Fourth-quarter profit tanked at CIT Group in New York, as the costs to dismiss former OneWest Bank executives, and losses tied to the sale of Brazilian businesses weighed on results.
The $67 billion-asset company's net income fell 42% to $144.5 million from a year earlier, CIT said in a news release Tuesday. Earnings per share fell 47% to 72 cents.
Net interest income after the provision for credit losses increased to $166.1 million from $14.3 million. Total loans rose 62% to $31.7 billion. The results were skewed by CIT's August acquisition of OneWest Bank.
Noninterest income, excluding rental income on operating leases, fell 74% to $30.4 million. Gains on sales of leasing equipment fell 68% to $16.9 million. The category also included a $30 million loss on the sale of businesses in Brazil, related to the recognition of $51 million of currency translation adjustment losses.
Noninterest expense rose 44% to $357.8 million. The figure excludes depreciation on operating lease equipment; maintenance and other operating lease expenses; and losses on debt extinguishment.
The expense line rose as CIT in December paid severance to 14 former OneWest executives who were fired or left the company after its purchase by CIT. The results included $76 million of aftertax charges related to "strategic initiatives and restructuring charges," CIT said in Tuesday's news release.
Separately, the activist investor Hudson Executive Capital plans to push John Thain, CIT's chairman and chief executive, to sell or spin off parts of CIT, according to the Wall Street Journal. Hudson Executive on Monday reported in a regulatory filing that it owns about 946,000 shares of CIT. That's equal to a 0.5% stake in the company, the Journal said.