CIT reports second quarter 2013 net income of $184 million
25 July 2013
CIT Group Inc has reported net income of $184 million ($0.91 per diluted share) for the second quarter of 2013, compared to a net loss of $73 million ($0.36 per diluted share) for the second quarter of 2012.
Net income for the six month period ended 30 June 2013 was $346 million ($1.71 per diluted share) compared to a net loss of $500 million ($2.49 per diluted share).
Prior year results include significant debt redemption charges.
Total assets of the company stood at $44.6 billion at the end of June 2013, up slightly from 31 March 2013, and up $1.8 billion from 30 June 2012.
Commercial financing and leasing assets increased from prior periods to $31.7 billion.
However, consumer assets declined by approximately $70 million from 31 March 2013, reflecting continued losses on student loans, and by almost $1.0 billion from a year ago, primarily due to the sale of student loans in the second half of 2012.
Total loans of $21.7 billion increased by $1.6 billion from a year ago, and were essentially flat sequentially.
Operating lease equipment increased $0.4 billion from a year ago to $12.3 billion and increased modestly from 31 March 2013.
Cash and short-term investments of $6.9 billion were unchanged from last quarter and down $0.1 billion from 30 June 2012.
''Our financial results this quarter demonstrate the progress we have made in building our franchise and meeting our profitability targets,'' said John Thain, chairman and chief executive officer. ''We grew CIT Bank assets and deposits and advanced our expense reduction initiatives as we continued to provide financing to our small business, middle market and transportation clients. The termination of the written agreement and our announced share repurchase plan were important milestones that enhance our ability to create value for our shareholders.''
Second quarter results reflect growth in earning assets, lower funding costs, and continued strong portfolio performance, in addition to the absence of significant debt redemption charges in the current quarter, the company said.
Net finance revenue rose to $381 million from $92 million in the year-ago quarter on the back of a further improvement in funding costs.
Net finance revenue in the year-ago quarter included approximately $286 million of debt redemption costs.
Average earning assets were $33.7 billion in the current quarter, up from $32.3 billion from the year-ago quarter and $33.0 billion in the prior quarter.
Net finance revenue as a percentage of average earning assets (finance margin) was up at 4.53 per cent, against 1.13 per cent in the year-ago quarter and 4.43 per cent in the prior quarter.
Excluding the impact of debt redemptions, net finance margin was 4.62 per cent, up from 4.41 per cent in the year-ago quarter.
Other income of $79 million declined from $139 million in the year-ago quarter and increased from $70 million in the prior quarter.
Operating expenses were $230 million and included $10 million of restructuring costs and a benefit in professional fees. Excluding restructuring costs, operating expenses were $220 million, compared to $225 million in the year-ago quarter and $230 million in the prior quarter.
Headcount as of 30 June 2013 was approximately 3,420, down from 3,570 a year ago and 3,490 as of 31 March 2013.
CIT has made a $32 million provision for income taxes in the second quarter, which include over $20 million related to the establishment of valuation allowances on certain international deferred tax assets.
US-based CIT group is a leading provider of financing and advisory services to small businesses and middle market companies.