- Previously Announced OneWest Bank
Acquisition Expected to Close on August 3, 2015 – Received
regulatory approvals; creates financial holding company with more
than $65 billion in assets;
- Grew Commercial Assets – Finance
and leasing assets in Transportation & International Finance
and North American Commercial Finance grew 4% from a year ago and
1% from prior quarter;
- Stable Net Finance Margin – Net
Finance Margin of approximately 4%; deposits exceed 50% of total
funding;
- Continued Capital Return –
Returned over $87 million of capital to shareholders through
dividends and the repurchase of 1.3 million shares.
CIT Group Inc. (NYSE:CIT) today reported net income of $115
million, $0.66 per diluted share, for the quarter ended June 30,
2015, compared to net income of $247 million, $1.29 per diluted
share, for the second quarter of 2014. Net income for the six month
period ended June 30, 2015 was $219 million, $1.24 per diluted
share, compared to $364 million, $1.88 per diluted share, for the
period ended June 30, 2014. The three and six month periods ended
June 30, 2014 included $52 million, $0.27 per diluted share, and
$54 million, $0.28 per diluted share, of income from a discontinued
operation, respectively.
“I am very pleased that we received regulatory approval for our
acquisition of OneWest, which is on track to close next week,” said
John A. Thain, Chairman and Chief Executive Officer. “This
transaction will expand our commercial banking franchise, enhance
our suite of products, and further diversify our deposit base and
lower our funding costs through an established network of retail
branches in Southern California.
“Our quarterly results reflect growth across our transportation
businesses and the continuing competitive environment, particularly
for middle market lending. We remain focused on increasing
shareholder value as we meet the financial needs of our
customers.”
Summary of Second 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 operation, which were sold in the
second quarter of 2014.
Income from continuing operations of $115 million, net of a $38
million tax provision, reflects a stable Net Finance Margin (NFM)
and lower provision for credit losses. Net income includes $4
million of charges related to portfolios that we are exiting.
Total assets from continuing operations1 at June 30, 2015 were
$46.7 billion, compared to $46.4 billion at March 31, 2015, and
$44.2 billion at June 30, 2014. Financing and leasing assets in
North American Commercial Finance (NACF) and Transportation &
International Finance (TIF) were $35.6 billion, up slightly from
March 31, 2015 and up $1.5 billion (4%) from a year ago reflecting
the acquisition of Direct Capital in August 2014, which was
partially offset by $0.7 billion of asset sales. Non-Strategic
Portfolios further declined to approximately $295 million,
reflecting portfolio run-off and asset sales. Total loans of $19.6
billion increased $0.2 billion from March 31, 2015 and by over $1
billion from a year ago. Operating lease equipment of $15.1 billion
rose by $0.2 billion from March 31, 2015 and $0.3 billion from a
year ago. Cash and securities totaled $7.9 billion, down $0.2
billion from March 31, 2015 and up $0.6 billion from June 30,
2014.
Net finance revenue2 was $343 million, compared to $361 million
in the year-ago quarter and $337 million in the prior quarter.
Average earning assets were $34.1 billion in the current quarter,
up from $33.2 billion in the year-ago quarter and from $33.8
billion in the prior quarter. Net finance revenue as a percentage
of average earning assets (“net finance margin”) was 4.02%,
compared to 4.35% in the year-ago quarter and 4.00% in the prior
quarter. The decline from the year-ago quarter reflected pressure
on yields, the lack of interest recoveries and the absence of
benefits from accelerated debt redemptions.
Other income of $64 million decreased from $94 million in the
year-ago quarter and from $86 million in the prior quarter. The
current quarter includes 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 derivative. The year-ago quarter
benefited from an $11 million positive mark on the TRS derivative
and $9 million of counterparty receivable accretion.
Operating expenses were $235 million, compared to $225 million
in the year-ago quarter and $242 million in the prior quarter.
Restructuring costs were minimal in the current and prior quarter.
The increase from the year-ago quarter reflects higher compensation
costs, primarily related to the addition of Direct Capital, as well
as costs related to the pending acquisition of OneWest. The
sequential quarter decline reflects lower compensation costs.
Headcount at June 30, 2015 was essentially unchanged from the prior
quarter of 3,360 and up from 3,170 a year ago, driven by Direct
Capital.
The provision for income taxes was $38 million compared to cash
taxes of $4 million. The effective tax rate was approximately 25%
in the current quarter, including a $9 million benefit from a
favorable resolution of an uncertain tax position, compared to 8%
in the year-ago quarter and 30% in the prior quarter. Income tax
expense in the year-ago quarter was $18 million and $44 million in
the prior quarter.
Credit and Allowance for Loan
Losses
Credit metrics remain at or near cycle lows. Non-accrual loans
increased to $198 million, or 1.01% of finance receivables, at June
30, 2015 from $184 million (0.94%) at March 31, 2015 and $190
million (1.02%) at June 30, 2014. The increase was primarily in
International Finance.
The provision for credit losses was $18 million, compared to $10
million in the year-ago quarter and $35 million in the prior
quarter. The decline from the prior quarter is primarily due to a
decrease in the non-specific reserve. Net charge-offs were $23
million, or 0.48% as a percentage of average finance receivables,
versus $21 million (0.45%) in the year-ago quarter and $21 million
(0.43%) in the prior quarter. Charge-offs in the quarter were
impacted by one energy-related account in NACF whereas the prior
quarter mostly reflected transfers of assets to held for sale.
Recoveries of $11 million were higher than the $8 million recorded
in the year-ago quarter and $6 million in the prior quarter.
The allowance for loan losses was $351 million (1.79% of finance
receivables) at June 30, 2015, compared to $357 million (1.83%) at
March 31, 2015 and $341 million (1.83%) at June 30, 2014. Specific
reserves were $18 million at June 30, 2015, compared to $15 million
at March 31, 2015 and $22 million at June 30, 2014.
Capital and Funding
Our estimated Common Equity Tier 1 and Total Capital ratios at
June 30, 2015 were 14.4% and 15.1%3, as calculated under the fully
phased-in Regulatory Capital Rules, compared to 14.1% and 14.8% at
March 31, 2015, respectively. At June 30, 2014, Tier 1 and Total
Capital ratios reported under the previously effective capital
rules were 16.0% and 16.7%, respectively. The change from the
year-ago quarter primarily reflects an increase in risk-weighted
assets due to higher transportation order book commitments and
asset growth and, to a lesser extent, a decline in regulatory
capital resulting from goodwill and intangibles recorded with the
Direct Capital acquisition. The impact of the change in Regulatory
Capital Rules at January 1, 2015 was minimal. Preliminary fully
phased-in risk-weighted assets totaled $55.7 billion at June 30,
2015, compared to $56.3 billion in the prior quarter and from $51.0
billion at June 30, 2014.
Book value per share grew to $50.91 at June 30, 2015 from $50.26
at March 31, 2015 and $46.42 at June 30, 2014. Tangible book value
per share4 increased to $47.51 at June 30, 2015 from $46.89 at
March 31, 2015 and $44.16 at June 30, 2014. The increases in book
value and tangible book value per share primarily reflected our net
income, including the partial reversals of the valuation allowance
in the second half of 2014, and continued net benefit from share
repurchases.
Cash and investment securities totaled $7.5 billion at June 30,
2015, and were comprised of $5.5 billion of cash, $0.7 billion of
reverse repurchase securities, $0.8 billion of short-term
investments and $0.5 billion of debt securities available for sale,
compared to $7.7 billion at March 31, 2015 and $6.8 billion at June
30, 2014. Cash and investment securities at June 30, 2015 consisted
of $2.6 billion related to the bank holding company and $3.4
billion at CIT Bank (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. CIT had
approximately $1.4 billion of unused and committed liquidity under
a $1.5 billion revolving credit facility at June 30, 2015.
Deposits grew to $17.3 billion from $16.8 billion at March 31,
2015, and $13.9 billion at June 30, 2014, as we surpassed $10
billion of online deposits during the quarter. At June 30, 2015,
deposits represented approximately 51% of CIT’s funding, with
unsecured and secured borrowings comprising 32% and 17% of the
funding mix, respectively, reflecting the ongoing shift from
unsecured borrowings to deposit funding. The weighted average
coupon rate on outstanding deposits and long-term borrowings in
continuing operations was 3.04% at June 30, 2015, unchanged from
March 31, 2015 and down from 3.20% at June 30, 2014.
During the quarter, we returned over $87 million in capital to
our shareholders including $26 million in dividends and $61 million
from repurchases of 1.3 million common shares at an average price
of $45.87 per share.
In July 2015, the Board approved a $0.15 cash dividend payable
on August 28, 2015 to common shareholders of record as of August
14, 2015 and we repurchased an additional 0.7 million shares under
a 10b 5-1 repurchase plan for an aggregate purchase price of $30
million. Approximately $109 million of the authorized repurchase
capacity remained at July 24, 2015.
Segment Highlights
Transportation & International Finance
Pre-tax earnings were $157 million, up from $148 million in the
year-ago quarter and unchanged from the prior quarter. The increase
from the year-ago quarter primarily reflected higher gains on asset
sales and a lower provision for credit losses. The second quarter
results reflects lower provision for credit losses and operating
expenses offset by reduced gains on asset sales, as compared to the
prior quarter.
Financing and leasing assets at June 30, 2015 were $19.3
billion, up from $18.8 billion at March 31, 2015 and $18.4 billion
at June 30, 2014. The annual increase reflects growth in all
transportation divisions, partially offset by a reduction in
International Finance. Assets held for sale totaled $0.7 billion
and largely consists of the U.K. equipment finance portfolio and
certain commercial aircraft. New business volume for the quarter
was $0.8 billion and consisted of $0.4 billion of operating lease
equipment, including the delivery of three new aircraft and
approximately 1,900 new railcars, and the funding of $0.4 billion
of finance receivables, the majority of which was in Maritime
Finance.
Net finance revenue was $218 million, compared to $222 million
in the year-ago quarter and $215 million in the prior quarter,
reflecting asset growth offset by yield compression. Net finance
margin was 4.57%, down from 4.91% in the year-ago quarter, as lower
yields in Aerospace reflecting lower utilization and lease
re-pricings, were partially offset by slightly higher yields in
Rail. NFM was unchanged from the prior quarter as lower funding
costs offset yield compression. Gross yields in Aerospace decreased
to 11.2% from 11.4% in the prior quarter, while gross yields in
Rail of 14.8% were unchanged sequentially.
Other income was $17 million, up from $10 million in the
year-ago quarter and down from $34 million in the prior quarter,
driven by variation in gains on asset sales, predominantly in
commercial aircraft.
Non-accrual loans of $58 million (1.55% of finance receivables)
increased from $39 million (1.10%) at March 31, 2015 and from
$41 million (1.26%) a year ago, primarily in International
Finance. There was a slight net benefit in provision for credit
losses compared to provisions of $8 million in the year-ago quarter
and $11 million in the prior quarter, with the current quarter
provision reflecting recoveries in China and minimal losses
elsewhere. Net charge-offs reflected a $3 million net recovery this
quarter (0.29% of finance receivables) compared to net charge-offs
of $13 million (1.48%) in the year-ago quarter and $2 million
(0.17%) in the prior quarter. Net charge-offs in the year-ago
quarter include $9 million related to assets transferred to held
for sale.
Operating expenses were $78 million, up from $76 million a year
ago and down from $82 million in the prior quarter reflecting lower
employee costs.
Utilization was essentially unchanged from the prior quarter in
air and rail, with over 97% of aircraft and 98% of rail equipment
leased or under a commitment at quarter-end. During the quarter, we
ordered approximately 1,400 freight rail cars delivering through
2017. All of our aircraft scheduled for delivery in the next 12
months and approximately 60% of the total railcar order-book have
lease commitments.
North American Commercial Finance
Pre-tax earnings were $47 million, compared to $93 million in
the year-ago quarter and $36 million in the prior quarter. The
decrease from the year-ago quarter reflects higher credit costs and
operating expenses, lower interest recoveries, and the impact of
portfolio re-pricing. The increase from the prior quarter reflects
lower credit costs, higher capital market fees, and higher net
finance revenue.
Financing and leasing assets were $16.3 billion, up slightly
from March 31, 2015, and up $650 million (4%) from June 30, 2014.
The increase from the year-ago quarter primarily reflects the
acquisition of Direct Capital and growth in Real Estate Finance.
New lending and leasing volume was $1.6 billion, slightly higher
than the year-ago quarter and up from $1.4 billion in the prior
quarter. Factored volume declined 7% and 10% from year-ago and
prior quarter levels, respectively.
Net finance revenue of $133 million decreased from $146 million
in the year-ago quarter reflecting lower levels of loan prepayments
and interest recoveries. Net finance revenue increased from $128
million in the prior quarter due to both slightly higher average
earning assets and yields, notably in Equipment Finance. Net
finance margin was 3.60% compared to 4.13% in the year-ago quarter
and 3.52% in the prior quarter. The changes in net finance margin
from the comparable periods reflect the items affecting the net
finance revenues cited above. Other income of $69 million was
essentially unchanged from the year-ago quarter and up from $66
million in the prior quarter, reflecting higher capital markets
fees and higher gains partially offset by lower factoring
commissions. Operating expenses were $135 million, up from $120
million in the year-ago quarter, primarily reflecting the
acquisition of Direct Capital, and were unchanged from the prior
quarter.
Non-accrual loans of $111 million (0.70% of finance receivables)
declined from $116 million (0.73%) at March 31, 2015, and from
$132 million (0.86%) a year ago. Provision for credit losses
of $19 million was up from $3 million in the year-ago quarter and
down from $24 million in the prior quarter. The current quarter
includes a charge-off on one energy-related account partially
offset by a decrease in non-specific reserves. Net charge-offs were
$26 million (0.66% of average finance receivables), compared to $9
million (0.23%) in the year-ago quarter and $19 million (0.49%) in
the prior quarter. Net charge-offs include $1 million related to
assets moved to held for sale in the current quarter compared to $3
million in the year-ago quarter and $11 million in the prior
quarter.
Non-Strategic Portfolios
Pre-tax losses were $10 million, unchanged from the year-ago
quarter and improved from $13 million in the prior quarter. The
sequential trend reflected higher gains on sale of equipment
partially offset by higher impairment charges on held-for-sale
portfolios.
Financing and leasing assets were unchanged at $0.3 billion at
June 30, 2015, compared to March 31, 2015, and were down from $0.7
billion a year-ago, which reflects sales of international
portfolios and portfolio run-off.
In the fourth quarter of 2014, we signed separate definitive
agreements to sell equipment leasing platforms in Mexico
(approximately $0.2 billion in assets at June 30, 2015), and Brazil
(approximately $0.1 billion in assets at June 30, 2015). We
received regulatory approval for the sale of Mexico, and expect to
close the transaction in the 2015 third quarter. Brazil is expected
to close in the second half of 2015, subject to regulatory
approval.
Corporate and Other
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. Other income included a $6 million
negative mark-to-market on the TRS derivative and the previously
mentioned $9 million tax-related charge.
CIT Bank
Total assets were $21.9 billion at June 30, 2015, up from $21.5
billion at March 31, 2015, reflecting new business volumes, and
$18.3 billion at June 30, 2014 reflecting, in part, the acquisition
of Direct Capital. CIT Bank funded $2 billion of new business
volume in the current quarter. Loans totaled $15.7 billion, up from
$15.1 billion at March 31, 2015 and $13.4 billion at June 30, 2014.
Operating lease equipment was $2.2 billion, primarily railcars and
some aircraft, up from $2.0 billion in the prior quarter and $1.8
billion at June 30, 2014. Cash and debt securities available for
sale totaled $3.5 billion at June 30, 2015 was comprised of $3.0
billion of cash and approximately $0.5 billion of debt securities,
down from $3.8 billion at March 31, 2015, and up from $2.8 billion
at June 30, 2014.
Preliminary estimated Common Equity Tier 1 and Total Capital
ratios were 12.5% and 13.8% at June 30, 2015, and 12.9% and 14.1%
at March 31, 2015, respectively, as calculated under the fully
phased-in Regulatory Capital Rules. Tier 1 and Total Capital
ratios, which were reported under the previously effective capital
rules, were 15.2% and 16.5% at June 30, 2014. The change from a
year-ago quarter primarily reflects an increase in risk weighted
assets. The impact of the changes in regulatory capital rules at
January 1, 2015 was minimal.
Deposits at June 30, 2015 were $17.3 billion, up from $16.8
billion at March 31, 2015 and $13.9 billion at June 30, 2014, and
we surpassed $10 billion of online deposits. The weighted average
rate on outstanding deposits was 1.69%, compared to 1.66% at March
31, 2015 and 1.57% at June 30, 2014.
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, July 28, 2015, 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
“9999477” 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
August 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 “10068104”, 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 principally to
middle market companies across more than 30 industries primarily in
North America, and equipment financing and leasing solutions to the
transportation industry worldwide. Its U.S. commercial 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, 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 is a non-GAAP
measurement used by management to compare period over period
expenses. 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 Total assets from continuing operations is a non-GAAP measure.
See “Non-GAAP Measurements” at the end of this press release and
page 18 for reconciliation of non-GAAP to GAAP financial
information. 2 Net finance revenue, average earning assets, 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 18 for reconciliation of non-GAAP to GAAP
financial information. 3 Preliminary ratios are based on a
preliminary fully phased-in Basel III estimate. 4 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
18 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 Six Months Ended June
30, March 31, June 30, June 30,
2015 2015 2014
2015 2014
Interest income Interest and fees on loans $ 274.8 $ 272.4 $ 301.4
$ 547.2 $ 594.8 Other Interest and dividends 9.0
8.6 8.4 17.6 17.2
Total interest income 283.8 281.0
309.8 564.8 612.0
Interest expense Interest on long-term borrowings (193.0 ) (202.3 )
(206.1 ) (395.3 ) (426.1 ) Interest on deposits (72.2 )
(69.0 ) (56.1 ) (141.2 ) (108.0 ) Total
interest expense (265.2 ) (271.3 ) (262.2 )
(536.5 ) (534.1 ) Net interest revenue 18.6 9.7 47.6
28.3 77.9 Provision for credit losses (18.4 ) (34.6 )
(10.2 ) (53.0 ) (46.9 ) Net interest revenue,
after credit provision 0.2 (24.9 ) 37.4
(24.7 ) 31.0 Non-interest income Rental
income on operating leases 531.7 530.6 519.6 1,062.3 1,011.5 Other
income 63.5 86.4 93.7
149.9 164.8 Total non-interest income
595.2 617.0 613.3
1,212.2 1,176.3 Other expenses Depreciation on
operating lease equipment (157.8 ) (156.8 ) (157.3 ) (314.6 )
(306.1 ) Maintenance and other operating lease expenses (49.4 )
(46.1 ) (49.0 ) (95.5 ) (100.6 ) Operating expenses (235.0 ) (241.6
) (225.0 ) (476.6 ) (458.5 ) Loss on debt extinguishment
(0.1 ) - (0.4 ) (0.1 ) (0.4 )
Total other expenses (442.3 ) (444.5 ) (431.7
) (886.8 ) (865.6 ) Income from continuing operations
before provision for income taxes 153.1 147.6 219.0 300.7 341.7
Provision for income taxes (37.8 ) (44.0 )
(18.1 ) (81.8 ) (31.6 ) Income from continuing
operations, before attribution of noncontrolling interests 115.3
103.6 200.9 218.9 310.1 Net (income) loss attributable to
noncontrolling interests, after tax - 0.1
(5.7 ) 0.1 - Income from
continuing operations 115.3 103.7 195.2 219.0 310.1 Discontinued
operation Loss from discontinued operation, net of taxes - - (231.1
) - (228.8 ) Gain on sale of discontinued operation -
- 282.8 - 282.8
Income from discontinued operation, net of taxes -
- 51.7 -
54.0 Net income $ 115.3 $ 103.7 $ 246.9
$ 219.0 $ 364.1 Basic income per common share
Income from continuing operations $ 0.66 $ 0.59 $ 1.03 $ 1.25 $
1.61 Income from discontinued operation, net of taxes -
- 0.27 -
0.28 Basic income per common share $ 0.66 $ 0.59
$ 1.30 $ 1.25 $ 1.89 Average number of
common shares - basic (thousands) 173,785 176,260 190,231 175,019
193,134 Diluted income per common share Income from
continuing operations $ 0.66 $ 0.59 $ 1.02 $ 1.24 $ 1.60 Income
from discontinued operation, net of taxes - -
0.27 - 0.28
Diluted income per common share $ 0.66 $ 0.59 $ 1.29
$ 1.24 $ 1.88 Average number of common shares
- diluted (thousands) 174,876 177,072 191,077 175,971 194,036
CIT GROUP INC. AND SUBSIDIARIES Unaudited Consolidated
Balance Sheets (dollars in millions, except per share
data) June 30,
March 31, December 31, June 30, 2015*
2015 2014 2014 Assets Total cash
and deposits $ 5,465.3 $ 6,306.9 $ 7,119.7 $ 6,427.6 Securities
purchased under agreements to resell 750.0 450.0 650.0 - Investment
securities 1,692.9 1,347.4 1,550.3 823.1 Assets held for sale
1,086.8 1,051.9 1,218.1 1,328.9 Loans 19,649.3 19,429.3
19,495.0 18,604.4 Allowance for loan losses (350.9 )
(356.5 ) (346.4 ) (341.0 ) Loans, net of allowance
for loan losses 19,298.4 19,072.8 19,148.6 18,263.4
Operating lease equipment, net 15,109.6 14,887.8 14,930.4 14,788.3
Goodwill 565.9 563.6 571.3 403.1 Unsecured counterparty receivable
538.2 537.1 559.2 565.8 Other assets 2,150.1 2,198.5 2,132.4
1,551.5 Assets of discontinued operation - -
- 1.0 Total assets $ 46,657.2
$ 46,416.0 $ 47,880.0 $ 44,152.7
Liabilities Deposits $ 17,267.8 $ 16,758.1 $ 15,849.8 $
13,939.0 Credit balances of factoring clients 1,373.3 1,505.3
1,622.1 1,296.5 Other liabilities 2,766.9 2,735.2 2,888.8 2,741.5
Long-term borrowings Unsecured borrowings 10,732.8 10,732.6
11,932.4 12,232.4 Secured borrowings 5,708.8
5,925.7 6,523.4 5,313.1 Total
long-term borrowings 16,441.6 16,658.3
18,455.8 17,545.5 Liabilities of
discontinued operation - - -
0.9 Total liabilities 37,849.6
37,656.9 38,816.5 35,523.4
Equity Stockholders' equity Common stock 2.0 2.0 2.0
2.0 Paid-in capital 8,615.6 8,598.0 8,603.6 8,582.0 Retained
earnings 1,781.1 1,692.3 1,615.7 905.8 Accumulated other
comprehensive loss (158.8 ) (163.1 ) (133.9 ) (77.5 ) Treasury
stock, at cost (1,432.8 ) (1,370.6 ) (1,018.5
) (794.7 ) Total common stockholders' equity 8,807.1 8,758.6
9,068.9 8,617.6 Noncontrolling interests 0.5
0.5 (5.4 ) 11.7 Total equity
8,807.6 8,759.1 9,063.5
8,629.3 Total liabilities and equity $ 46,657.2 $
46,416.0 $ 47,880.0 $ 44,152.7
Book
Value Per Common Share Book value per common share $ 50.91 $
50.26 $ 50.13 $ 46.42 Tangible book value per common share $ 47.51
$ 46.89 $ 46.83 $ 44.16 Outstanding common shares (in thousands)
172,998 174,280 180,921 185,645 * Preliminary
CIT GROUP INC. AND SUBSIDIARIES
Average Balances and Rates (dollars in millions)
Quarters Ended June 30, 2015 March 31,
2015 June 30, 2014 Average Balance Rate
Average Balance Rate Average Balance
Rate Assets Interest bearing deposits $ 4,829.4 0.28
% $ 5,951.6 0.27 % $ 4,620.9 0.39 % Securities purchased under
agreements to resell 675.0 0.59 % 575.0 0.49 % - - Investments
1,510.6 1.22 % 1,497.2 1.04 % 2,035.8 0.77 % Loans (including held
for sale) U.S. 18,130.4 5.41 % 17,908.2 5.36 % 16,339.2 6.03 %
Non-U.S. 2,161.3 9.01 % 2,235.3 9.38 %
3,510.0 8.49 % Total Loans 20,291.7
5.83 % 20,143.5 5.84 % 19,849.2 6.50 %
Total interest earning assets / interest income 27,306.7
4.39 % 28,167.3 4.22 % 26,505.9
4.92 % Operating lease equipment, net (including held for sale)
U.S. 7,859.0 8.93 % 7,769.5 9.15 % 7,741.5 8.91 % Non-U.S.
7,422.2 8.04 % 7,420.0 8.08 % 6,921.8
8.14 % Total operating lease equipment, net 15,281.2
8.49 % 15,189.5 8.63 % 14,663.3
8.55 % Total earning assets 42,587.9 5.91 %
43,356.8 5.82 % 41,169.2 6.25 % Non-interest
earning assets Cash and due from banks 952.7 903.6 1,213.1
Allowance for loan losses (358.0 ) (347.7 ) (350.4 ) All other
non-interest bearing assets 3,285.5 3,317.1 2,546.5 Assets of
discontinued operation - - 931.2
Total Average Assets $ 46,468.1 $ 47,229.8
$ 45,509.6
Liabilities Borrowings Deposits $
16,934.9 1.71 % $ 16,382.2 1.68 % $ 13,608.5 1.65 % Long-term
borrowings 16,540.3 4.67 % 17,603.9
4.60 % 18,226.2 4.52 % Total interest-bearing
liabilities 33,475.2 3.17 % 33,986.1
3.19 % 31,834.7 3.29 % Credit balances of factoring
clients 1,428.6 1,501.4 1,301.7 Other non-interest bearing
liabilities 2,776.7 2,870.6 2,863.2 Liabilities of discontinued
operation - - 793.9 Noncontrolling interests 0.5 (3.9 ) 8.4
Stockholders' equity 8,787.1 8,875.6
8,707.7
Total Average Liabilities and
Stockholders' Equity $ 46,468.1 $ 47,229.8 $
45,509.6
Six Months Ended June 30, 2015
June 30, 2014 Assets Interest bearing deposits $
5,390.1 0.27 % $ 4,955.8 0.37 % Securities purchased under
agreements to resell 650.0 0.52 % - - Investments 1,526.2 1.11 %
2,269.6 0.71 % Loans (including held for sale) U.S. 18,016.6 5.39 %
16,087.1 5.97 % Non-U.S. 2,203.2 9.18 %
3,622.5 8.47 % Total Loans 20,219.8 5.83 %
19,709.6 6.46 % Total interest earning assets /
interest income 27,786.1 4.29 % 26,935.0
4.77 % Operating lease equipment, net (including held for
sale) U.S. 7,821.1 9.03 % 7,556.7 8.70 % Non-U.S. 7,424.1
8.05 % 6,733.0 8.20 % Total operating lease
equipment, net 15,245.2 8.56 % 14,289.7
8.46 % Total earning assets 43,031.3 5.85 %
41,224.7 6.10 % Non-interest earning assets Cash and due
from banks 930.3 989.6 Allowance for loan losses (352.3 ) (354.3 )
All other non-interest bearing assets 3,301.5 2,460.5 Assets of
discontinued operation - 2,167.6
Total Average Assets $ 46,910.8 $ 46,488.1
Liabilities Borrowings Deposits $ 16,644.3 1.70 % $ 13,213.3
1.63 % Long-term borrowings 17,131.2 4.61 %
18,497.8 4.61 % Total interest-bearing liabilities
33,775.5 3.18 % 31,711.1 3.37 % Credit
balances of factoring clients 1,459.2 1,299.8 Other non-interest
bearing liabilities 2,836.4 2,862.6 Liabilities of discontinued
operation - 1,852.0 Noncontrolling interests (2.0 ) 10.3
Stockholders' equity 8,841.7 8,752.3
Total Average Liabilities and Stockholders' Equity $
46,910.8 $ 46,488.1
CIT GROUP INC. AND SUBSIDIARIES Select
Accounts (dollars in millions) Quarters
Ended Six Months Ended June 30, March 31,
June 30, June 30, 2015 2015 2014
2015 2014 OTHER INCOME Gains on sales of
leasing equipment $ 21.5 $ 32.0 $ 16.0 $ 53.5 $ 24.4 Factoring
commissions 27.0 29.5 28.3 56.5 56.9 Fee revenues 25.3 22.6 21.8
47.9 43.4 Gains on loan and portfolio sales 2.1 6.6 4.5 8.7 8.0
Gain on investments 3.8 0.7 5.6 4.5 9.1 (Losses) gains on
derivatives and foreign currency exchange (5.0 ) (9.7 ) 8.3 (14.7 )
1.2 Impairment on assets held for sale (11.0 ) (10.1 ) (14.3 )
(21.1 ) (15.4 ) Other revenues (0.2 ) 14.8
23.5 14.6 37.2 Total
other income $ 63.5 $ 86.4 $ 93.7 $ 149.9
$ 164.8
OPERATING EXPENSES Compensation
and benefits $ (135.6 ) $ (146.5 ) $ (125.7 ) $ (282.1 ) $ (264.6 )
Technology (24.9 ) (22.3 ) (20.8 ) (47.2 ) (41.9 ) Professional
fees (20.8 ) (19.5 ) (16.9 ) (40.3 ) (34.9 ) Net occupancy expense
(8.6 ) (9.4 ) (8.5 ) (18.0 ) (17.4 ) Advertising and marketing (6.7
) (9.1 ) (8.3 ) (15.8 ) (16.2 ) Provision for severance and
facilities exiting activities (1.1 ) 1.0 (5.6 ) (0.1 ) (15.5 )
Other expenses (37.3 ) (35.8 ) (39.2 )
(73.1 ) (68.0 ) Total operating expenses $ (235.0 ) $ (241.6
) $ (225.0 ) $ (476.6 ) $ (458.5 )
June 30, March
31, December 31, June 30, 2015*
2015 2014 2014 INVESTMENT
SECURITIES Short-term investments $ 800.0 $ 500.0 $ 1,104.2 $
344.3 Other debt and equity investments 892.9
847.4 446.1 478.8 Total
investment securities $ 1,692.9 $ 1,347.4 $ 1,550.3
$ 823.1
OTHER ASSETS Deposits on
commercial aerospace equipment $ 816.9 $ 750.6 $ 736.3 $ 667.2
Deferred federal and state tax assets 376.5 398.8 422.5 38.9
Furniture and fixtures 144.4 123.4 126.4 83.0 Deferred costs,
including debt related costs 126.8 155.5 148.1 153.4 Tax
receivables, other than income taxes 103.0 101.9 102.0 118.7 Fair
value of derivative financial instruments 101.5 199.4 168.0 36.4
Executive retirement plan and deferred compensation 95.9 97.0 96.7
98.8 Other 385.1 371.9 332.4
355.1 Total other assets $ 2,150.1 $
2,198.5 $ 2,132.4 $ 1,551.5
OTHER
LIABILITIES Equipment maintenance reserves $ 982.5 $ 965.2 $
960.4 $ 942.3 Accrued expenses and accounts payable 439.2 385.6
478.3 379.3 Current taxes payable and deferred taxes 345.6 340.9
319.1 320.0 Security and other deposits 265.9 379.7 368.0 228.0
Accrued interest payable 221.2 171.7 243.7 249.7 Valuation
adjustment relating to aerospace commitments 117.1 117.1 121.2
121.9 Other liabilities 395.4 375.0
398.1 500.3 Total other liabilities $
2,766.9 $ 2,735.2 $ 2,888.8 $ 2,741.5 *
Preliminary
CIT GROUP INC.
AND SUBSIDIARIES Financing and Leasing Assets
(dollars in millions) June 30, March
31, December 31, June 30, 2015 2015
2014 2014 Transportation & International
Finance Aerospace Loans $ 1,739.6 $ 1,750.8 $ 1,796.5 $
1,432.2 Operating lease equipment, net 8,816.7 8,822.7 8,949.5
8,912.8 Assets held for sale 243.8 234.5 391.6
191.8 Financing and leasing assets 10,800.1
10,808.0 11,137.6 10,536.8
Rail Loans 124.7
126.7 130.0 121.4 Operating lease equipment, net 6,010.8 5,800.1
5,715.2 5,593.4 Assets held for sale 0.9 1.0
1.2 0.7 Financing and leasing assets 6,136.4
5,927.8 5,846.4 5,715.5
Maritime Finance Loans
1,274.4 1,066.6 1,006.7 566.4 Assets held for sale 56.4
19.1 19.7 21.2 Financing and leasing assets
1,330.8 1,085.7 1,026.4 587.6
International Finance Loans 578.4 624.4 625.7 1,108.3
Operating lease equipment, net 0.4 0.5 0.5 6.7 Assets held for sale
404.4 379.9 402.7 458.0 Financing and
leasing assets 983.2 1,004.8 1,028.9
1,573.0
Total Segment Loans 3,717.1 3,568.5 3,558.9 3,228.3
Operating lease equipment, net 14,827.9 14,623.3 14,665.2 14,512.9
Assets held for sale 705.5 634.5 815.2
671.7 Financing and leasing assets 19,250.5 18,826.3
19,039.3 18,412.9
North American Commercial
Finance Real Estate Finance Loans 1,941.4
1,813.9 1,768.6 1,737.6
Corporate Finance
Loans 6,978.2 6,798.1 6,889.9 7,295.3 Operating lease equipment,
net - - - 10.0 Assets held for sale 88.3 87.5
22.8 33.7 Financing and leasing assets 7,066.5
6,885.6 6,912.7 7,339.0
Equipment Finance
Loans 4,810.8 4,706.1 4,717.3 4,094.7 Operating lease equipment,
net 281.7 264.5 265.2 230.2 Financing
and leasing assets 5,092.5 4,970.6 4,982.5
4,324.9
Commercial Services Loans - factoring
receivables 2,201.8 2,542.7 2,560.2
2,248.5
Total Segment Loans 15,932.2 15,860.8 15,936.0
15,376.1 Operating lease equipment, net 281.7 264.5 265.2 240.2
Assets held for sale 88.3 87.5 22.8
33.7 Financing and leasing assets 16,302.2 16,212.8
16,224.0 15,650.0
Non-Strategic Portfolios
Loans - - 0.1 - Operating lease equipment, net - - - 35.2 Assets
held for sale 293.0 329.9 380.1 623.5
Financing and leasing assets 293.0 329.9 380.2
658.7
Total financing and leasing assets $ 35,845.7 $
35,369.0 $ 35,643.5 $ 34,721.6
CIT GROUP INC. AND SUBSIDIARIES
Credit Metrics (dollars in millions)
Quarters Ended June 30, 2015 March 31, 2015
June 30, 2014 Gross Charge-offs to Average Finance
Receivables Transportation & International Finance(1) $ 2.9
0.32 % $ 3.2 0.36 % $ 15.9 1.79 % North American Commercial
Finance(2) 31.3 0.79 % 23.4 0.59 %
13.2 0.35 %
Total CIT $ 34.2 0.70 % $
26.6 0.55 % $ 29.1 0.62 %
Six Months Ended
June 30, 2015 2014 Transportation &
International Finance(1) $ 6.1 0.34 % $ 30.2 1.70 % North American
Commercial Finance(2) 54.7 0.69 % 35.8 0.48 % Non-Strategic
Portfolios(3) - - 7.5 5.29 %
Total
CIT $ 60.8 0.63 % $ 73.5 0.78 %
Quarters Ended June 30, 2015 March 31, 2015
June 30, 2014 Net Charge-offs to Average Finance
Receivables Transportation & International Finance(1) $
(2.7 ) (0.29 %) $ 1.5 0.17 % $ 13.1 1.48 % North American
Commercial Finance(2) 26.2 0.66 % 19.4 0.49 % 8.8 0.23 %
Non-Strategic Portfolios(3) - - - -
(0.7 )
(3.16
%)
Total CIT $ 23.5 0.48 % $ 20.9 0.43 % $ 21.2
0.45 %
Six Months Ended June 30, 2015
2014 Transportation & International Finance(1) $ (1.2 )
(0.07 %) $ 26.1 1.47 % North American Commercial Finance(2) 45.6
0.58 % 24.8 0.33 % Non-Strategic Portfolios(3) -
5.9 4.22 %
Total CIT $ 44.4 0.46 % $
56.8 0.60 %
Non-accruing Loans to Finance
Receivables(4) June 30, 2015 March 31,
2015 December 31, 2014 June 30, 2014
Transportation & International Finance $ 57.8 1.55 % $ 39.2
1.10 % $ 37.2 1.05 % $ 40.8 1.26 % North American Commercial
Finance 111.0 0.70 % 115.6 0.73 % 100.9 0.63 % 132.3 0.86 %
Non-Strategic Portfolios 29.2
(4)
28.7
(4)
22.4
(4)
17.3
(4)
Total CIT $ 198.0 1.01 % $ 183.5 0.94 % $
160.5 0.82 % $ 190.4 1.02 %
PROVISION AND ALLOWANCE
COMPONENTS Provision for Credit Losses Quarters
Ended Six Months Ended June 30, March 31,
June 30, June 30, 2015 2015 2014
2015 2014 Specific allowance - impaired loans $ 2.7 $
2.4 $ (3.5 ) $ 5.1 $ (8.2 ) Non-specific allowance (7.8 ) 11.3 (7.5
) 3.5 (1.7 ) Net charge-offs 23.5 20.9
21.2 44.4 56.8 Totals $
18.4 $ 34.6 $ 10.2 $ 53.0 $ 46.9
Allowance for Loan Losses June 30, March
31, December 31, June 30, 2015 2015
2014 2014 Specific allowance - impaired loans $ 17.5
$ 14.8 $ 12.4 $ 22.2 Non-specific allowance 333.4
341.7 334.0 318.8 Totals
$ 350.9 $ 356.5 $ 346.4 $ 341.0
Allowance for loan losses as a percentage of total loans 1.79 %
1.83 % 1.78 % 1.83 % 1) TIF charge-offs related to the
transfer of receivables to assets held for sale for the 2015
periods were less than $1 million each. TIF charge-offs for the
quarter and six months ended June 30, 2014 included $9 million and
$12 million, respectively, related to the transfer of receivables
to assets held for sale. 2) NACF charge-offs for the quarters ended
June 30, 2015 and March 31, 2015 included $1 million and $11
million, respectively, related to the transfer of receivables to
assets held for sale. For the quarter and six months ended June 30,
2014, the respective amounts were $3 million and $7 million. 3) NSP
charge-offs for the six months ended June 30, 2014 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 Six Months Ended June
30, March 31, June 30, June 30,
2015 2015 2014 2015 2014
Transportation & International Finance Total interest
income $ 69.9 $ 68.4 $ 72.2 $ 138.3 $ 148.9 Total interest expense
(164.9 ) (168.6 ) (155.1 ) (333.5 ) (315.8 ) Provision for credit
losses 0.4 (10.6 ) (8.3 ) (10.2 ) (20.7 ) Rental income on
operating leases 498.6 497.5 485.1 996.1 944.7 Other income 16.6
34.3 10.4 50.9 17.6 Depreciation on operating lease equipment
(136.7 ) (136.1 ) (131.6 ) (272.8 ) (253.3 ) Maintenance and other
operating lease expenses (49.4 ) (46.1 ) (49.0 ) (95.5 ) (100.6 )
Operating expenses (77.6 ) (81.8 ) (75.5 )
(159.4 ) (155.0 ) Income before provision for income
taxes $ 156.9 $ 157.0 $ 148.2 $ 313.9 $
265.8 Funded new business volume $ 825.8 $ 525.3 $ 1,404.7 $
1,351.1 $ 2,459.3 Average Earning Assets $ 19,045.1 $ 18,821.7 $
18,066.2 $ 18,952.8 $ 17,624.8 Average Finance Receivables $
3,657.3 $ 3,546.0 $ 3,547.0 $ 3,606.4 $ 3,550.8
North American
Commercial Finance Total interest income $ 199.0 $ 196.1 $
208.8 $ 395.1 $ 402.2 Total interest expense (73.3 ) (74.1 ) (68.1
) (147.4 ) (137.0 ) Provision for credit losses (18.8 ) (24.0 )
(2.6 ) (42.8 ) (25.8 ) Rental income on operating leases 27.9 27.2
25.1 55.1 47.9 Other income 69.2 66.3 69.7 135.5 131.5 Depreciation
on operating lease equipment (21.1 ) (20.7 ) (20.0 ) (41.8 ) (41.9
) Operating expenses (135.4 ) (134.7 ) (120.2
) (270.1 ) (241.7 ) Income before provision for
income taxes $ 47.5 $ 36.1 $ 92.7 $ 83.6
$ 135.2 Funded new business volume $ 1,630.5 $
1,354.1 $ 1,600.1 $ 2,984.6 $ 2,973.0 Average Earning Assets $
14,737.1 $ 14,590.3 $ 14,132.4 $ 14,675.3 $ 13,962.1 Average
Finance Receivables $ 15,854.4 $ 15,825.9 $ 15,181.0 $ 15,837.2 $
14,952.2
Non-Strategic Portfolios Total interest income $
10.2 $ 12.3 $ 25.6 $ 22.5 $ 54.0 Total interest expense (9.2 )
(10.8 ) (23.0 ) (20.0 ) (47.9 ) Provision for credit losses - - 0.7
- (0.3 ) Rental income on operating leases 5.2 5.9 9.4 11.1 18.9
Other income (5.7 ) (7.8 ) 3.9 (13.5 ) 8.3 Depreciation on
operating lease equipment - - (5.7 ) - (10.9 ) Operating expenses
(10.9 ) (12.4 ) (20.5 ) (23.3 )
(39.7 ) Loss before provision for income taxes $ (10.4 ) $ (12.8 )
$ (9.6 ) $ (23.2 ) $ (17.6 ) Funded new business volume $ 26.4 $
37.7 $ 64.1 $ 64.1 $ 115.9 Average Earning Assets $ 315.3 $ 360.0 $
988.1 $ 338.8 $ 1,082.1 Average Finance Receivables $ - $ 0.1 $
83.9 $ - $ 280.7
Corporate and Other Total interest income $
4.7 $ 4.2 $ 3.2 $ 8.9 $ 6.9 Total interest expense (17.8 ) (17.8 )
(16.0 ) (35.6 ) (33.4 ) Provision for credit losses - - - - (0.1 )
Other income (16.6 ) (6.4 ) 9.7 (23.0 ) 7.4 Operating expenses /
loss on debt extinguishment (11.2 ) (12.7 )
(9.2 ) (23.9 ) (22.5 ) Loss before provision for
income taxes $ (40.9 ) $ (32.7 ) $ (12.3 ) $ (73.6 ) $ (41.7 )
Total CIT Total interest income $ 283.8 $ 281.0 $ 309.8 $
564.8 $ 612.0 Total interest expense (265.2 ) (271.3 ) (262.2 )
(536.5 ) (534.1 ) Provision for credit losses (18.4 ) (34.6 ) (10.2
) (53.0 ) (46.9 ) Rental income on operating leases 531.7 530.6
519.6 1,062.3 1,011.5 Other income 63.5 86.4 93.7 149.9 164.8
Depreciation on operating lease equipment (157.8 ) (156.8 ) (157.3
) (314.6 ) (306.1 ) Maintenance and other operating lease expenses
(49.4 ) (46.1 ) (49.0 ) (95.5 ) (100.6 ) Operating expenses / loss
on debt extinguishment (235.1 ) (241.6 )
(225.4 ) (476.7 ) (458.9 ) Income from continuing
operations before provision for income taxes $ 153.1 $ 147.6
$ 219.0 $ 300.7 $ 341.7 Funded new
business volume $ 2,482.7 $ 1,917.1 $ 3,068.9 $ 4,399.8 $ 5,548.2
Average Earning Assets $ 34,097.5 $ 33,772.0 $ 33,186.7 $ 33,966.9
$ 32,669.0 Average Finance Receivables $ 19,511.7 $ 19,372.0 $
18,811.9 $ 19,443.6 $ 18,783.7
CIT GROUP INC. AND
SUBSIDIARIES Segment Margin (dollars in millions)
Quarters Ended Six Months Ended June
30, March 31, June 30, June 30,
2015
2015 2014 2015 2014 Transportation
& International Finance Average Earning Assets (AEA)
Aerospace $ 10,803.8 $ 10,911.0 $ 10,260.7 $ 10,864.4 $ 10,038.7
Rail 6,039.9 5,854.2 5,578.0 5,953.9 5,373.8 Maritime Finance
1,198.4 1,049.2 576.2 1,129.3 524.4 International Finance 1,003.0
1,007.3 1,651.3 1,005.2 1,687.9
Gross yield Aerospace 11.22%
11.36% 12.18% 11.28% 12.34% Rail 14.83% 14.81% 14.44% 14.80% 14.46%
Maritime Finance 5.12% 5.00% 5.58% 5.04% 5.27% International
Finance 10.48% 10.51% 8.59% 10.49% 8.55%
Total AEA $
19,045.1 $ 18,821.7 $ 18,066.2 $ 18,952.8 $ 17,624.8 Gross yield
11.94% 12.03% 12.34% 11.97% 12.41% Net Finance Margin 4.57% 4.57%
4.91% 4.57% 4.81%
North American Commercial
Finance Average Earning Assets (AEA) Real Estate Finance
$ 1,860.6 $ 1,777.7 $ 1,668.5 $ 1,819.9 $ 1,632.9 Corporate Finance
6,979.9 6,910.7 7,220.8 6,953.8 7,113.8 Equipment Finance 5,015.1
4,962.7 4,269.2 4,991.6 4,258.0 Commercial Services 881.5 939.2
973.9 910.0 957.4
Gross yield Real Estate Finance 4.00%
3.94% 4.10% 3.97% 4.04% Corporate Finance 4.46% 4.50% 5.71% 4.48%
5.37% Equipment Finance 9.56% 9.45% 9.52% 9.50% 9.52% Commercial
Services 4.81% 4.56% 4.99% 4.68% 4.93%
Total AEA $ 14,737.1
$ 14,590.3 $ 14,132.4 $ 14,675.3 $ 13,962.1 Gross yield 6.16% 6.12%
6.62% 6.14% 6.45% Net Finance Margin 3.60% 3.52% 4.13% 3.56% 3.88%
Gross Yield includes interest income and
rental 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,
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 Six Months Ended June
30, March 31, June 30, June 30, Total
Net Revenues(1) 2015 2015 2014
2015 2014 Interest income $ 283.8 $ 281.0 $ 309.8 $
564.8 $ 612.0 Rental income on operating leases 531.7
530.6 519.6 1,062.3
1,011.5 Finance revenue 815.5 811.6 829.4 1,627.1
1,623.5 Interest expense (265.2 ) (271.3 ) (262.2 ) (536.5 ) (534.1
) Depreciation on operating lease equipment (157.8 ) (156.8 )
(157.3 ) (314.6 ) (306.1 ) Maintenance and other operating lease
expenses (49.4 ) (46.1 ) (49.0 ) (95.5
) (100.6 )
Net finance revenue (NFR) 343.1 337.4
360.9 680.5 682.7 Other income 63.5 86.4
93.7 149.9 164.8
Total net revenues $ 406.6 $ 423.8 $ 454.6
$ 830.4 $ 847.5
NFR as a % of
AEA 4.02 % 4.00 % 4.35 % 4.01 %
4.18 %
Net Operating Lease Revenues(2)
Rental income on operating leases $ 531.7 $ 530.6 $ 519.6 $ 1,062.3
$ 1,011.5 Depreciation on operating lease equipment (157.8 ) (156.8
) (157.3 ) (314.6 ) (306.1 ) Maintenance and other operating lease
expenses (49.4 ) (46.1 ) (49.0 ) (95.5
) (100.6 )
Net operating lease revenue $ 324.5
$ 327.7 $ 313.3 $ 652.2 $ 604.8
June 30, March 31, December 31, June
30, Earning Assets(3) 2015 2015
2014 2014 Loans $ 19,649.3 $ 19,429.3 $ 19,495.0 $
18,604.4 Operating lease equipment, net 15,109.6 14,887.8 14,930.4
14,788.3 Assets held for sale 1,086.8 1,051.9 1,218.1 1,328.9
Credit balances of factoring clients (1,373.3 )
(1,505.3 ) (1,622.1 ) (1,296.5 ) Total earning assets
$ 34,472.4 $ 33,863.7 $ 34,021.4 $ 33,425.1
Quarters Ended Six Months Ended June
30, March 31, June 30, June 30,
Operating Expenses 2015 2015 2014
2015 2014 Operating expenses $ (235.0 ) $ (241.6 ) $
(225.0 ) $ (476.6 ) $ (458.5 ) Provision for severance and
facilities exiting activities 1.1 (1.0 )
5.6 0.1 15.5 Operating
expenses excluding restructuring costs(4) $ (233.9 ) $ (242.6 ) $
(219.4 ) $ (476.5 ) $ (443.0 ) Operating expenses excluding
restructuring costs as a % of AEA (2.74 %) (2.87 %)
(2.64 %) (2.81 %) (2.71 %)
June
30, March 31, December 31, June 30,
2015 2015 2014 2014 Continuing
Operations Total Assets Total Assets $ 46,657.2 $ 46,416.0 $
47,880.0 $ 44,152.7 Assets of discontinued operation -
- - (1.0 ) Continuing
operations total assets $ 46,657.2 $ 46,416.0 $
47,880.0 $ 44,151.7
June 30,
March 31, December 31, June 30, Tangible
Book Value(5) 2015 2015 2014
2014 Total common stockholders' equity $ 8,807.1 $ 8,758.6 $
9,068.9 $ 8,617.6 Less: Goodwill (565.9 ) (563.6 ) (571.3 ) (403.1
) Intangible assets (21.4 ) (23.2 ) (25.7 )
(16.6 ) Tangible book value $ 8,219.8 $ 8,171.8
$ 8,471.9 $ 8,197.9 (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 excluding restructuring
costs is a non-GAAP measure used by management to compare period
over period expenses. (5) 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/20150728005538/en/
CIT MEDIA RELATIONS:C. Curtis Ritter, 973-740-5390Senior Vice
President of Corporate CommunicationsCurt.Ritter@cit.comorMatt
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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