Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE                                      

                             

CIT REPORTS FOURTH QUARTER 2015 NET INCOME OF $144 MILLION ($0.72 PER DILUTED SHARE); FULL YEAR NET INCOME OF $1,057 MILLION ($5.67 PER DILUTED SHARE)

 

  • Results Include After-Tax Charges of $76 million ($0.38) Per Diluted Share Related to Strategic Initiatives and Restructuring Charges Completed sale of Brazil business, streamlined senior management structure and recognized a tax benefit on a previously sold international portfolio;

 

  • Grew Financing and Leasing Assets Combined North America Banking and Transportation & International Finance financing and leasing assets grew 27% from a year ago, (5% excluding assets acquired from OneWest Bank);

 

  • Continued Progress Towards Bank-Centric Model – 65% of total financing and leasing assets in CIT Bank and deposits represent 64% of total funding; reduced weighted average costs of funds by 100 basis points from prior year;

 

  • Strong Capital Ratios – Common Equity Tier 1 of 12.7% and Total Capital Ratio of 13.3%.

 

NEW YORK, NY – February 2, 2016 –

CIT Group Inc. (NYSE: CIT) cit.com, a leading provider of commercial lending and leasing services, today reported net income of $144 million, $0.72 per diluted share, for the fourth quarter of 2015, compared to net income of $251 million, $1.37 per diluted share, for the year-ago quarter. Income from continuing operations for the fourth quarter was $151 million, $0.75 per diluted share compared to $252 million, $1.37 per diluted share in the year-ago quarter. Net income for the year-ago quarter included $44 million, ($0.24) per diluted share, from the reversal of the valuation allowance related to certain international deferred tax assets.

 

Net income for the year ended December 31, 2015 was $1,057 million, $5.67 per diluted share, compared to $1,130 million, $5.96 per diluted share, for the year ended December 31, 2014. Income from continuing operations for the year ended December 31, 2015 was $1,067 million, $5.72 per diluted share, compared to $1,078 million, $5.69 per diluted share for the year ended December 31, 2014. Net income for the year ended December 31, 2015 included $647 million, $3.47 per diluted share, of income tax benefits associated with the partial reversals of the valuation allowances on certain domestic and international deferred tax assets, while the prior year included $419 million of such benefits, or $2.21 per diluted share.

 

“CIT’s evolution to a commercial bank model progressed throughout 2015 as we completed the acquisition of OneWest Bank, sold our non-strategic businesses in Brazil and Mexico, began the sale process for other international businesses and are exploring strategic alternatives for our Commercial Air Business,” said John A. Thain, Chairman and Chief Executive Officer. “We returned nearly $650 million of capital and increased CIT’s Bank deposits. CIT maintains strong capital and liquidity and is well positioned to build on our achievements under my successor Ellen Alemany and her leadership team.”

 

2 

During the current quarter, a specific reserve related to Discontinued Operations was increased by $38 million of which the majority was recorded as an adjustment to goodwill. The company is continuing to evaluate this reserve which could result in additional changes to the financial statements.

 

Summary of Fourth Quarter Financial Results from Continuing Operations

All references in this section relate to continuing operations and therefore do not include any of the assets or results of operations of the discontinued operations.

On August 3, 2015, CIT acquired IMB HoldCo LLC, the parent company of OneWest Bank, which impacts the comparability of current results to prior periods. The current quarter reflects a full quarter of OneWest Bank’s results of operations while the prior quarter reflects two months and the prior-year period does not include any results from OneWest Bank.

Selected Financial Highlights (Continuing Operations)

            Change from:
   4Q15  3Q15  4Q14  Prior Quarter*  Prior Year*
($ in millions, except per share data)                         
Pre-tax income  $141   $137   $222   $4   $(81)
Net income  $151   $697   $252   $(546)  $(101)
Diluted earnings per share (EPS)  $0.75   $3.63   $1.37   $(2.88)  $(0.62)
EPS impact from VA Reversal  $-   $3.37   $0.24   $(3.37)  $(0.24)
                          
Pre-tax return on average earning assets (ROAEA)   0.95%   1.04%   2.12%   -0.09%   -1.17%
Net finance margin   3.57%   3.67%   3.56%   -0.10%   0.02%
Net efficiency ratio   53.3%   62.2%   49.3%   -8.9%   4.0%
Tangible book value per share (TBVPS)  $47.73   $47.09   $46.83   $0.65   $0.91 
                          
CET 1 Ratio(1)   12.7%   12.4%   NA    0.3%   NA 
Total Capital Ratio(1)    13.3%   12.9%   15.2%   0.4%   -1.9%
                          
Net charge-offs  as % of AFR   0.40%   0.86%   0.47%   -0.46%   -0.07%
Allowance for loan losses as % of finance receivables   1.14%   1.03%   1.78%   0.10%   -0.64%
                          
Average earning assets  $59,142   $52,448   $41,936   $6,693   $17,206 
Financing and leasing assets  $50,381   $50,099   $35,644   $282   $14,738 

* Certain balances may not sum due to rounding.

(1) The third quarter risk weighted assets were increased by $0.8 billion to conform to the current quarter’s presentation. Due to the increase in risk weighted assets, the third quarter CET ratio and total capital ratio each decreased by 0.1%.

Income from continuing operations of $151 million includes discrete items of $76 million resulting from our strategic initiatives and restructuring charges. Discrete items include a $58 million after-tax charge related to the sale of our Brazil business due primarily to the realization of the currency translation adjustment (“CTA”), restructuring costs of $33 million (after-tax) related to the streamlining of the Bank and Bank Holding Company management structure and a tax benefit of $15 million related to the resolution of a tax position on one of the international portfolios we have exited. In addition, operating expenses benefited from the reversal of accruals for incentive compensation and benefits related to management and other changes and the current quarter’s tax provision was positively impacted by a year-end true-up to reflect the full year actual geographic mix of earnings.

 

3 

Tangible book value per share1 increased to $47.73 reflecting growth from net income excluding the CTA loss which was previously recorded in Other Comprehensive Income. Estimated Common Equity Tier 1 and Total Capital ratios at December 31, 2015 increased to 12.7% and 13.3%, respectively, as calculated under the fully phased-in Regulatory Capital Rules. Average earning assets2 at December 31, 2015 increased to $59.1 billion reflecting a full quarter of OneWest assets.

Income Statement Highlights:

Net Finance Revenue*           Change from:
($ in millions)  4Q15  3Q15  4Q14  Prior Quarter  Prior Year
                
Interest income  $510   $438   $306   $73   $204 
Rental income on operating leases   551    539    547    12    4 
Finance revenue   1,061    977    853    84    209 
Interest expense   (287)   (280)   (277)   (6)   (10)
Depreciation on operating lease equipment   (167)   (159)   (153)   (8)   (14)
Maintenance and other operating lease expenses   (80)   (56)   (50)   (24)   (30)
Net finance revenue  $528   $482   $373   $47   $155 
                          
Average earning assets  $59,142   $52,448   $41,936   $6,693   $17,206 
Net finance margin   3.57%   3.67%   3.56%   -0.10%   0.02%
* Certain balances may not sum due to rounding.

Net finance revenue3 was $528 million in the current quarter, compared to $482 million in the prior quarter and $373 million in the year-ago quarter. Average earning assets were $59 billion in the current quarter reflecting a full quarter of earnings assets acquired from OneWest Bank. Net finance revenue as a percentage of average earning assets (“net finance margin”) decreased from the prior quarter and increased slightly from the year-ago quarter. The decrease from the prior quarter reflects yield pressure primarily from lower rail utilization and higher operating lease and maintenance cost partially offset by a full quarter contribution from the OneWest Bank acquisition. The slight increase from the year-ago quarter reflects the benefits from the OneWest acquisition offset by pressure on portfolio yields and the absence of interest recoveries.

Other Income*           Change from:
($ in millions)  4Q15  3Q15  4Q14  Prior Quarter  Prior Year
                
Factoring commissions  $29   $31   $32   $(2)  $(3)
Fee revenues   32    28    26    4    6 
Gains on sales of leasing equipment   17    31    52    (14)   (35)
(Losses) gains on loan and portfolio sales   (41)   (15)   17    (27)   (58)
(Losses) gains on investments   (6)   2    25    (8)   (30)
Losses on OREO sales   (2)   (3)   -    1    (2)
Net gains (losses) on derivatives and foreign currency exchange   2    (20)   (16)   22    18 
Impairment on assets held for sale   (15)   (24)   (31)   9    16 
Other revenues   14    9    12    5    2 
Total other income  $30   $39   $116   $(9)  $(86)
* Certain balances may not sum due to rounding.

 


The following information was filed by Cit Group Inc (CIT) on Tuesday, February 2, 2016 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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