CIT Group today reported net income of $130 million for the fourth quarter of 2013, compared to net income of $207 million for the fourth quarter of 2012. Net income for the year ended December 31, 2013 was $676 million compared to a net loss of $592 million which included $1.5 billion of debt redemption charges, for the year ended December 31, 2012.
“In 2013, we returned CIT to profitability, grew CIT Bank and our commercial assets, while rationalizing our global platforms and returning capital to shareholders,” said John Thain, Chairman and Chief Executive Officer. "We remain focused on enhancing the value of our franchise as we put our knowledge to work to meet the lending, leasing and advisory needs of our small business middle market and transportation clients.”
Selected Segment Highlights
Corporate Finance
Pre-tax earnings for the quarter were $81 million, down from $105 million in the year-ago quarter. While both quarters benefited from a number of items, the decrease from the year-ago quarter primarily reflects lower net FSA accretion. Pre-tax earnings for the quarter improved from $37 million in the prior quarter, primarily as a result of a gain on sale of a leveraged lease and a benefit from a workout-related claim.
Financing and leasing assets grew to nearly $10 billion, up $0.2 billion from September 30, 2013, with solid new business volumes being partially offset by prepayment activity, and up $1.7 billion from December 31, 2012, which also reflected a portfolio purchased during the first quarter of 2013. Funded loan volume, which included a balanced mix of asset-secured and cash flow loans, totaled $1.3 billion, down from $1.5 billion in the year-ago quarter, and up from $1.1 billion in the prior quarter.
Credit metrics remained at cyclical lows. Non-accrual loans declined to $127 million (1.34% of finance receivables) from $212 million (2.59%) a year ago and $155 million (1.68%) at September 30, 2013. There were net recoveries of $5 million (0.23% of average finance receivables), compared to net charge-offs of $14 million (0.72%) in the year-ago quarter and $9 million (0.39%) in the prior quarter.
Trade Finance
Pre-tax earnings for the quarter were $16 million, compared to $21 million in the year-ago quarter, and $17 million in the prior quarter. Factoring volume was $6.8 billion, down slightly from the year-ago quarter, and up 3% sequentially, reflecting seasonality. Factoring commissions of $31 million were down modestly from the year-ago period and from the prior quarter.
Credit metrics remained favorable. Non-accrual balances of $4 million declined from $6 million a year ago and from $7 million at September 30, 2013. There was a modest net recovery in the current quarter and in each of the year-ago and prior quarters.
CIT Bank
Total assets were $16.1 billion at December 31, 2013, up $1.5 billion from September 30, 2013 and up $3.9 billion from a year ago. CIT Bank funded $2.1 billion of new business volume, which represented essentially all of the U.S. volume for Corporate Finance, Transportation Finance and Vendor Finance. Funded volumes were up 6% from the year-ago quarter and up 30% sequentially. Commercial loans totaled $12.0 billion, up from $10.9 billion at September 30, 2013 and $8.0 billion at December 31, 2012. Operating lease equipment of $1.3 billion, primarily railcars, increased from $1.1 billion at September 30, 2013 and $0.7 billion at December 31, 2012. Cash totaled $2.5 billion at December 31, 2013, unchanged from September 30, 2013, and down from $3.4 billion at December 31, 2012. Preliminary Total Capital and Tier 1 Leverage ratios were 18.1% and 17.0%, respectively, at December 31, 2013.
Total deposits at quarter-end were $12.5 billion, up from $11.8 billion at September 30, 2013 and $9.6 billion at December 31, 2012. The weighted average rate on outstanding deposits was 1.55% at December 31, 2013.
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