CIT
Group Inc. (NYSE: CIT), today reported net income of $109 million,
$0.55 per diluted share, for the quarter ended March 31, 2014, compared
to net income of $163 million, $0.81 per diluted share, for the first
quarter of 2013. First quarter results were primarily impacted by lower
levels of interest income, higher maintenance and other operating lease
expenses and an increase in the provision for credit losses.
“We made progress this quarter in growing commercial assets,
restructuring the organization and returning capital to shareholders,”
said John
Thain, Chairman and Chief Executive Officer. “However, our financial
results were negatively impacted by lower finance margin and fee income.
In the year ahead, we will continue to focus on building long-term
shareholder value by expanding our businesses, managing expenses and
growing CIT Bank.”
Summary of First Quarter Financial Results
Total assets at March 31, 2014 were $48.6 billion, up from $47.1 billion
at December 31, 2013 and from $44.6 billion at March 31, 2013. Financing
and leasing assets in North American Commercial Finance and
Transportation & International Finance increased to $32.8 billion, an
increase of $1.3 billion from the prior quarter and $3.3 billion from
the year-ago quarter. The increase was driven by the acquisition of
Nacco in the first quarter, which added approximately $0.65 billion of
financing and leasing assets, as well as solid origination volumes. The
Non-Strategic Portfolio, which includes $3.3 billion of student loans,
declined by approximately $200 million from December 31, 2013 to $4.4
billion and by $1.2 billion from a year ago, reflecting portfolio run
off and asset sales. The student loan portfolio was subsequently sold in
April 2014. Total loans of $18.6 billion declined slightly from December
31, 2013 and by $3.5 billion from a year ago, reflecting the movement of
the student loan portfolio into assets held for sale in the fourth
quarter of 2013. Operating lease equipment increased $1.1 billion from
December 31, 2013 and $1.9 billion from a year ago to $14.2 billion,
reflecting the European rail and other equipment purchases. Cash and
investments of $9.0 billion were up $0.3 billion from December 31, 2013
and $1.8 billion from March 31, 2013.
Net finance revenue1 was $324 million compared to $366
million in the year-ago quarter and $337 million in the prior quarter.
Average earning assets were $35.4 billion in the current quarter, up
from $33.0 billion in the year-ago quarter and $34.2 billion in the
prior quarter. Net finance revenue as a percentage of average earning
assets (“net finance margin”) was 3.66%, compared to 4.43% in the
year-ago quarter and 3.95% in the prior quarter. Excluding the impact of
debt redemptions2 in prior periods, net finance margin
declined from 4.64% and 4.00% in the year-ago quarter and the prior
quarter respectively. The reduction from the year-ago quarter primarily
reflects the sale of higher-yielding Dell Europe assets and declines in
operating lease margin and net FSA accretion. The reduction from the
prior quarter reflects higher maintenance and other operating lease
expenses, as well as lower portfolio yields and net FSA accretion
related to the student loan portfolio.
Other income of $74 million increased from $70 million in the year-ago
quarter and declined from $128 million in the prior quarter. The prior
quarter included net benefits from asset sales and a workout related
claim.
Operating expenses were $236 million compared to $235 million in the
year-ago quarter and $288 million in the prior quarter. Excluding
restructuring costs3, operating expenses were $226 million,
compared to $230 million in the year-ago quarter and $269 million in the
prior quarter. The current period included costs related to the European
rail business, while the prior quarter included a $45 million charge
related to the Tyco Tax Agreement settlement and a benefit from the
recovery of legal expenses. Headcount at March 31, 2014 was
approximately 3,200, down from approximately 3,490 a year ago and
approximately 3,240 at December 31, 2013.
The provision for income taxes was $14 million, primarily reflecting the
recognition of income tax expense on international earnings, down
slightly from $15 million in the year-ago quarter and down from $31
million in the prior quarter, which included a $13 million income tax
expense related to the sale of a leverage lease.
Credit and Allowance for Loan Losses
Credit metrics remained at or near cycle lows. Non-accrual loans
declined to $218 million, or 1.18% of finance receivables, at March 31,
2014 from $241 million (1.29%) at December 31, 2013 and $294 million
(1.33%) at March 31, 2013.
Net charge-offs were $36 million, or 0.76% as a percentage of average
finance receivables, versus $10 million (0.18%) in the year-ago quarter
(0.22% excluding the student loan portfolio that was transferred to held
for sale in December 2013) and $15 million (0.27%) in the prior quarter.
Recoveries of $9 million were lower than the $15 million recorded in
both the year-ago and prior quarters. Net charge-offs in Transportation
& International Finance were up from year-ago levels, but in line with
the prior quarter. Net charge-offs in North American Commercial Finance
remain at historically low levels, but were up from both the year-ago
and prior quarters. Net charge-offs in the Non-Strategic Portfolios,
which totaled $7 million this quarter compared to $3 million in the
year-ago and $6 million in the prior quarter, were essentially the
result of the transfer of receivables to Assets Held For Sale. The
provision for credit losses was $37 million, up from $20 million in the
year-ago quarter and $14 million in the prior quarter, reflecting an
increase in non-specific reserves.
The allowance for loan losses was $353 million (1.90% of finance
receivables) at March 31, 2014, compared to $356 million (1.91%) at
December 31, 2013 and $386 million (1.74%) at March 31, 2013. The
year-ago quarter includes U.S. government guaranteed student loans that
had no related reserves. As a percentage of the commercial portfolio,
the allowance for loan losses was 2.08% at March 31, 2013. The allowance
for loan losses reflects the stable credit metrics and the composition
of the portfolio. Specific reserves were $26 million at March 31, 2014,
compared to $30 million at December 31, 2013 and $42 million at March
31, 2013.
Capital and Funding
Preliminary Tier 1 and Total Capital ratios at March 31, 2014 were 16.1%
and 16.8%, respectively, compared to 16.7% and 17.4% at December 31,
2013 and 16.4% and 17.1% at March 31, 2013. Preliminary risk-weighted
assets totaled $51.7 billion at March 31, 2014, up from $50.6 billion at
December 31, 2013 and from $49.3 billion at March 31, 2013, primarily
reflecting growth in assets. Book value per share at March 31, 2014 grew
to $45.06 from $44.78 at December 31, 2013 and $42.21 at March 31, 2013.
Tangible book value per share4 at March 31, 2014 declined to
$42.90, reflecting the goodwill recorded on the European rail
acquisition, compared to $42.98 at December 31, 2013 and $40.35 at March
31, 2013.
Cash and short-term investment securities totaled $8.6 billion at March
31, 2014, and was comprised of $6.8 billion of cash and $1.8 billion of
short-term investment securities, compared to $7.6 billion at December
31, 2013 and $6.9 billion at March 31, 2013. Cash and short-term
investment securities at March 31, 2014 consisted of $3.0 billion
related to the bank holding company and $2.4 billion at CIT Bank, with
the remainder comprised of cash at operating subsidiaries and restricted
balances (of which $1.3 billion was used to repay unsecured debt at
maturity on April 1, 2014). CIT had approximately $1.4 billion of unused
and committed liquidity under a $1.5 billion revolving credit facility
at March 31, 2014.
Deposits grew approximately $0.7 billion during the quarter to $13.2
billion, in line with the asset growth at CIT Bank. At March 31, 2014,
deposits represented approximately 37% of CIT Group funding, with
secured and unsecured borrowings comprising 25% and 38% of the funding
mix, respectively. The weighted average coupon rate on outstanding
deposits and long-term borrowings was 3.09% at March 31, 2014, compared
to 3.07% at December 31, 2013 and 3.13% at March 31, 2013.
On February 19, 2014, CIT issued $1 billion in aggregate principal
amount of senior unsecured notes due 2019 that bear interest at a per
annum rate of 3.875%.
In January 2014, our Board of Directors approved the repurchase of up to
$307 million of common stock through December 31, 2014. In April 2014,
the Board of Directors authorized an additional share repurchase of up
to $300 million of common stock, bringing the total authorization to
$607 million in 2014. During the first quarter we repurchased over 2.9
million shares and in April we have repurchased nearly 1.6 million
shares, aggregating 4.5 million shares at an average price of $46.84, or
approximately $211 million. On April 17, 2014, the Board of Directors
declared a quarterly cash dividend of $0.10 per share payable on May 30,
2014 to shareholders of record on May 15, 2014.
Segment Highlights
Effective January 1, 2014, we realigned our organizational structure
into three operating segments, Transportation & International Finance,
North American Commercial Finance and Non-Strategic Portfolios. See page
18 for a description of the new segments. The discussion below and
segment information in the following tables have been recast in
accordance with the new segments. In addition, a Form 8-K was filed on
April 22, 2014 that provides additional information regarding the
realignment, as well as financial results as of and for the years ended
December 31, 2013, 2012 and 2011 and as of and for the quarters ended
March 31, June 30, September 30 and December 31 in each of 2013 and 2012.
Transportation & International Finance
Pre-tax earnings for the quarter were $118 million, down from $139
million in the year-ago quarter primarily due to higher credit costs and
operating expenses, partially offset by higher net finance revenue.
Pre-tax earnings were essentially flat sequentially. Financing and
leasing assets grew to $17.6 billion at March 31, 2014, up sequentially
from $16.4 billion and from $15.2 billion a year ago. The sequential
increase included $0.8 billion of growth in Rail, due in large part to
the European rail acquisition that added $0.65 billion in operating
lease equipment (~9,500 railcars), $0.2 billion in Aerospace and $0.1
billion in Maritime. New business volume was just over $1.0 billion,
which consisted of the delivery of nine aircraft and approximately 1,400
railcars and funding of $0.4 billion of finance receivables.
Net finance revenue was $202 million, up from the year-ago quarter, as
the impact from asset growth offset margin compression, and up
sequentially. Net finance margin was 4.73% compared to 4.76% in the year
ago quarter and 4.83% in the prior quarter. The margin decline reflects
higher operating lease and maintenance expense which was partially
offset by an increase in the loan portfolio yield due to a prepayment in
the current quarter. Other income of $7 million was down from the
year-ago quarter, which had higher gains on sales of operating lease
equipment, and flat sequentially.
Provision for credit losses was $12 million, up from the year-ago
quarter, which benefited from a reserve release in Aerospace, and down
slightly sequentially. Charge-offs were concentrated in the
International portfolio.
Operating expenses were $80 million, up from a year ago and sequentially
and reflect the European rail acquisition and our continued investment
in the Maritime platform.
Utilization remained strong with 99% of commercial aircraft and 98% of
rail equipment on lease or under a commitment at quarter-end. All
aircraft scheduled for delivery in the next 12 months, and approximately
84% of all railcars on order, have lease commitments. Gross yields in
Aerospace improved to 12.6%, reflecting a prepayment in the loan
portfolio, while gross rental yields in Rail declined slightly to 14.6%
due in part to the addition of the European rail portfolio.
North American Commercial Finance
Pre-tax earnings for the quarter were $43 million, down from $59 million
in the year-ago quarter and from $135 million in the prior quarter. The
decline from the year-ago quarter was largely attributable to a decline
in finance revenue in Corporate Finance and Equipment Finance, while the
sequential quarter decline reflected higher credit costs and fewer gains
related to asset sales and workouts.
Financing and leasing assets grew to $15.2 billion, up from $15.0
billion at December 31, 2013 and from $14.3 billion at March 31, 2013,
reflecting solid new business volumes. Funded loan and lease volume
totaled $1.4 billion, up from $1.3 billion in the year-ago quarter, and
down from $1.8 billion in the prior quarter, in line with typical
seasonal trends. The increase in volume from the year-ago quarter
primarily reflected an increase in middle market corporate lending.
Net finance revenue of $125 million declined from both the year-ago and
prior quarters. Net finance margin was 3.64% compared to 4.82% in the
year-ago quarter and 4.14% in the prior quarter. The decline in net
finance margin from prior periods reflects the reduction of benefits
from interest recoveries, lower portfolio yields in Corporate Finance
and Equipment Finance, as well as lower benefits from net FSA accretion.
Other income of $62 million declined slightly from $64 million in the
year-ago quarter and from $107 million in the prior quarter. The prior
quarter included $36 million in benefits from a workout related claim
and a gain on the sale of a leverage lease. Operating expenses were $122
million, improved from $128 million in the year-ago quarter largely due
to lower headcount. Operating expenses increased from the prior quarter,
which included benefits from the recovery of legal expenses.
Credit metrics remained at or near cycle lows. Non-accrual loans
declined to $131 million (0.88% of finance receivables) from $147
million (1.00%) at December 31, 2013 and $197 million (1.39%) a year
ago. The provision for credit losses was $23 million, modestly lower
than in the year-ago quarter, but up from the prior quarter, in which
there were net recoveries. Net charge-offs were $16 million (0.43% of
average finance receivables), compared to $6 million (0.17%) in the
year-ago quarter and a net recovery of $2 million last quarter. The
current period had a lower level of recoveries, and a higher level of
charged-off accounts that had specific reserves in Corporate Finance.
Non-Strategic Portfolios
Pre-tax losses for the quarter were $6 million, compared to pre-tax
losses of $5 million in the year-ago quarter and $9 million in the prior
quarter. The changes from both the year-ago quarter and the sequential
quarter reflect lower operating expenses offset by reduced net finance
revenue from the continued decline in asset levels.
Financing and leasing assets at March 31, 2014 totaled $4.4 billion,
which included approximately $3.3 billion of student loans, $0.4 billion
of small business lending loans and $0.7 billion of international
assets. Financing and leasing assets were down from $4.6 billion at
December 31, 2013 and from $5.6 billion at March 31, 2013, primarily due
to loan sales and portfolio runoff.
As of April 25, 2014, we completed the sale of the student loan
portfolio along with certain secured debt and servicing rights. A
portion of the cash proceeds was used to repay $0.8 billion of debt
secured by student loans. As a result, in the second quarter the student
loan business will be reported as discontinued operations in which we
expect to recognize a net gain of over $50 million.
Corporate and Other
Certain items are not allocated to operating segments and are included
in Corporate and Other, including unallocated interest expense,
primarily related to corporate liquidity costs, restructuring charges
and certain legal costs. Operating expenses included restructuring
charges of $10 million in the current quarter, compared to $6 million in
the year-ago quarter and $18 million in the prior quarter. The prior
quarter also included $45 million related to settlement of the Tyco Tax
Agreement.
CIT Bank
Total assets were $16.8 billion at March 31, 2014, up from $16.1 billion
at December 31, 2013 and $13.3 billion a year ago. CIT Bank funded $1.7
billion of new business volume. Funded volumes were up 10% from the
year-ago quarter and down 22% sequentially. Loans totaled $12.6 billion,
up from $12.0 billion at December 31, 2013 and $9.6 billion at March 31,
2013. Operating lease equipment of $1.5 billion, primarily railcars and
now two aircraft, increased from $1.2 billion at December 31, 2013 and
$0.8 billion at March 31, 2013. Cash totaled $2.4 billion at March 31,
2014, down from $2.5 billion at December 31, 2013, and from $2.8 billion
at March 31, 2013. Preliminary Tier 1 and Total Capital ratios were
16.1% and 17.4%, respectively, at March 31, 2014.
Deposits at quarter-end were $13.1 billion, up from $12.5 billion at
December 31, 2013 and $10.6 billion at March 31, 2013. The weighted
average rate on outstanding deposits was 1.58% at March 31, 2014.
See attached tables for financial statements and supplemental
financial information.
Conference Call and Webcast
Chairman and Chief Executive Officer John
A. Thain and Chief Financial Officer Scott
T. Parker will discuss these results on a conference call and
audio webcast today, April 29, 2014, at 8:00 a.m. (EDT). 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 “9597756” or access the
audio webcast at cit.com/investor.
An audio replay of the call will be available until 11:59 p.m. (EDT) on
May 13, 2014, 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 “10043436”, or at cit.com/investor.
About CIT
Founded in 1908, CIT (NYSE: CIT) is a financial holding company with
more than $35 billion in financing and leasing assets. It provides
financing, leasing and advisory services to its clients and their
customers across more than 30 industries. CIT maintains leadership
positions in middle
market lending, factoring,
retail
and equipment
finance, as well as aerospace,
equipment
and rail
leasing. CIT’s U.S. bank subsidiary CIT Bank (Member FDIC), BankOnCIT.com,
offers a variety of savings options designed to help customers achieve
their financial goals. 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, the risk that CIT is delayed in implementing its branch
strategy, 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, 2013, 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, and adjusted net
finance revenue are non-GAAP measurements used by management to gauge
portfolio performance. Operating expenses excluding restructuring costs
is a non-GAAP measurement used by management to compare period over
period expenses. Tangible book value and tangible book value per share
are non-GAAP metrics used to analyze banks.
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1
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Net finance revenue, finance margin and net operating lease
revenue are non-GAAP measures. See “Non-GAAP Measurements” at the
end of this press release and page 17 for reconciliation of
non-GAAP to GAAP financial information.
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2
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Debt redemption impacts include accelerated FSA net
discount/(premium) accretion. See “Non-GAAP Measurements” at the
end of this press release and page 17 for reconciliation of
non-GAAP to GAAP financial information.
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3
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Operating expenses excluding restructuring costs is a non-GAAP
measure. See “Non-GAAP Measurements” at the end of this press
release and page 17 for reconciliation of non-GAAP to GAAP
financial information.
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4
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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 17 for reconciliation of non-GAAP to GAAP
financial information.
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CIT GROUP INC. AND SUBSIDIARIES
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Unaudited Consolidated Statements of Operations
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(dollars in millions, except per share data)
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Quarters Ended
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March 31,
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December 31,
|
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March 31,
|
|
|
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2014
|
|
2013
|
|
2013
|
|
|
|
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|
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|
|
|
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|
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Interest income
|
|
|
|
|
|
|
|
|
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Interest and fees on loans
|
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$
|
314.5
|
|
|
$
|
330.1
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|
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$
|
350.3
|
|
|
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Interest and dividends on interest bearing deposits and investments
|
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|
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8.8
|
|
|
|
8.6
|
|
|
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6.4
|
|
|
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Total interest income
|
|
|
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323.3
|
|
|
|
338.7
|
|
|
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356.7
|
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|
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Interest expense
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|
|
|
|
|
|
|
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Interest on long-term borrowings
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|
(239.0
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)
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|
(238.2
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)
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|
(249.6
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)
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Interest on deposits
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|
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(51.9
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)
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(48.5
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)
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(42.3
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)
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Total interest expense
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|
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(290.9
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)
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|
|
(286.7
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)
|
|
|
(291.9
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)
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|
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Net interest revenue
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|
|
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32.4
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|
|
|
52.0
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|
|
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64.8
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Provision for credit losses
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|
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(36.7
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)
|
|
|
(14.4
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)
|
|
|
(19.5
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)
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Net interest revenue, after credit provision
|
|
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|
(4.3
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)
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|
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37.6
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45.3
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Non-interest income
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Rental income on operating leases
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491.9
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463.8
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476.4
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Other income
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74.2
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|
|
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127.9
|
|
|
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70.1
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Total non-interest income
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|
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566.1
|
|
|
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591.7
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|
|
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546.5
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Other expenses
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|
|
|
|
|
|
|
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Depreciation on operating lease equipment
|
|
|
|
(148.8
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)
|
|
|
(139.5
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)
|
|
|
(133.3
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)
|
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Maintenance and other operating lease expenses
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|
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(51.6
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)
|
|
|
(39.0
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)
|
|
|
(42.4
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)
|
|
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Operating expenses
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|
|
|
(235.7
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)
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|
|
(287.5
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)
|
|
|
(235.3
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)
|
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Total other expenses
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|
|
|
(436.1
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)
|
|
|
(466.0
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)
|
|
|
(411.0
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)
|
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Income before provision for income taxes
|
|
|
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125.7
|
|
|
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163.3
|
|
|
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180.8
|
|
|
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Provision for income taxes
|
|
|
|
(14.2
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)
|
|
|
(31.2
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)
|
|
|
(15.2
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)
|
|
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Net income before attribution of noncontrolling interests
|
|
|
|
111.5
|
|
|
|
132.1
|
|
|
|
165.6
|
|
|
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Net income attributable to noncontrolling interests, after tax
|
|
|
|
(2.4
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)
|
|
|
(2.2
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)
|
|
|
(3.0
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)
|
|
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Net income
|
|
|
$
|
109.1
|
|
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$
|
129.9
|
|
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$
|
162.6
|
|
|
|
|
|
|
|
|
|
|
|
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Basic income per common share
|
|
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$
|
0.56
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|
|
$
|
0.65
|
|
|
$
|
0.81
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|
|
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Diluted income per common share
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|
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$
|
0.55
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|
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$
|
0.65
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|
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$
|
0.81
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|
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Average number of common shares - basic (thousands)
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|
|
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196,089
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|
|
|
198,774
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|
|
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201,149
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|
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Average number of common shares - diluted (thousands)
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|
|
|
197,047
|
|
|
|
200,394
|
|
|
|
201,779
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|
|
|
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|
CIT GROUP INC. AND SUBSIDIARIES
|
|
Unaudited Consolidated Balance Sheets
|
|
(dollars in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
2014*
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Total cash and deposits
|
|
$
|
6,781.8
|
|
|
$
|
6,139.2
|
|
|
$
|
5,540.8
|
|
|
Investment securities
|
|
|
2,255.0
|
|
|
|
2,630.7
|
|
|
|
1,724.1
|
|
|
Assets held for sale
|
|
|
4,403.0
|
|
|
|
4,377.9
|
|
|
|
646.8
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
18,571.7
|
|
|
|
18,629.2
|
|
|
|
22,120.4
|
|
|
Allowance for loan losses
|
|
|
(352.6
|
)
|
|
|
(356.1
|
)
|
|
|
(386.0
|
)
|
|
Loans, net of allowance for loan losses
|
|
|
18,219.1
|
|
|
|
18,273.1
|
|
|
|
21,734.4
|
|
|
|
|
|
|
|
|
|
|
Operating lease equipment, net
|
|
|
14,182.4
|
|
|
|
13,035.4
|
|
|
|
12,290.6
|
|
|
Goodwill
|
|
|
403.5
|
|
|
|
334.6
|
|
|
|
345.9
|
|
|
Unsecured counterparty receivable
|
|
|
559.5
|
|
|
|
584.1
|
|
|
|
630.8
|
|
|
Other assets
|
|
|
1,773.8
|
|
|
|
1,764.0
|
|
|
|
1,650.0
|
|
|
Total assets
|
|
$
|
48,578.1
|
|
|
$
|
47,139.0
|
|
|
$
|
44,563.4
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Deposits
|
|
$
|
13,189.3
|
|
|
$
|
12,526.5
|
|
|
$
|
10,701.9
|
|
|
Credit balances of factoring clients
|
|
|
1,213.5
|
|
|
|
1,336.1
|
|
|
|
1,237.7
|
|
|
Other liabilities
|
|
|
2,704.4
|
|
|
|
2,676.4
|
|
|
|
2,544.7
|
|
|
Long-term borrowings
|
|
|
|
|
|
|
|
Unsecured borrowings
|
|
|
13,532.3
|
|
|
|
12,531.6
|
|
|
|
11,801.7
|
|
|
Secured borrowings
|
|
|
9,136.8
|
|
|
|
9,218.4
|
|
|
|
9,775.3
|
|
|
Total long-term borrowings
|
|
|
22,669.1
|
|
|
|
21,750.0
|
|
|
|
21,577.0
|
|
|
Total liabilities
|
|
|
39,776.3
|
|
|
|
38,289.0
|
|
|
|
36,061.3
|
|
|
Equity
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
Common stock
|
|
|
2.0
|
|
|
|
2.0
|
|
|
|
2.0
|
|
|
Paid-in capital
|
|
|
8,569.7
|
|
|
|
8,555.4
|
|
|
|
8,514.4
|
|
|
Retained earnings
|
|
|
670.3
|
|
|
|
581.0
|
|
|
|
88.0
|
|
|
Accumulated other comprehensive loss
|
|
|
(76.0
|
)
|
|
|
(73.6
|
)
|
|
|
(83.3
|
)
|
|
Treasury stock, at cost
|
|
|
(378.1
|
)
|
|
|
(226.0
|
)
|
|
|
(26.7
|
)
|
|
Total common stockholders' equity
|
|
|
8,787.9
|
|
|
|
8,838.8
|
|
|
|
8,494.4
|
|
|
Noncontrolling interests
|
|
|
13.9
|
|
|
|
11.2
|
|
|
|
7.7
|
|
|
Total equity
|
|
|
8,801.8
|
|
|
|
8,850.0
|
|
|
|
8,502.1
|
|
|
Total liabilities and equity
|
|
$
|
48,578.1
|
|
|
$
|
47,139.0
|
|
|
$
|
44,563.4
|
|
|
|
|
|
|
|
|
|
|
Book Value Per Common Share
|
|
|
|
|
|
|
|
Book value per common share
|
|
$
|
45.06
|
|
|
$
|
44.78
|
|
|
$
|
42.21
|
|
|
Tangible book value per common share
|
|
$
|
42.90
|
|
|
$
|
42.98
|
|
|
$
|
40.35
|
|
|
Outstanding common shares (in thousands)
|
|
|
195,030
|
|
|
|
197,404
|
|
|
|
201,247
|
|
|
|
|
|
|
|
|
|
|
* Preliminary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIT GROUP INC. AND SUBSIDIARIES
|
|
|
Select Data
|
|
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
OTHER INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Factoring commissions
|
|
|
$
|
28.6
|
|
|
$
|
31.0
|
|
|
$
|
30.0
|
|
|
|
|
|
|
|
|
|
Fee revenues
|
|
|
|
21.6
|
|
|
|
28.4
|
|
|
|
20.4
|
|
|
|
|
|
|
|
|
|
Gains on sales of leasing equipment
|
|
|
|
8.4
|
|
|
|
43.7
|
|
|
|
22.3
|
|
|
|
|
|
|
|
|
|
Recoveries of loans charged off pre-emergence and loans charged off
prior to transfer to held for sale
|
|
|
|
5.2
|
|
|
|
5.1
|
|
|
|
4.2
|
|
|
|
|
|
|
|
|
|
Gains on loan and portfolio sales
|
|
|
|
3.5
|
|
|
|
24.3
|
|
|
|
5.3
|
|
|
|
|
|
|
|
|
|
Gain on investments
|
|
|
|
3.5
|
|
|
|
3.6
|
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
Counterparty receivable accretion
|
|
|
|
2.2
|
|
|
|
3.2
|
|
|
|
3.1
|
|
|
|
|
|
|
|
|
|
Impairment on assets held for sale
|
|
|
|
(1.1
|
)
|
|
|
(34.7
|
)
|
|
|
(22.6
|
)
|
|
|
|
|
|
|
|
|
Losses on derivatives and foreign currency exchange
|
|
|
|
(7.1
|
)
|
|
|
(1.7
|
)
|
|
|
(0.6
|
)
|
|
|
|
|
|
|
|
|
Other revenues
|
|
|
|
9.4
|
|
|
|
25.0
|
|
|
|
5.6
|
|
|
|
|
|
|
|
|
|
Total other income
|
|
|
$
|
74.2
|
|
|
$
|
127.9
|
|
|
$
|
70.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
(139.1
|
)
|
|
|
(130.0
|
)
|
|
|
(137.0
|
)
|
|
|
|
|
|
|
|
|
Technology
|
|
|
|
(21.1
|
)
|
|
|
(21.1
|
)
|
|
|
(19.8
|
)
|
|
|
|
|
|
|
|
|
Professional fees
|
|
|
|
(18.0
|
)
|
|
|
(19.2
|
)
|
|
|
(18.7
|
)
|
|
|
|
|
|
|
|
|
Provision for severance and facilities exiting activities
|
|
|
|
(9.9
|
)
|
|
|
(18.5
|
)
|
|
|
(5.7
|
)
|
|
|
|
|
|
|
|
|
Net occupancy expense
|
|
|
|
(8.9
|
)
|
|
|
(8.3
|
)
|
|
|
(9.4
|
)
|
|
|
|
|
|
|
|
|
Advertising and marketing
|
|
|
|
(7.9
|
)
|
|
|
(7.5
|
)
|
|
|
(7.7
|
)
|
|
|
|
|
|
|
|
|
Other expenses*
|
|
|
|
(30.8
|
)
|
|
|
(82.9
|
)
|
|
|
(37.0
|
)
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
$
|
(235.7
|
)
|
|
$
|
(287.5
|
)
|
|
$
|
(235.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE BALANCES AND RATES
|
|
|
Quarters Ended
|
|
|
|
|
|
March 31, 2014
|
|
December 31, 2013
|
|
March 31, 2013
|
|
|
Assets
|
|
|
Average
Balance
|
|
Rate
|
|
Average
Balance
|
|
Rate
|
|
Average
Balance
|
|
Rate
|
|
|
Interest bearing deposits
|
|
|
$
|
5,298.1
|
|
|
|
0.35
|
%
|
|
$
|
5,660.4
|
|
|
0.34
|
%
|
|
$
|
5,866.9
|
|
0.24
|
%
|
|
|
Investments
|
|
|
|
2,499.7
|
|
|
|
0.67
|
%
|
|
|
2,338.8
|
|
|
0.65
|
%
|
|
|
1,536.2
|
|
0.76
|
%
|
|
|
Loans (including held for sale)
|
|
|
|
22,882.6
|
|
|
|
5.82
|
%
|
|
|
22,720.9
|
|
|
6.18
|
%
|
|
|
21,617.9
|
|
6.86
|
%
|
|
|
Total interest earning assets
|
|
|
|
30,680.4
|
|
|
|
4.40
|
%
|
|
|
30,720.1
|
|
|
4.61
|
%
|
|
|
29,021.0
|
|
5.13
|
%
|
|
|
Operating lease equipment, net (including held for sale)
|
|
|
|
13,900.8
|
|
|
|
8.39
|
%
|
|
|
12,918.9
|
|
|
8.83
|
%
|
|
|
12,734.6
|
|
9.45
|
%
|
|
|
Other
|
|
|
|
3,408.0
|
|
|
|
|
|
2,987.1
|
|
|
|
|
|
2,535.2
|
|
|
|
|
Total average assets
|
|
|
$
|
47,989.2
|
|
|
|
|
$
|
46,626.1
|
|
|
|
|
$
|
44,290.8
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
$
|
12,812.2
|
|
|
|
1.62
|
%
|
|
$
|
12,148.5
|
|
|
1.60
|
%
|
|
$
|
10,199.7
|
|
1.66
|
%
|
|
|
Long-term borrowings
|
|
|
|
22,252.2
|
|
|
|
4.30
|
%
|
|
|
21,558.2
|
|
|
4.42
|
%
|
|
|
21,794.9
|
|
4.58
|
%
|
|
|
Total interest-bearing liabilities
|
|
|
|
35,064.4
|
|
|
|
3.32
|
%
|
|
|
33,706.7
|
|
|
3.40
|
%
|
|
|
31,994.6
|
|
3.65
|
%
|
|
|
Credit balances of factoring clients
|
|
|
|
1,276.3
|
|
|
|
|
|
1,346.5
|
|
|
|
|
|
1,187.3
|
|
|
|
|
Other liabilities and equity
|
|
|
|
11,648.5
|
|
|
|
|
|
11,572.9
|
|
|
|
|
|
11,108.9
|
|
|
|
|
Total average liabilities and equity
|
|
|
$
|
47,989.2
|
|
|
|
|
$
|
46,626.1
|
|
|
|
|
$
|
44,290.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*The quarter ended December 31, 2013 included $45 million related
to the Tyco tax agreement settlement charge.
|
|
|
|
|
|
|
|
|
|
CIT GROUP INC. AND SUBSIDIARIES
|
|
Financing and Leasing Assets
|
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
2014
|
|
2013
|
|
2013
|
|
Transportation & International Finance
|
|
|
|
|
|
|
|
Aerospace
|
|
|
|
|
|
|
|
Loans
|
|
$
|
1,247.1
|
|
$
|
1,247.7
|
|
$
|
1,181.8
|
|
Operating lease equipment, net
|
|
|
8,595.5
|
|
|
8,267.9
|
|
|
7,908.2
|
|
Assets held for sale
|
|
|
24.8
|
|
|
148.8
|
|
|
213.9
|
|
Financing and leasing assets
|
|
|
9,867.4
|
|
|
9,664.4
|
|
|
9,303.9
|
|
Rail
|
|
|
|
|
|
|
|
Loans
|
|
|
123.3
|
|
|
107.2
|
|
|
128.2
|
|
Operating lease equipment, net
|
|
|
5,325.0
|
|
|
4,503.9
|
|
|
4,099.5
|
|
Assets held for sale
|
|
|
1.4
|
|
|
3.3
|
|
|
0.2
|
|
Financing and leasing assets
|
|
|
5,449.7
|
|
|
4,614.4
|
|
|
4,227.9
|
|
Maritime Finance
|
|
|
|
|
|
|
|
Loans
|
|
|
529.8
|
|
|
412.6
|
|
|
290.7
|
|
Operating lease equipment, net
|
|
|
-
|
|
|
-
|
|
|
7.5
|
|
Financing and leasing assets
|
|
|
529.8
|
|
|
412.6
|
|
|
298.2
|
|
International Finance
|
|
|
|
|
|
|
|
Loans
|
|
|
1,653.3
|
|
|
1,726.9
|
|
|
1,357.3
|
|
Operating lease equipment, net
|
|
|
6.4
|
|
|
6.7
|
|
|
9.4
|
|
Assets held for sale
|
|
|
66.4
|
|
|
6.4
|
|
|
-
|
|
Financing and leasing assets
|
|
|
1,726.1
|
|
|
1,740.0
|
|
|
1,366.7
|
|
Total Segment
|
|
|
|
|
|
|
|
Loans
|
|
|
3,553.5
|
|
|
3,494.4
|
|
|
2,958.0
|
|
Operating lease equipment, net
|
|
|
13,926.9
|
|
|
12,778.5
|
|
|
12,024.6
|
|
Assets held for sale
|
|
|
92.6
|
|
|
158.5
|
|
|
214.1
|
|
Financing and leasing assets
|
|
|
17,573.0
|
|
|
16,431.4
|
|
|
15,196.7
|
|
|
|
|
|
|
|
|
|
North American Commercial Finance
|
|
|
|
|
|
|
|
Real Estate Finance
|
|
|
|
|
|
|
|
Loans
|
|
|
1,615.2
|
|
|
1,554.8
|
|
|
992.2
|
|
Corporate Finance
|
|
|
|
|
|
|
|
Loans
|
|
|
6,974.3
|
|
|
6,831.8
|
|
|
6,650.5
|
|
Operating lease equipment, net
|
|
|
11.5
|
|
|
6.2
|
|
|
8.0
|
|
Assets held for sale
|
|
|
67.0
|
|
|
38.2
|
|
|
8.5
|
|
Financing and leasing assets
|
|
|
7,052.8
|
|
|
6,876.2
|
|
|
6,667.0
|
|
Equipment Finance
|
|
|
|
|
|
|
|
Loans
|
|
|
4,041.6
|
|
|
4,044.1
|
|
|
3,926.3
|
|
Operating lease equipment, net
|
|
|
198.6
|
|
|
234.3
|
|
|
175.8
|
|
Financing and leasing assets
|
|
|
4,240.2
|
|
|
4,278.4
|
|
|
4,102.1
|
|
Commercial Services
|
|
|
|
|
|
|
|
Loans - factoring receivables
|
|
|
2,271.7
|
|
|
2,262.4
|
|
|
2,525.2
|
|
Total Segment
|
|
|
|
|
|
|
|
Loans
|
|
|
14,902.8
|
|
|
14,693.1
|
|
|
14,094.2
|
|
Operating lease equipment, net
|
|
|
210.1
|
|
|
240.5
|
|
|
183.8
|
|
Assets held for sale
|
|
|
67.0
|
|
|
38.2
|
|
|
8.5
|
|
Financing and leasing assets
|
|
|
15,179.9
|
|
|
14,971.8
|
|
|
14,286.5
|
|
Non-Strategic Portfolios
|
|
|
|
|
|
|
|
Loans
|
|
|
115.4
|
|
|
441.7
|
|
|
5,068.2
|
|
Operating lease equipment, net
|
|
|
45.4
|
|
|
16.4
|
|
|
82.2
|
|
Assets held for sale
|
|
|
4,243.4
|
|
|
4,181.2
|
|
|
424.2
|
|
Financing and leasing assets
|
|
|
4,404.2
|
|
|
4,639.3
|
|
|
5,574.6
|
|
Total financing and leasing assets
|
|
$
|
37,157.1
|
|
$
|
36,042.5
|
|
$
|
35,057.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIT GROUP INC. AND SUBSIDIARIES
|
|
Select Balance Sheet Accounts
|
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
2014*
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
INVESTMENT SECURITIES
|
|
|
|
|
|
|
|
Short-term investments
|
|
$
|
1,812.5
|
|
$
|
1,461.0
|
|
$
|
1,400.5
|
|
Other debt and equity investments
|
|
|
442.5
|
|
|
1,169.7
|
|
|
323.6
|
|
Total investment securities
|
|
$
|
2,255.0
|
|
$
|
2,630.7
|
|
$
|
1,724.1
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS
|
|
|
|
|
|
|
|
Deposits on commercial aerospace equipment
|
|
$
|
761.2
|
|
$
|
831.3
|
|
$
|
685.2
|
|
Deferred costs, including debt related costs
|
|
|
160.8
|
|
|
158.5
|
|
|
164.4
|
|
Tax receivables, other than income taxes
|
|
|
143.0
|
|
|
132.2
|
|
|
84.1
|
|
Executive retirement plan and deferred compensation
|
|
|
100.0
|
|
|
101.3
|
|
|
104.1
|
|
Accrued interest and dividends
|
|
|
91.3
|
|
|
96.8
|
|
|
96.1
|
|
Furniture and fixtures
|
|
|
85.9
|
|
|
85.3
|
|
|
77.7
|
|
Prepaid expenses
|
|
|
68.8
|
|
|
64.3
|
|
|
75.9
|
|
Other counterparty receivables
|
|
|
30.7
|
|
|
45.9
|
|
|
57.4
|
|
Other
|
|
|
332.1
|
|
|
248.4
|
|
|
305.1
|
|
Total other assets
|
|
$
|
1,773.8
|
|
$
|
1,764.0
|
|
$
|
1,650.0
|
|
|
|
|
|
|
|
|
|
OTHER LIABILITIES
|
|
|
|
|
|
|
|
Equipment maintenance reserves
|
|
$
|
915.2
|
|
$
|
904.2
|
|
$
|
860.9
|
|
Accrued expenses and accounts payable
|
|
|
374.8
|
|
|
490.1
|
|
|
475.1
|
|
Current taxes payable and deferred taxes
|
|
|
316.6
|
|
|
179.8
|
|
|
157.4
|
|
Security and other deposits
|
|
|
245.4
|
|
|
227.4
|
|
|
231.5
|
|
Accrued interest payable
|
|
|
215.2
|
|
|
247.1
|
|
|
199.3
|
|
Valuation adjustment relating to aerospace commitments
|
|
|
128.3
|
|
|
137.5
|
|
|
184.9
|
|
Other liabilities
|
|
|
508.9
|
|
|
490.3
|
|
|
435.6
|
|
Total Other Liabilities
|
|
$
|
2,704.4
|
|
$
|
2,676.4
|
|
$
|
2,544.7
|
|
* Preliminary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIT GROUP INC. AND SUBSIDIARIES
|
|
Credit Metrics
|
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
|
March 31, 2014
|
|
December 31, 2013
|
|
March 31, 2013
|
|
Gross Charge-offs to Average Finance Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation & International Finance(1)
|
|
$
|
14.3
|
|
|
|
1.61
|
%
|
|
$
|
13.0
|
|
|
|
1.55
|
%
|
|
$
|
4.2
|
|
|
|
0.60
|
%
|
|
North American Commercial Finance(2)
|
|
|
22.6
|
|
|
|
0.61
|
%
|
|
|
10.4
|
|
|
|
0.28
|
%
|
|
|
14.2
|
|
|
|
0.42
|
%
|
|
Non-Strategic Portfolios(3)
|
|
|
7.5
|
|
|
|
9.94
|
%
|
|
|
6.2
|
|
|
|
0.62
|
%
|
|
|
5.9
|
|
|
|
0.46
|
%
|
|
Total CIT
|
|
$
|
44.4
|
|
|
|
0.95
|
%
|
|
$
|
29.6
|
|
|
|
0.54
|
%
|
|
$
|
24.3
|
|
|
|
0.46
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-offs to Average Finance Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation & International Finance(1)
|
|
$
|
13.0
|
|
|
|
1.47
|
%
|
|
$
|
11.7
|
|
|
|
1.40
|
%
|
|
$
|
1.1
|
|
|
|
0.15
|
%
|
|
North American Commercial Finance(2)
|
|
|
16.0
|
|
|
|
0.43
|
%
|
|
|
(2.3
|
)
|
|
|
-0.06
|
%
|
|
|
5.8
|
|
|
|
0.17
|
%
|
|
Non-Strategic Portfolios(3)
|
|
|
6.6
|
|
|
|
8.77
|
%
|
|
|
5.6
|
|
|
|
0.55
|
%
|
|
|
2.6
|
|
|
|
0.20
|
%
|
|
Total CIT
|
|
$
|
35.6
|
|
|
|
0.76
|
%
|
|
$
|
15.0
|
|
|
|
0.27
|
%
|
|
$
|
9.5
|
|
|
|
0.18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing Loans To Finance Receivables(4)
|
|
March 31, 2014
|
|
December 31, 2013
|
|
March 31, 2013
|
|
Transportation & International Finance
|
|
$
|
35.9
|
|
|
|
1.01
|
%
|
|
$
|
35.3
|
|
|
|
1.01
|
%
|
|
$
|
23.6
|
|
|
|
0.80
|
%
|
|
North American Commercial Finance
|
|
|
131.3
|
|
|
|
0.88
|
%
|
|
|
147.4
|
|
|
|
1.00
|
%
|
|
|
196.5
|
|
|
|
1.39
|
%
|
|
Non-Strategic Portfolios
|
|
|
51.2
|
|
|
|
44.37
|
%
|
|
|
58.0
|
|
|
|
13.14
|
%
|
|
|
74.0
|
|
|
|
1.46
|
%
|
|
Total CIT
|
|
$
|
218.4
|
|
|
|
1.18
|
%
|
|
$
|
240.7
|
|
|
|
1.29
|
%
|
|
$
|
294.1
|
|
|
|
1.33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND ALLOWANCE COMPONENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Credit Losses
|
|
Allowance for Loan Losses
|
|
|
|
Quarters Ended
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2013
|
|
|
Specific allowance - commercial impaired loans
|
|
$
|
(4.7
|
)
|
|
$
|
(3.5
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
25.7
|
|
|
$
|
30.4
|
|
|
$
|
41.6
|
|
|
Non-specific allowance - commercial
|
|
|
5.8
|
|
|
|
2.9
|
|
|
|
13.6
|
|
|
|
326.9
|
|
|
|
325.7
|
|
|
|
344.4
|
|
|
Net charge-offs
|
|
|
35.6
|
|
|
|
15.0
|
|
|
|
9.5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Totals
|
|
$
|
36.7
|
|
|
$
|
14.4
|
|
|
$
|
19.5
|
|
|
$
|
352.6
|
|
|
$
|
356.1
|
|
|
$
|
386.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses as a percentage of total loans
|
|
|
|
|
|
|
|
|
1.90
|
%
|
|
|
1.91
|
%
|
|
|
1.74
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) Charge-offs for the quarter ended March 31, 2014, included
approximately $3 million related to the transfer of receivables to
assets held for sale. The prior-year quarter and prior quarter
balances were not significant.
|
|
2) Charge-offs for the quarters ended March 31, 2014, December 31,
2013 and March 31, 2013 included approximately $4 million, $1
million and $1 million, respectively, related to the transfer of
receivables to assets held for sale.
|
|
3) Charge-offs for the quarters ended March 31, 2014 and December
31, 2013 included approximately $7 million and $4 million,
respectively, related to the transfer of receivables to assets
held for sale. The prior-year quarter balance was not significant.
|
|
4) Non-accrual loans include loans held for sale.
|
|
|
|
|
|
|
|
|
|
|
|
CIT GROUP INC. AND SUBSIDIARIES
|
|
Segment Results
|
|
(dollars in millions)
|
|
|
|
Quarters Ended
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2013
|
|
|
Transportation & International Finance
|
|
|
|
|
|
|
|
Total interest income
|
|
$
|
76.7
|
|
|
$
|
69.6
|
|
|
$
|
56.6
|
|
|
Total interest expense
|
|
|
(160.7
|
)
|
|
|
(151.1
|
)
|
|
|
(144.1
|
)
|
|
Provision for credit losses
|
|
|
(12.4
|
)
|
|
|
(14.6
|
)
|
|
|
5.6
|
|
|
Rental income on operating leases
|
|
|
459.6
|
|
|
|
425.7
|
|
|
|
417.4
|
|
|
Other income
|
|
|
7.2
|
|
|
|
7.1
|
|
|
|
16.8
|
|
|
Depreciation on operating lease equipment
|
|
|
(121.7
|
)
|
|
|
(113.0
|
)
|
|
|
(108.0
|
)
|
|
Maintenance and other operating lease expenses
|
|
|
(51.6
|
)
|
|
|
(39.0
|
)
|
|
|
(42.4
|
)
|
|
Operating expenses
|
|
|
(79.5
|
)
|
|
|
(67.9
|
)
|
|
|
(63.4
|
)
|
|
Income before provision for income taxes
|
|
$
|
117.6
|
|
|
$
|
116.8
|
|
|
$
|
138.5
|
|
|
Funded new business volume
|
|
$
|
1,054.6
|
|
|
$
|
1,265.7
|
|
|
$
|
423.0
|
|
|
Average Earning Assets
|
|
$
|
17,119.7
|
|
|
$
|
15,928.8
|
|
|
$
|
15,084.0
|
|
|
Average Finance Receivables
|
|
$
|
3,555.0
|
|
|
$
|
3,354.3
|
|
|
$
|
2,762.0
|
|
|
North American Commercial Finance
|
|
|
|
|
|
|
|
Total interest income
|
|
$
|
193.4
|
|
|
$
|
199.7
|
|
|
$
|
219.3
|
|
|
Total interest expense
|
|
|
(68.9
|
)
|
|
|
(67.2
|
)
|
|
|
(78.6
|
)
|
|
Provision for credit losses
|
|
|
(23.2
|
)
|
|
|
2.5
|
|
|
|
(24.9
|
)
|
|
Rental income on operating leases
|
|
|
22.8
|
|
|
|
27.2
|
|
|
|
23.8
|
|
|
Other income
|
|
|
61.8
|
|
|
|
106.5
|
|
|
|
63.7
|
|
|
Depreciation on operating lease equipment
|
|
|
(21.9
|
)
|
|
|
(20.4
|
)
|
|
|
(16.3
|
)
|
|
Operating expenses
|
|
|
(121.5
|
)
|
|
|
(113.3
|
)
|
|
|
(128.1
|
)
|
|
Income before provision for income taxes
|
|
$
|
42.5
|
|
|
$
|
135.0
|
|
|
$
|
58.9
|
|
|
Funded new business volume
|
|
$
|
1,372.9
|
|
|
$
|
1,778.7
|
|
|
$
|
1,333.0
|
|
|
Average Earning Assets
|
|
$
|
13,764.7
|
|
|
$
|
13,456.5
|
|
|
$
|
12,292.7
|
|
|
Average Finance Receivables
|
|
$
|
14,800.1
|
|
|
$
|
14,593.3
|
|
|
$
|
13,427.2
|
|
|
Non-Strategic Portfolios
|
|
|
|
|
|
|
|
Total interest income
|
|
$
|
49.5
|
|
|
$
|
65.0
|
|
|
$
|
78.1
|
|
|
Total interest expense
|
|
|
(43.9
|
)
|
|
|
(49.9
|
)
|
|
|
(54.6
|
)
|
|
Provision for credit losses
|
|
|
(1.0
|
)
|
|
|
(2.2
|
)
|
|
|
(0.3
|
)
|
|
Rental income on operating leases
|
|
|
9.5
|
|
|
|
10.9
|
|
|
|
35.2
|
|
|
Other income
|
|
|
7.5
|
|
|
|
12.7
|
|
|
|
(9.7
|
)
|
|
Depreciation on operating lease equipment
|
|
|
(5.2
|
)
|
|
|
(6.1
|
)
|
|
|
(9.0
|
)
|
|
Operating expenses
|
|
|
(22.2
|
)
|
|
|
(39.5
|
)
|
|
|
(45.1
|
)
|
|
Loss before provision for income taxes
|
|
$
|
(5.8
|
)
|
|
$
|
(9.1
|
)
|
|
$
|
(5.4
|
)
|
|
Funded new business volume
|
|
$
|
51.8
|
|
|
$
|
98.1
|
|
|
$
|
185.4
|
|
|
Average Earning Assets
|
|
$
|
4,515.4
|
|
|
$
|
4,783.2
|
|
|
$
|
5,646.1
|
|
|
Average Finance Receivables
|
|
$
|
300.0
|
|
|
$
|
4,030.4
|
|
|
$
|
5,133.1
|
|
|
Corporate and Other
|
|
|
|
|
|
|
|
Total interest income
|
|
$
|
3.7
|
|
|
$
|
4.4
|
|
|
$
|
2.7
|
|
|
Total interest expense
|
|
|
(17.4
|
)
|
|
|
(18.5
|
)
|
|
|
(14.6
|
)
|
|
Provision for credit losses
|
|
|
(0.1
|
)
|
|
|
(0.1
|
)
|
|
|
0.1
|
|
|
Other income
|
|
|
(2.3
|
)
|
|
|
1.6
|
|
|
|
(0.7
|
)
|
|
Operating expenses
|
|
|
(12.5
|
)
|
|
|
(66.8
|
)
|
|
|
1.3
|
|
|
Loss before provision for income taxes
|
|
$
|
(28.6
|
)
|
|
$
|
(79.4
|
)
|
|
$
|
(11.2
|
)
|
|
Total CIT
|
|
|
|
|
|
|
|
Total interest income
|
|
$
|
323.3
|
|
|
$
|
338.7
|
|
|
$
|
356.7
|
|
|
Total interest expense
|
|
|
(290.9
|
)
|
|
|
(286.7
|
)
|
|
|
(291.9
|
)
|
|
Provision for credit losses
|
|
|
(36.7
|
)
|
|
|
(14.4
|
)
|
|
|
(19.5
|
)
|
|
Rental income on operating leases
|
|
|
491.9
|
|
|
|
463.8
|
|
|
|
476.4
|
|
|
Other income
|
|
|
74.2
|
|
|
|
127.9
|
|
|
|
70.1
|
|
|
Depreciation on operating lease equipment
|
|
|
(148.8
|
)
|
|
|
(139.5
|
)
|
|
|
(133.3
|
)
|
|
Maintenance and other operating lease expenses
|
|
|
(51.6
|
)
|
|
|
(39.0
|
)
|
|
|
(42.4
|
)
|
|
Operating expenses
|
|
|
(235.7
|
)
|
|
|
(287.5
|
)
|
|
|
(235.3
|
)
|
|
Income before provision for income taxes
|
|
$
|
125.7
|
|
|
$
|
163.3
|
|
|
$
|
180.8
|
|
|
Funded new business volume
|
|
$
|
2,479.3
|
|
|
$
|
3,142.5
|
|
|
$
|
1,941.4
|
|
|
Average Earning Assets
|
|
$
|
35,399.8
|
|
|
$
|
34,168.5
|
|
|
$
|
33,022.8
|
|
|
Average Finance Receivables
|
|
$
|
18,655.1
|
|
|
$
|
21,978.0
|
|
|
$
|
21,322.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See page 18 for a description of the new segments.
|
|
|
|
|
|
|
|
|
|
CIT GROUP INC. AND SUBSIDIARIES
|
|
Segment Margin
|
|
(dollars in millions)
|
|
|
|
Quarters Ended
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2013
|
|
|
Transportation & International Finance
|
|
|
|
|
|
|
|
Average Earning Assets (AEA)
|
|
|
|
|
|
|
|
Aerospace
|
|
$
|
9,773.9
|
|
|
$
|
9,346.0
|
|
|
$
|
9,400.0
|
|
|
Rail
|
|
$
|
5,137.9
|
|
|
$
|
4,515.5
|
|
|
$
|
4,212.2
|
|
|
Maritime Finance
|
|
$
|
473.9
|
|
|
$
|
376.4
|
|
|
$
|
208.3
|
|
|
International Finance
|
|
$
|
1,734.0
|
|
|
$
|
1,690.9
|
|
|
$
|
1,263.5
|
|
|
Gross yield
|
|
|
|
|
|
|
|
Aerospace
|
|
|
12.56
|
%
|
|
|
12.14
|
%
|
|
|
12.18
|
%
|
|
Rail
|
|
|
14.56
|
%
|
|
|
14.67
|
%
|
|
|
14.58
|
%
|
|
Maritime Finance
|
|
|
4.88
|
%
|
|
|
9.53
|
%
|
|
|
7.44
|
%
|
|
International Finance
|
|
|
8.46
|
%
|
|
|
8.81
|
%
|
|
|
9.58
|
%
|
|
Total
|
|
|
|
|
|
|
|
AEA
|
|
$
|
17,119.7
|
|
|
$
|
15,928.8
|
|
|
$
|
15,084.0
|
|
|
Gross yield
|
|
|
12.53
|
%
|
|
|
12.44
|
%
|
|
|
12.57
|
%
|
|
Net Finance Margin
|
|
|
4.73
|
%
|
|
|
4.83
|
%
|
|
|
4.76
|
%
|
|
Adjusted Net Finance Margin
|
|
|
4.73
|
%
|
|
|
4.83
|
%
|
|
|
5.02
|
%
|
|
|
|
|
|
|
|
|
|
North American Commercial Finance
|
|
|
|
|
|
|
|
Average Earning Assets (AEA)
|
|
|
|
|
|
|
|
Real Estate Finance
|
|
$
|
1,592.9
|
|
|
$
|
1,391.9
|
|
|
$
|
773.1
|
|
|
Corporate Finance
|
|
$
|
6,991.6
|
|
|
$
|
6,916.2
|
|
|
$
|
6,538.5
|
|
|
Equipment Finance
|
|
$
|
4,239.5
|
|
|
$
|
4,212.4
|
|
|
$
|
3,915.3
|
|
|
Commercial Services
|
|
$
|
940.7
|
|
|
$
|
936.0
|
|
|
$
|
1,065.8
|
|
|
Gross yield
|
|
|
|
|
|
|
|
Real Estate Finance
|
|
|
3.99
|
%
|
|
|
4.02
|
%
|
|
|
4.31
|
%
|
|
Corporate Finance
|
|
|
5.02
|
%
|
|
|
5.34
|
%
|
|
|
6.58
|
%
|
|
Equipment Finance
|
|
|
9.54
|
%
|
|
|
10.25
|
%
|
|
|
11.51
|
%
|
|
Commercial Services
|
|
|
4.86
|
%
|
|
|
5.39
|
%
|
|
|
5.47
|
%
|
|
Total
|
|
|
|
|
|
|
|
AEA
|
|
$
|
13,764.7
|
|
|
$
|
13,456.5
|
|
|
$
|
12,292.7
|
|
|
Gross yield
|
|
|
6.28
|
%
|
|
|
6.74
|
%
|
|
|
7.91
|
%
|
|
Net Finance Margin
|
|
|
3.64
|
%
|
|
|
4.14
|
%
|
|
|
4.82
|
%
|
|
Adjusted Net Finance Margin
|
|
|
3.64
|
%
|
|
|
4.14
|
%
|
|
|
5.02
|
%
|
|
|
|
Gross Yield includes rental income and interest income as a % of AEA.
|
|
|
|
Net Finance Margin (NFM) reflects Net Finance Revenue divided by
AEA. Adjusted Net Finance Margin is NFM increased by accelerated
fresh start accounting net discount/(premium) on debt
extinguishments and repurchases and debt related prepayment costs
and reduced by accelerated original issue discount accretion.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
Total Net Revenues(1)
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
Interest income
|
$
|
323.3
|
|
|
$
|
338.7
|
|
|
$
|
356.7
|
|
|
|
|
|
|
|
|
Rental income on operating leases
|
|
491.9
|
|
|
|
463.8
|
|
|
|
476.4
|
|
|
|
|
|
|
|
|
Finance revenue
|
|
815.2
|
|
|
|
802.5
|
|
|
|
833.1
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(290.9
|
)
|
|
|
(286.7
|
)
|
|
|
(291.9
|
)
|
|
|
|
|
|
|
|
Depreciation on operating lease equipment
|
|
(148.8
|
)
|
|
|
(139.5
|
)
|
|
|
(133.3
|
)
|
|
|
|
|
|
|
|
Maintenance and other operating lease expenses
|
|
(51.6
|
)
|
|
|
(39.0
|
)
|
|
|
(42.4
|
)
|
|
|
|
|
|
|
|
Net finance revenue
|
|
323.9
|
|
|
|
337.3
|
|
|
|
365.5
|
|
|
|
|
|
|
|
|
Other income
|
|
74.2
|
|
|
|
127.9
|
|
|
|
70.1
|
|
|
|
|
|
|
|
|
Total net revenues
|
$
|
398.1
|
|
|
$
|
465.2
|
|
|
$
|
435.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Lease Revenues(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income on operating leases
|
$
|
491.9
|
|
|
$
|
463.8
|
|
|
$
|
476.4
|
|
|
|
|
|
|
|
|
Depreciation on operating lease equipment
|
|
(148.8
|
)
|
|
|
(139.5
|
)
|
|
|
(133.3
|
)
|
|
|
|
|
|
|
|
Maintenance and other operating lease expenses
|
|
(51.6
|
)
|
|
|
(39.0
|
)
|
|
|
(42.4
|
)
|
|
|
|
|
|
|
|
Net operating lease revenue
|
$
|
291.5
|
|
|
$
|
285.3
|
|
|
$
|
300.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
Net Finance Revenue as a % of Average Earning Assets(3)
|
March 31, 2014
|
|
December 31, 2013
|
|
March 31, 2013
|
|
Net finance revenue
|
$
|
323.9
|
|
|
|
3.66
|
%
|
|
$
|
337.3
|
|
|
3.95
|
%
|
|
$
|
365.5
|
|
4.43
|
%
|
|
Accelerated FSA net discount/(premium) on debt extinguishments and
repurchases
|
|
-
|
|
|
|
-
|
|
|
|
9.8
|
|
|
0.11
|
%
|
|
|
17.8
|
|
0.21
|
%
|
|
Accelerated original issue discount on debt extinguishments related
to the GSI facility
|
|
-
|
|
|
|
-
|
|
|
|
(5.2
|
)
|
|
-0.06
|
%
|
|
|
-
|
|
-
|
|
|
Adjusted net finance revenue
|
$
|
323.9
|
|
|
|
3.66
|
%
|
|
$
|
341.9
|
|
|
4.00
|
%
|
|
$
|
383.3
|
|
4.64
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
|
|
|
|
|
Operating Expenses
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
Operating expenses
|
$
|
(235.7
|
)
|
|
$
|
(287.5
|
)
|
|
$
|
(235.3
|
)
|
|
|
|
|
|
|
|
Provision for severance and facilities exiting activities
|
|
9.9
|
|
|
|
18.5
|
|
|
|
5.7
|
|
|
|
|
|
|
|
|
Operating expenses excluding restructuring costs
|
$
|
(225.8
|
)
|
|
$
|
(269.0
|
)
|
|
$
|
(229.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
|
|
|
|
Earning Assets(3)
|
|
2014
|
|
|
|
2013
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
Loans
|
$
|
18,571.7
|
|
|
$
|
18,629.2
|
|
|
$
|
22,120.4
|
|
|
|
|
|
|
|
|
Operating lease equipment, net
|
|
14,182.4
|
|
|
|
13,035.4
|
|
|
|
12,290.6
|
|
|
|
|
|
|
|
|
Assets held for sale
|
|
4,403.0
|
|
|
|
4,377.9
|
|
|
|
646.8
|
|
|
|
|
|
|
|
|
Credit balances of factoring clients
|
|
(1,213.5
|
)
|
|
|
(1,336.1
|
)
|
|
|
(1,237.7
|
)
|
|
|
|
|
|
|
|
Total earning assets
|
$
|
35,943.6
|
|
|
$
|
34,706.4
|
|
|
$
|
33,820.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book Value
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common stockholders' equity
|
$
|
8,787.9
|
|
|
$
|
8,838.8
|
|
|
$
|
8,494.4
|
|
|
|
|
|
|
|
|
Less: Goodwill
|
|
(403.5
|
)
|
|
|
(334.6
|
)
|
|
|
(345.9
|
)
|
|
|
|
|
|
|
|
Intangible assets
|
|
(18.2
|
)
|
|
|
(20.3
|
)
|
|
|
(27.7
|
)
|
|
|
|
|
|
|
|
Tangible book value
|
$
|
8,366.2
|
|
|
$
|
8,483.9
|
|
|
$
|
8,120.8
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
CIT GROUP INC. AND SUBSIDIARIES
|
|
New Segments
|
|
|
|
Effective January 1, 2014 CIT began managing its businesses and
reporting its financial results in three operating segments:
|
|
|
|
- Transportation & International Finance
|
|
- North American Commercial Finance
|
|
- Non-Strategic Portfolios
|
|
|
|
These new segments will consist of the following divisions:
|
|
|
|
Transportation & International Finance
|
|
- Aerospace - Includes Commercial Air (operating leases and loans)
and Business Aircraft Finance
|
|
- Rail
|
|
- Maritime Finance - Financing to owners and operators of
oceangoing cargo vessels.
|
|
- International Finance - Includes the corporate lending business
in the U.K. ( formerly part of the Corporate Finance Segment) and
the equipment financing businesses in the U.K. and China (formerly
part of the Vendor Finance Segment)
|
|
|
|
North American Commercial Finance
|
|
- Real Estate Finance (formerly in Corporate Finance)
|
|
- Corporate Finance - Includes lending to the Aerospace and Defense
sector (formerly Transportation Lending in Transportation Finance)
|
|
- Equipment Finance – Consists of Equipment Finance (formerly in
Corporate Finance) and the U.S. and Canadian businesses formerly in
Vendor Finance
|
|
- Commercial Services (formerly Trade Finance)
|
|
|
|
Non-Strategic Portfolios
|
|
- Student Lending (formerly in Consumer Finance)
|
|
- Small Business Lending (formerly in Corporate Finance)
|
|
- Non-Strategic portfolios from the former Vendor Finance business
including:
|
|
Asia (excluding China)
|
|
Europe (excluding the U.K.)
|
|
Latin America (including Mexico)
|
|
The Dell Canada portfolio (sold in May 2011)
|
Copyright Business Wire 2014