178.4 8.75 %
Indemnification assets
305.6 0.39 % - - - -
Total earning assets 53,905.9 5.81 % 42,587.9
5.91 % 42,020.4 6.29 % Non-interest earning
assets Cash and due from banks 1,902.6 952.7 968.1 Allowance for
loan losses (347.9 ) (358.0 ) (345.3 ) All other non-interest
bearing assets 4,433.4 3,285.5 2,768.3 Assets of discontinued
operation 333.8 - 0.2
Total Average Assets $ 60,227.8 $ 46,468.1 $
45,411.7
Liabilities Borrowings Deposits $
26,356.2
1.41
% $ 16,934.9 1.71 % $ 14,223.6 1.66 % Borrowings 18,258.3
4.10 % 16,540.3 4.67 % 18,430.3
4.69 % Total interest-bearing liabilities
44,614.5
2.51
% 33,475.2 3.17 % 32,653.9 3.37 %
Non-interest bearing deposits
603.9
Credit balances of factoring clients 1,457.8 1,428.6 1,327.1 Other
non-interest bearing liabilities 3,054.0 2,776.7 2,674.4
Liabilities of discontinued operation 432.0 - 0.2 Noncontrolling
interests 0.5 0.5 9.9 Stockholders' equity 10,065.1
8,787.1 8,746.2
Total Average
Liabilities and Stockholders' Equity $ 60,227.8 $
46,468.1 $ 45,411.7
Nine Months Ended
September 30, 2015 September 30, 2014 Assets
Interest bearing deposits $ 5,499.0 0.29 % $ 5,138.7 0.35 %
Securities purchased under agreements to resell 535.0 0.57 % 110.0
0.48 % Investments 1,911.3 1.88 % 1,850.8 0.84 % Loans (including
held for sale) U.S. 21,133.6 5.53 % 16,430.3 5.91 % Non-U.S.
2,118.3 9.13 % 3,471.3 8.61 % Total Loans
23,251.9 5.88 % 19,901.6 6.42 % Total
interest earning assets / interest income 31,197.2
4.49 % 27,001.1 4.78 % Operating lease equipment, net
(including held for sale) U.S. 7,923.0 8.93 % 7,678.0 8.77 %
Non-U.S. 7,386.9 8.05 % 6,895.0 8.35 %
Total operating lease equipment, net 15,309.9 8.50 % 14,573.0 8.57
% Indemnification assets 103.0 0.39 % -
- Total earning assets 46,610.1 5.85 %
41,574.1 6.15 % Non-interest earning assets Cash and due
from banks 1,282.5 974.5 Allowance for loan losses (350.4 ) (352.0
) All other non-interest bearing assets 3,726.0 2,577.2 Assets of
discontinued operation 112.5 1,517.3
Total Average Assets $ 51,380.7 $ 46,291.1
Liabilities Borrowings Deposits $
19,911.2
1.57
% $ 13,544.9 1.65 % Borrowings 17,527.6 4.43 %
18,566.0 4.61 % Total interest-bearing liabilities
37,438.8
2.91
% 32,110.9 3.36 %
Non-interest bearing deposits
203.5
Credit balances of factoring clients 1,467.2 1,311.0 Other
non-interest bearing liabilities 2,916.4 2,799.5 Liabilities of
discontinued operation 145.6 1,296.4 Noncontrolling interests (1.3
) 10.0 Stockholders' equity 9,210.5 8,763.3
Total Average Liabilities and Stockholders' Equity $
51,380.7 $ 46,291.1
CIT GROUP INC. AND SUBSIDIARIES Select
Accounts (dollars in millions) Quarters
Ended Nine Months Ended September 30, June
30, September 30, September 30, 2015
2015 2014 2015 2014 OTHER INCOME
Factoring commissions $ 30.9 $ 27.0 $ 31.1 $ 87.4 $ 88.0 Gains on
sales of leasing equipment 30.7 21.5 22.0 84.2 46.4 Fee revenues
28.3 25.3 23.6 76.2 67.0 Gains on investments 2.0 3.8 5.3 6.5 14.4
Loss on OREO sales (3.2 ) - - (3.2 ) - (Loss) gains on loan and
portfolio sales (14.7 ) 2.1 9.8 (6.0 ) 17.8 Net losses on
derivatives and foreign currency exchange (20.4 ) (5.0 ) (22.8 )
(35.1 ) (21.6 ) Impairment on assets held for sale (23.6 ) (11.0 )
(54.1 ) (44.7 ) (69.5 ) Other revenues 9.2
(0.2 ) 9.3 23.8 46.5
Total other income $ 39.2 $ 63.5 $ 24.2 $
189.1 $ 189.0
OPERATING EXPENSES
Compensation and benefits $ (160.4 ) $ (135.6 ) $ (130.3 ) $ (442.5
) $ (394.9 ) Professional fees (57.3 ) (20.8 ) (22.0 ) (97.6 )
(56.9 ) Technology (29.9 ) (24.9 ) (21.2 ) (77.1 ) (63.1 ) Net
occupancy expense (14.8 ) (8.6 ) (9.1 ) (32.8 ) (26.5 ) Advertising
and marketing (7.4 ) (6.7 ) (7.5 ) (23.2 ) (23.7 ) Other expenses
(54.0 ) (36.8 ) (34.8 ) (126.0 )
(102.7 )
Operating expenses, before intangible
assets amortization
(323.8 ) (233.4 ) (224.9 ) (799.2 )
(667.8 ) Provision for severance and facilities exiting
activities (5.1 ) (1.1 ) (9.2 ) (5.2 ) (24.7 ) Intangible assets
amortization (5.0 ) (0.5 ) (0.4 ) (6.1
) (0.5 ) Total operating expenses $ (333.9 ) $ (235.0 ) $
(234.5 ) $ (810.5 ) $ (693.0 )
September 30, June
30, December 31, September 30, 2015*
2015 2014 2014 TOTAL CASH AND INVESTMENT
SECURITIES Total cash and deposits $ 8,259.9 $ 5,465.3 $
7,119.7 $ 6,214.2 Securities purchased under agreements to resell
100.0 750.0 650.0 650.0 Investment securities 3,618.8
1,692.9 1,550.3 792.4
Total cash and investment securities $ 11,978.7 $ 7,908.2
$ 9,320.0 $ 7,656.6
OTHER ASSETS
Current and deferred federal and state tax assets $ 1,216.7 $ 431.2
$ 483.5 $ 403.8 Deposits on commercial aerospace equipment 810.7
816.9 736.3 693.0 Tax credit investments and investments in
unconsolidated subsidiaries 224.6 78.6 73.4 61.7 Property,
furniture and fixtures 200.2 144.4 126.4 127.8 Fair value of
derivative financial instruments 166.9 101.5 168.0 120.8 Deferred
debt costs and other deferred charges 131.7 126.8 148.1 153.4 Other
real estate owned and repossessed assets 127.9 2.6 0.8 0.7 Tax
receivables, other than income taxes 102.2 103.0 102.0 114.3 Other
557.5 323.7 268.2
263.4 Total other assets $ 3,538.4 $ 2,128.7 $
2,106.7 $ 1,938.9
OTHER LIABILITIES
Equipment maintenance reserves $ 968.4 $ 982.5 $ 960.4 $ 941.2
Accrued expenses and accounts payable 602.7 439.2 478.3 437.4
Current and deferred taxes payable 384.9 345.6 319.1 264.4 Security
and other deposits 296.8 265.9 368.0 299.5 Accrued interest payable
171.4 221.2 243.7 179.5 Valuation adjustment relating to aerospace
commitments 98.4 117.1 121.2 117.9 Other liabilities 873.1
395.4 398.1 397.3
Total other liabilities $ 3,395.7 $ 2,766.9 $ 2,888.8
$ 2,637.2 * Preliminary
CIT GROUP INC. AND SUBSIDIARIES Financing and
Leasing Assets (dollars in millions) September
30, June 30, December 31, September 30,
2015 2015 2014 2014 North America
Banking Commercial Banking Loans
$
10,235.0
$
6,978.2
$
6,889.9
$
7,152.5 Operating lease equipment, net - - - 8.5 Assets held for
sale 413.0 88.3 22.8 85.3 Financing and
leasing assets 10,648.0 7,066.5 6,912.7
7,246.3
Commercial Real Estate Loans 5,092.2
1,941.4 1,768.6 1,751.7
Equipment Finance
Loans 4,290.0 4,810.8 4,717.3 4,710.7 Operating lease equipment,
net 250.9 281.7 265.2 244.1 Assets held for sale 569.5
- - - Financing and leasing assets
5,110.4 5,092.5 4,982.5 4,954.8
Commercial
Services Loans - factoring receivables 2,556.4
2,201.8 2,560.2 2,483.1
Consumer Banking Loans
1,327.7 - - - Assets held for sale 8.1 - -
- Financing and leasing assets 1,335.8 -
- -
Total Segment Loans 23,501.3 15,932.2
15,936.0 16,098.0 Operating lease equipment, net 250.9 281.7 265.2
252.6 Assets held for sale 990.6 88.3 22.8
85.3 Financing and leasing assets 24,742.8
16,302.2 16,224.0 16,435.9
Transportation &
International Finance Aerospace Loans
1,705.6
1,739.6
1,796.5
1,664.4 Operating lease equipment, net 9,045.2 8,816.7 8,949.5
9,216.6 Assets held for sale 102.3 243.8 391.6
109.9 Financing and leasing assets 10,853.1
10,800.1 11,137.6 10,990.9
Rail Loans 129.0
124.7 130.0 120.1 Operating lease equipment, net 6,242.1 6,010.8
5,715.2 5,708.7 Assets held for sale 1.0 0.9
1.2 0.4 Financing and leasing assets 6,372.1
6,136.4 5,846.4 5,829.2
Maritime Finance Loans
1,470.9 1,274.4 1,006.7 839.5 Assets held for sale 39.1
56.4 19.7 - Financing and leasing assets
1,510.0 1,330.8 1,026.4 839.5
International Finance Loans - 578.4 625.7 1,063.7 Operating
lease equipment, net - 0.4 0.5 5.9 Assets held for sale
905.5 404.4 402.7 354.4 Financing and leasing
assets 905.5 983.2 1,028.9 1,424.0
Total Segment Loans 3,305.5 3,717.1 3,558.9 3,687.7
Operating lease equipment, net 15,287.3 14,827.9 14,665.2 14,931.2
Assets held for sale 1,047.9 705.5 815.2
464.7 Financing and leasing assets 19,640.7
19,250.5 19,039.3 19,083.6
Legacy Consumer
Mortgages Single Family Residential Mortgages Loans
4,702.3 - - - Assets held for sale 21.2 - -
- Financing and leasing assets 4,723.5 -
- -
Reverse Mortgages Loans 897.1 - - - Assets
held for sale 15.7 - - - Financing and
leasing assets 912.8 - - -
Total
Segment Loans 5,599.4 - - - Assets held for sale 36.9
- - - Financing and leasing assets
5,636.3 - - -
Non-Strategic Portfolios
Loans - - 0.1 0.1 Assets held for sale 78.9 293.0
380.1 552.7 Financing and leasing assets 78.9
293.0 380.2 552.8
Total financing and
leasing assets $ 50,098.7 $ 35,845.7 $ 35,643.5 $ 36,072.3
CIT GROUP INC. AND SUBSIDIARIES Credit Metrics
(dollars in millions) Quarters Ended
September 30, 2015 June 30, 2015 September 30,
2014 Gross Charge-offs to Average Finance Receivables
Transportation & International Finance(1) $ 28.3 2.97 % $ 2.9
0.32 % $ 4.5 0.52 % North America Banking(2) 37.6 0.71 % 31.3 0.79
% 20.7 0.52 % Legacy Consumer Mortgages 1.5 0.16 %
- - - -
Total CIT $ 67.4
0.94 % $ 34.2 0.70 % $ 25.2 0.52 %
Nine
Months Ended September 30, 2015 2014
Transportation & International Finance(1) $ 34.4 1.27 % $ 34.7
1.31 % North America Banking(2) 92.3 0.70 % 56.5 0.50 % Legacy
Consumer Mortgages 1.5 0.16 % - - Non-Strategic Portfolios(3)
- - 7.5 5.04 %
Total CIT $ 128.2
0.76 % $ 98.7 0.69 %
Quarters Ended
September 30, 2015 June 30, 2015 September 30,
2014 Net Charge-offs to Average Finance Receivables
Transportation & International Finance(1) $ 27.2 2.86 % $ (2.7
) (0.29 %) $ 3.9 0.44 % North America Banking(2) 32.9 0.62 % 26.2
0.66 % 16.0 0.40 % Legacy Consumer Mortgages 1.2 0.13 % - - - -
Non-Strategic Portfolios(3) - - - -
(0.7 )
(4
)
Total CIT $ 61.3 0.86 % $ 23.5 0.48 % $ 19.2
0.39 %
Nine Months Ended September 30,
2015 2014 Transportation & International
Finance(1) $ 26.0 0.96 % $ 30.0 1.13 % North America Banking(2)
78.5 0.60 % 40.8 0.36 % Legacy Consumer Mortgages 1.2 0.13 % -
-
Non-Strategic Portfolios(3) - - 5.2
3.56 %
Total CIT $ 105.7 0.63 % $ 76.0 0.53 %
Non-accruing Loans to Finance Receivables(4)
September 30, 2015 June 30, 2015 December 31,
2014 September 30, 2014 Transportation &
International Finance $ 52.1 1.58 % $ 57.8 1.55 % $ 37.2 1.05 % $
41.8 1.13 % North America Banking(2) 156.3 0.67 % 111.0 0.70 %
100.9 0.63 % 134.1 0.83 % Legacy Consumer Mortgages 1.8 0.03 % - -
- - - - Non-Strategic Portfolios 4.5
(4
)
29.2
(4
)
22.4
(4
)
25.2
(4
)
Total CIT $ 214.7 0.66 % $ 198.0 1.01 % $
160.5 0.82 % $ 201.1 1.02 %
PROVISION AND
ALLOWANCE COMPONENTS Provision for Credit Losses
Quarters Ended Nine Months Ended September 30,
June 30, September 30, September 30,
2015 2015 2014 2015 2014
Specific allowance - impaired loans $ 0.8 $ 2.7 $ 3.3 $ 5.9 $ (4.9
) Non-specific allowance (12.2 ) (7.8 ) 15.7 (8.7 ) 14.0 Net
charge-offs 61.3 23.5 19.2
105.7 76.0 Totals $ 49.9
$ 18.4 $ 38.2 $ 102.9 $ 85.1
Allowance for Loan Losses September 30, June
30, December 31, September 30, 2015
2015 2014 2014 Specific allowance - impaired
loans $ 18.3 $ 17.5 $ 12.4 $ 25.5 Non-specific allowance
316.7 333.4 334.0 332.2
Totals $ 335.0 $ 350.9 $ 346.4 $ 357.7
Allowance for loan losses as a percentage of total
finance receivables 1.03 % 1.79 % 1.78 % 1.81 %
Allowance for loan losses as a percent of
finance receivable/commercial
1.31 % 1.79 % 1.78 % 1.81 % Allowance for loan losses plus
non-accretable discount as a percent of finance receivables (before
the non-accretable discount)/commercial 1.82 %
1.79
%
1.78
%
1.81
%
Allowance for loan losses as a percent of finance
receivables/consumer
11.27
%
-
-
-
In certain instances, we use the term finance receivables
synonymously with “Loans”, as presented on the balance sheet.
1) TIF charge-offs related to the transfer of receivables to
assets held for sale for the quarter ended September 30, 2015
totaled $26 million, and was less than $1 million each of the first
two quarters. TIF charge-offs for the nine months ended September
30, 2014 included $12 million, related to the transfer of
receivables to assets held for sale. 2) NAB charge-offs for the
quarters ended September 30, 2015 and June 30, 2015 included $14
million and $1 million, respectively, and $27 million year to date,
related to the transfer of receivables to assets held for sale. For
the quarter and nine months ended September 30, 2014, the
respective amounts were $11 million and $17 million. 3) NSP
charge-offs for the nine months ended September 30, 2015 included
$7 million related to the transfer of receivables to assets held
for sale. 4) Non-accrual loans include loans held for sale. NSP
non-accrual loans reflected loans held for sale; since portfolio
loans were insignificant, no % is displayed.
CIT GROUP INC. AND SUBSIDIARIES
Segment Results (dollars in millions) Quarters
Ended Nine Months Ended September 30, June
30, September 30, September 30, 2015
2015 2014 2015 2014 North America
Banking Total interest income $ 275.6 $ 199.0 $ 215.8 $ 670.7 $
618.0 Total interest expense (72.2 )
(73.3 ) (74.2 ) (219.6 ) (211.2 ) Provision for credit losses (46.9
) (18.8 ) (29.7 ) (89.7 ) (55.5 ) Rental income on operating leases
28.5
27.9 24.7 83.6 72.6 Other income 58.2 69.2 71.1 193.7 202.6
Depreciation on operating lease equipment (21.5 )
(21.1 ) (20.1 ) (63.3 ) (62.0 ) Operating expenses (185.9 )
(135.4 ) (125.9 ) (456.0 ) (367.6 )
Income before provision for income taxes $ 35.8 $ 47.5
$ 61.7 $ 119.4 $ 196.9 Funded new
business volume $ 2,067.2 $ 1,630.5 $ 1,608.0 $ 5,051.8 $ 4,581.0
Average Earning Assets $ 20,808.0 $ 15,396.7 $ 15,745.5 $ 17,154.5
$ 14,940.6 Average Finance Receivables $ 21,204.1 $ 15,854.4 $
16,009.3 $ 17,587.4 $ 15,221.6
Transportation &
International Finance Total interest income $ 73.8 $ 69.9 $
68.8 $ 212.1 $ 217.7 Total interest expense (155.0 ) (164.9 )
(165.3 ) (488.5 ) (481.1 ) Provision for credit losses (1.5 ) 0.4
(9.1 ) (11.7 ) (29.8 ) Rental income on operating leases 506.6
498.6 501.4 1,502.7 1,446.1 Other income 22.9 16.6 18.8 73.8 36.4
Depreciation on operating lease equipment (137.6 ) (136.7 ) (132.8
) (410.4 ) (386.1 ) Maintenance and other operating lease expenses
(55.9 ) (49.4 ) (46.5 ) (151.4 ) (147.1 ) Operating expenses
(68.4 ) (77.6 ) (73.8 ) (227.8 ) (228.8
) Income before provision for income taxes $ 184.9 $ 156.9
$ 161.5 $ 498.8 $ 427.3 Funded new
business volume $ 1,236.8 $ 825.8 $ 1,326.8 $ 2,587.8 $ 3,786.1
Average Earning Assets $ 20,068.4 $ 20,155.6 $ 19,893.7 $ 20,143.9
$ 18,969.1 Average Finance Receivables $ 3,806.2 $ 3,657.3 $
3,432.7 $ 3,620.5 $ 3,535.8
Legacy Consumer Mortgages Total
interest income $ 62.8 $ - $ - $ 62.8 $ - Total interest expense
(14.0 ) - - (14.0 ) - Provision for credit losses (1.5 ) - - (1.5 )
- Other income (0.9 ) - - (0.9 ) - Operating expenses (16.9
) - - (16.9 ) -
Income before provision for income taxes $ 29.5 $ - $
- $ 29.5 $ - Average Earning Assets $ 3,912.6
$ - $ - $ 1,318.5 $ - Average Finance Receivables $ 3,637.0 $ - $ -
$ 1,225.7 $ -
Non-Strategic Portfolios Total interest income
$ 7.2 $ 10.2 $ 20.4 $ 29.7 $ 74.4 Total interest expense (6.1 )
(9.2 ) (18.6 ) (26.1 ) (66.5 ) Provision for credit losses - - 0.7
- 0.4 Rental income on operating leases 4.2 5.2 8.9 15.3 27.8 Other
income (21.8 ) (5.7 ) (47.1 ) (35.3 ) (38.8 ) Depreciation on
operating lease equipment - - (3.5 ) - (14.4 ) Operating expenses
(4.5 ) (10.9 ) (16.9 ) (27.8 )
(56.6 ) Loss before provision for income taxes $ (21.0 ) $ (10.4 )
$ (56.1 ) $ (44.2 ) $ (73.7 ) Funded new business volume $ 14.2 $
26.4 $ 64.7 $ 78.3 $ 180.6 Average Earning Assets $ 312.3 $ 464.6 $
1,027.4 $ 430.1 $ 1,324.3 Average Finance Receivables $ - $ - $ 0.1
$ - $ 196.5
Corporate and Other Total interest income $ 18.3
$ 4.7 $ 3.3 $ 27.2 $ 10.2 Total interest expense (33.0 ) (17.8 )
(17.1 ) (68.6 ) (50.5 ) Provision for credit losses - - (0.1 ) -
(0.2 ) Other income (19.2 ) (16.6 ) (18.6 ) (42.2 ) (11.2 )
Operating expenses (58.2 ) (11.1 ) (17.9 ) (82.0 ) (40.0 ) Loss on
debt extinguishments (0.3 ) (0.1 ) -
(0.4 ) (0.4 ) Loss before provision for income taxes
$ (92.4 ) $ (40.9 ) $ (50.4 ) $ (166.0 ) $ (92.1 ) Average Earning
Assets $ 7,346.8 $ 5,142.4 $ 4,307.2 $ 6,095.9 $ 5,032.4
Total
CIT Total interest income $ 437.7 $ 283.8 $ 308.3 $ 1,002.5 $
920.3 Total interest expense (280.3 ) (265.2 ) (275.2 ) (816.8 )
(809.3 ) Provision for credit losses (49.9 ) (18.4 ) (38.2 ) (102.9
) (85.1 ) Rental income on operating leases 539.3 531.7 535.0
1,601.6 1,546.5 Other income 39.2 63.5 24.2 189.1 189.0
Depreciation on operating lease equipment (159.1 ) (157.8 ) (156.4
) (473.7 ) (462.5 ) Maintenance and other operating lease expenses
(55.9 ) (49.4 ) (46.5 ) (151.4 ) (147.1 ) Operating expenses / loss
on debt extinguishment (334.2 ) (235.1 )
(234.5 ) (810.9 ) (693.4 ) Income from continuing
operations before provision for income taxes $ 136.8 $ 153.1
$ 116.7 $ 437.5 $ 458.4 Funded new
business volume $ 3,318.2 $ 2,482.7 $ 2,999.5 $ 7,717.9 $ 8,547.7
Average Earning Assets $ 52,448.1 $ 41,159.3 $ 40,973.8 $ 45,142.9
$ 40,266.4 Average Finance Receivables $ 28,647.3 $ 19,511.7 $
19,442.1 $ 22,433.6 $ 18,953.9
CIT GROUP INC. AND SUBSIDIARIES Segment Margin
(dollars in millions) Quarters Ended Nine
Months Ended September 30, June 30, September
30, September 30, 2015 2015 2014
2015 2014 North America Banking Average
Earning Assets (AEA) Commercial Banking $ 9,456.9 $ 7,031.7 $
7,430.5 $ 7,835.4 $ 7,334.8 Commercial Real Estate 3,993.9 1,860.6
1,727.4 2,552.9 1,660.3 Equipment Finance 5,657.4 5,568.2 5,539.7
5,585.5 4,925.6 Commercial Services 833.0 936.2 1,047.9 888.6
1,019.9 Consumer Banking 866.8 - - 292.1 -
Gross yield
Commercial Banking 4.86 % 4.43 % 5.15 % 4.60 % 5.21 % Commercial
Real Estate 5.09 % 4.00 % 4.30 % 4.54 % 4.14 % Equipment Finance
8.47 % 8.61 % 8.03 % 8.52 % 8.49 % Commercial Services 5.22 % 4.53
% 5.76 % 4.83 % 5.06 % Consumer Banking 3.58 % - - 3.55 % -
Total AEA $ 20,808.0 $ 15,396.7 $ 15,745.5 $ 17,154.5 $
14,940.6 Gross yield 5.85 % 5.89 % 6.11 % 5.86 % 6.16 % Net Finance
Margin 4.04 % 3.44 % 3.71 % 3.66 % 3.72 %
Transportation
& International Finance Average Earning Assets (AEA)
Aerospace $ 11,251.2 $ 11,643.3 $ 11,658.7 $ 11,614.1 $ 11,017.5
Rail 6,314.7 6,115.3 5,855.8 6,123.3 5,572.8 Maritime Finance
1,443.3 1,198.5 702.9 1,234.7 589.4 International Finance 1,059.2
1,198.5 1,676.3 1,171.8 1,789.4
Gross yield Aerospace 10.98
% 10.41 % 10.87 % 10.58 % 11.33 % Rail 14.50 % 14.65 % 14.41 %
14.58 % 14.34 % Maritime Finance 5.04 % 5.12 % 5.00 % 5.04 % 5.11 %
International Finance 9.25 % 8.77 % 8.08 % 8.77 % 7.91 %
Total AEA $ 20,068.4 $ 20,155.6 $ 19,893.7 $ 20,143.9 $
18,969.1 Gross yield 11.57 % 11.28 % 11.46 % 11.35 % 11.69 % Net
Finance Margin 4.62 % 4.32 % 4.54 % 4.40 % 4.57 %
Legacy
Consumer Mortgages Average Earning Assets (AEA) Single
Family Residential Mortgages $ 3,321.9 $ - $ - $ 1,119.5 $ -
Reverse Mortgages 590.7 - -
199.0
-
Gross yield Single Family Residential Mortgages 5.68 % - -
5.61 % - Reverse Mortgages 10.59 % - - 10.47 % -
Total AEA $
3,912.6 $ - $ - $ 1,318.5 $ - Gross yield 6.42 % - - 6.35 % - Net
Finance Margin 4.99 % - - 4.94 % - Gross Yield includes interest
income and rental income as a % of AEA.
Net Finance Margin (NFM) reflects Net
Finance Revenue divided by AEA.
CIT GROUP INC. AND
SUBSIDIARIES Non-GAAP Disclosures (dollars in
millions) Non-GAAP financial measures disclosed by
management are meant to provide additional information and insight
relative to business trends to investors and, in certain cases, to
present financial information as measured by rating agencies and
other users of financial information. These measures are not in
accordance with, or a substitute for, GAAP and may be different
from, or inconsistent with, non-GAAP financial measures used by
other companies.
Quarters Ended Nine Months Ended
September 30, June 30, September 30,
September 30, Total Net Revenues(1)
2015 2015 2014 2015 2014
Interest income $ 437.7 $ 283.8 $ 308.3 $ 1,002.5 $ 920.3 Rental
income on operating leases 539.3 531.7
535.0 1,601.6 1,546.5
Finance revenue 977.0 815.5 843.3 2,604.1 2,466.8 Interest expense
(280.3 ) (265.2 ) (275.2 ) (816.8 ) (809.3 ) Depreciation on
operating lease equipment (159.1 ) (157.8 ) (156.4 ) (473.7 )
(462.5 ) Maintenance and other operating lease expenses
(55.9 ) (49.4 ) (46.5 ) (151.4 ) (147.1
)
Net finance revenue (NFR) 481.7 343.1 365.2 1,162.2
1,047.9 Other income 39.2 63.5
24.2 189.1 189.0
Total net
revenues $ 520.9 $ 406.6 $ 389.4 $ 1,351.3
$ 1,236.9
NFR as a % of AEA 3.67
% 3.33 % 3.57 % 3.43 % 3.47 %
Net Operating Lease Revenues(2) Rental income on
operating leases $ 539.3 $ 531.7 $ 535.0 $ 1,601.6 $ 1,546.5
Depreciation on operating lease equipment (159.1 ) (157.8 ) (156.4
) (473.7 ) (462.5 ) Maintenance and other operating lease expenses
(55.9 ) (49.4 ) (46.5 ) (151.4 )
(147.1 )
Net operating lease revenue $ 324.3 $ 324.5
$ 332.1 $ 976.5 $ 936.9
September 30, June 30, December 31,
September 30, Earning Assets(3) 2015
2015 2014 2014 Loans $ 32,406.2 $ 19,649.3 $
19,495.0 $ 19,785.8 Operating lease equipment, net 15,538.2
15,109.6 14,930.4 15,183.8 Assets held for sale 2,154.3 1,086.8
1,218.1 1,102.7 Credit balances of factoring clients (1,609.3 )
(1,373.3 ) (1,622.1 ) (1,433.2 ) Interest bearing cash 6,606.3
4,224.8 6,241.2 5,322.0
Investment securities
3,618.8 1,692.9 1,550.3 792.4
Securities purchased under agreements to
resell
100.0 750.0 650.0 650.0
Indemnification assets
465.0 - - -
Total earning assets $ 59,279.5 $ 41,140.1 $ 42,462.9
$ 41,403.5
Average Earning Assets (for the
respective quarters)
$ 52,448.1 $ 41,159.3 $ 41,935.7 $ 40,973.8
Quarters Ended Nine Months Ended
September 30, June 30, September 30,
September 30, Adjusted Operating Expenses 2015
2015 2014 2015 2014 Operating expenses
$ (333.9 ) $ (235.0 ) $ (234.5 ) $ (810.5 ) $ (693.0 ) Provision
for severance and facilities exiting activities 5.1 1.1 9.2 5.2
24.7 Intangible amortization 5.0 0.5
0.4 6.1 0.5 Operating
expenses exclusive of restructuring costs and intangible
amortization(4) $ (323.8 ) $ (233.4 ) $ (224.9 ) $ (799.2 ) $
(667.8 ) Operating expenses (exclusive of restructuring
costs and intangible amortization) as a % of AEA (2.47 %)
(2.27 %) (2.20 %) (2.36 %) (2.21 %)
Total Net Revenue $ 520.9 $ 406.6 $ 389.4 $ 1,351.3 $
1,236.9
Operating expenses exclusive of
restructuring costs and intangible amortization(4)
$ (323.8 ) $ (233.4 ) $ (224.9 ) $ (799.2 ) $ (667.8 ) Net
Efficiency Ratio(5) 62.2 % 57.4 % 57.8 % 59.1 % 54.0 %
September 30, June 30, December 31,
September 30, 2015 2015 2014
2014
Continuing Operations Total
Assets(6)
Total Assets $ 68,125.5 $ 46,657.2 $ 47,880.0 $ 46,481.0 Assets of
discontinued operation 513.8 - -
- Continuing operations total assets $
67,611.7 $ 46,657.2 $ 47,880.0 $ 46,481.0
September 30, June 30,
December 31, September 30, Tangible Book
Value(7) 2015 2015 2014 2014
Total common stockholders' equity $ 10,798.7 $ 8,807.1 $ 9,068.9 $
9,005.2 Less: Goodwill (1,135.1 ) (565.9 ) (571.3 ) (557.3 )
Intangible assets (201.3 ) (21.4 ) (25.7 )
(33.5 ) Tangible book value $ 9,462.3 $ 8,219.8
$ 8,471.9 $ 8,414.4 (1) Total
net revenues are the combination of net finance revenue and other
income and is an aggregation of all sources of revenue for the
Company. Total net revenues are used by management to monitor
business performance. (2) Total net operating lease revenues are
the combination of rental income on operating leases less
depreciation on operating lease equipment and maintenance and other
operating lease expenses. Total net operating lease revenues are
used by management to monitor portfolio performance. (3) Earning
assets are utilized in certain revenue and earnings ratios. Earning
assets are net of credit balances of factoring clients. This net
amount represents the amounts we fund.
(4) Operating expenses exclusive of
restructuring costs and intangible amortization is a non-GAAP
measure used by management to compare period over period
expenses.
(5) Net efficiency ratio is a non-GAAP
measurement used by management to measure operating expenses
(before restructuring costs and intangible amortization) to the
level of total net revenues.
(6) Total assets from continuing
operations is a non-GAAP measurement used by management to analyze
the total asset change on a more consistent basis.
(7) Tangible book value is a non-GAAP measure, which represents an
adjusted common shareholders’ equity balance that has been reduced
by goodwill and intangible assets. Tangible book value is used to
compute a per common share amount, which is used to evaluate our
use of equity.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151103005682/en/
CIT MEDIA RELATIONS:Matt Klein, 973-597-2020Vice
President, Media RelationsMatt.Klein@cit.comorCIT INVESTOR
RELATIONS:Barbara Callahan, 973-740-5058Senior Vice
PresidentBarbara.Callahan@cit.com
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