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CIT Group Inc. (NYSE: CIT), a leading provider of financing and advisory services to small businesses and middle market companies, today reported net income of $207 million, $1.03 per diluted share, for the fourth quarter of 2012, improved from $36 million, $0.18 for the year-ago quarter. The current period includes net charges of $83 million related to the redemption of student loan asset-backed securities and certain senior unsecured notes, while the year-ago period included debt redemption charges of $150 million. Pre-tax income excluding debt redemption charges for the quarter was $334 million, up from $221 million in the year-ago quarter. There was a net loss for the year ending December 31, 2012 of $592 million ($2.95 per share), which included $1.5 billion of debt redemption charges, compared to net income of $15 million, ($0.07 per share) for the year ended December 31, 2011, which included $528 million of debt redemption charges.
“We made significant progress in advancing our corporate strategy in 2012,” said
John Thain, Chairman and Chief Executive Officer. “We grew commercial assets, diversified our funding mix, and expanded new business initiatives that further support our small business and middle market clients. We remain focused on positioning CIT for future growth and profitability as we drive operating efficiencies, prudently grow our assets, and expand CIT Bank.”
In preparing the financial statements for the quarter and year ended December 31, 2012, management identified errors that were not material to any individual prior period, but determined that correcting these errors in the current period would have been material to the 2012 full year statement of operations. Therefore, CIT will revise its previously reported financial statements for the first three quarters of 2012, and for the years ended December 31, 2011 and 2010 for these and other previously disclosed out-of-period errors. The cumulative effect of these errors was to increase tangible book value (TBV) per common share by $0.04, which is reflected in the $39.61 TBV per share at December 31, 2012. Further information is provided in the “Prior Period Revisions” section and the Appendix. All prior period data in this release and in the Financial Data Package (which is available on our website at
www.cit.com/investor) reflect the revised balances.
Summary of Fourth Quarter Financial Results
Fourth quarter results reflect increased business activity, continued positive portfolio performance, and the benefits of our liability restructuring and other balance sheet management actions. Pre-tax income was $252 million for the quarter and included net charges of $83 million related to debt redemptions, compared to pretax income of $71 million in the year-ago quarter, which included $150 million of debt redemption charges. Excluding these charges, pretax income was $334 million in the current quarter, improved from $221 million in the year-ago quarter and $176 million in the prior quarter. See the Non-GAAP disclosure table on page 19 for additional information.