CIT Group reported net income of $104 million for the quarter ended March 31, 2015, compared to net income of $117 million for the first quarter of 2014. First quarter results were impacted by a higher tax provision resulting from the recognition of federal income tax expense due to the prior year partial reversal of the valuation allowance against our net deferred tax asset.
“During the quarter we completed our existing share repurchase program and returned nearly $360 million of capital to shareholders. Our results reflected lower profitability in our North American Commercial Finance business as well as lower utilization rates in our transportation business,” said John Thain, Chairman and Chief Executive Officer. “Looking ahead, we will continue to execute on our 2015 priorities while positioning CIT for the long-term. We remain focused on expanding our commercial banking and deposit franchises through the acquisition of OneWest Bank, returning excess capital to our shareholders through our additional $200 million share repurchase, and meeting the financing needs of our small business, middle market and transportation customers.”
Net income from continuing operations of $104 million includes a $44 million tax provision. Net income also reflects the absence of interest recoveries and lower utilization rates. In addition, net income includes $6 million of charges related to portfolios that we are exiting.
Total assets from continuing operations at March 31, 2015 were $46.4 billion, compared to $47.9 billion at December 31, 2014, and $44.9 billion at March 31, 2014. Financing and leasing assets in North American Commercial Finance (NACF) and Transportation & International Finance (TIF) were $35.0 billion, down slightly from December 31, 2014 reflecting asset sales and up $2.3 billion (7%) from a year ago reflecting strong origination volumes in 2014 and the acquisition of Direct Capital. The Non-Strategic Portfolios declined slightly from December 31, 2014 to $0.3 billion, and by $0.8 billion from a year ago, reflecting portfolio run off and asset sales. Total loans of $19.4 billion decreased $0.1 billion from December 31, 2014 but increased by $0.9 billion from a year ago. Operating lease equipment of $14.9 billion was relatively unchanged from December 31, 2014 and increased $0.7 billion from a year ago. Cash and securities of $8.1 billion were down $1.2 billion from December 31, 2014 and $0.8 billion from March 31, 2014.
Net finance revenue was $337 million, improved from $322 million in the year-ago quarter but down from $373 million in the prior quarter. Average earning assets were $33.8 billion in the current quarter, up from $32.1 billion in the year-ago quarter and down from $34.3 billion in the prior quarter. Net finance revenue as a percentage of average earning assets (“net finance margin”) was 4.00%, compared to 4.01% in the year-ago quarter and 4.34% in the prior quarter. The fourth quarter of 2014 reflected stronger equipment utilization, a higher level of interest recoveries and the benefits from suspended depreciation on operating lease equipment held for sale.
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