CIT Group in New York reported lower second-quarter profit, as higher expenses and a drop in fee income offset loan growth. The sale of a student-loan business last year partly skewed the results.
The $46.7 billion-asset CIT said its net income fell 53% to $115.3 million, or 66 cents per share, versus a year ago. That was a penny better than the average estimate of analysts polled by Bloomberg.
CIT last year sold its student-loan business to Nelnet. That sale removed income totaling $52 million, or 27 cents per share.
Noninterest income, the largest part of CIT's business, fell 3% to $595.2 million. Rental income on operating leases rose 2% to $531.7 million. However, last year's second quarter included a one-time boost of $23.5 million. Additionally, CIT swung to a $5 million loss on on derivatives and foreign currency exchange, from an $8.3 million gain.
Net interest income fell 61% to $18.6 million. Financing and leasing assets in two divisions Transportation & International Finance and North American Commercial Finance, rose 4%.
Noninterest expense rose 2% to $442.3 million on an increase in the depreciation on operating lease equipment, as well as higher salaries and employee-benefit costs, merger-related expenses, professional fees and technology expenses.
CIT expects to close its pending acquisition of the $22 billion-asset OneWest Bank on Monday. CIT received conditional regulatory approval last week for its purchase of the Pasadena, Calif., company.