CIT Reports Q4 Funded Volume Increased 92%
CIT Group reported net income of $34 million for the fourth quarter and $28 million for the year ended December 31, 2011. These results compare to net income of $83 million for the year-ago quarter and $526 million for the year ended December 31, 2010. The company said the declines reflect reduced benefits from fresh start accounting (FSA). Pre-tax income excluding net FSA accretion and the costs associated with accelerated debt repayment1 was $140 million and $302 million for the 2011 fourth quarter and full year, respectively, and improved from pre-tax losses of $160 million and $575 million for the respective 2010 periods.
The company said funded new business volume of $2.9 billion increased 55% sequentially and 92% from the prior-year quarter, while committed new business volume of $3.3 billion increased 40% sequentially and 70% from a year ago. Corporate Finance, Transportation Finance and Vendor Finance each reported increases in both funded and committed volume when compared to both the prior quarter and prior-year quarter.
CIT said credit metrics further improved, as net charge-offs, non-accrual loans and inflows to non-accruals all declined from the prior quarter and the prior-year quarter. Net charge-offs were $24 million, down from $46 million last quarter and $180 million in the fourth quarter of 2010. The declines were primarily in Corporate Finance and Vendor Finance. Net charge-offs in the prior year quarter were elevated in both Vendor Finance and Small Business Lending (reported in Corporate Finance) due to an acceleration of charge-offs based on delinquency status in selected small-ticket portfolios.
“We made significant progress this past year advancing our goals and priorities,” said John A. Thain, chairman and chief executive officer. “Our new business activity increased and we lowered our cost of funds through the reduction of high cost debt and the growth of CIT Bank and other funding sources.”
To read the full CIT news release, click here.