CIT Group misses by $0.19, beats on revs
Reports Q4 (Dec) earnings of $0.65 per share, $0.19 worse than the Capital IQ Consensus Estimate of $0.84; revenues fell 5.6% year/year to $337 mln vs the $331.56 mln consensus.
- Net finance revenue as a percentage of average earning assets ("net finance margin") was 3.95% in the fourth quarter, improved from 3.86% in the year-ago quarter and down from 4.22% in the prior quarter.
- Excluding the impact of debt redemptions, net finance margin was 4.00% in the current quarter, down from 4.88% in the year-ago quarter and 4.22% in the prior quarter, primarily reflecting the sale of higher-yielding Vendor Finance assets and a decline in operating lease margin and net FSA accretion.
- Credit metrics remained at cyclical lows. Net charge-offs were $15 mln, or 0.27% of average finance receivables, versus $17 mln (0.34%) in the year-ago quarter and $27 mln (0.50%) in the prior quarter.
- Net charge-offs in the commercial segments were 0.32% of average finance receivables, improved from 0.41% in the year-ago quarter and 0.59% in the prior quarter. Charge-offs this quarter included $5 mln related to transfers of loans to assets held for sale, while the prior quarter included $12 mln of such charge-offs.
- The provision for credit losses was $14 mln in the current quarter, up from $0.1 mln in the year-ago quarter and down from $16 mln in the prior quarter.
- Tier 1 Capital Ratio of 16.7%
- Total Capital Ratio of 17.4%.