CIT Group reported a loss in the fourth quarter, primarily due to a charge tied to its equipment finance business, but the New York company's core lending business continued to expand under CEO Ellen Alemany.
The net loss at the $49 billion-asset company was $93 million, or 74 cents per share. In the year-earlier period CIT reported a loss of $426 million, or $5.65 per share.
Results from the quarter included numerous one-time items. The largest was a $222 million goodwill impairment charge that was mostly related to equipment finance in its commercial banking segment. CIT also booked a $20 million restructuring charge; a $12 million net benefit associated with the new federal tax law; and a $10 million benefit from the impact of the tax law on its European rail business.
Excluding the one-time items, net income was $130 million, or 99 cents per share, which was 23 cents better than the mean estimate of analysts compiled by FactSet Research Systems. That was a 4% improvement over the results from 2016 when one-time items were removed from the year-earlier period’s results.
Alemany attributed the improved core results to lower expenses and an expansion of commercial loans and leases. Loans and leases rose 1% to $38 billion, primarily on higher origination volume in commercial banking.
“We achieved a number of milestones in 2017 and entered this year as a simpler and stronger company that is positioned for growth,” Alemany said in a news release. “We addressed noncore assets and legacy issues, reduced operating expenses, strengthened our funding profile, and expanded our business footprint in key markets.”
Net finance revenue fell 5% to $399 million on lower purchase accounting accretion and lower yields from CIT’s railroad business.
Noninterest income swung to a $137 million gain from a $118 million loss. The 2017 quarter included higher returns from bank-owned life insurance and an increase in capital-markets fees. The loss in the fourth quarter of 2016 resulted from higher expenses related to the sale of certain businesses.
Noninterest expenses dropped 20% to $561 million on lower professional fees and technology expenses.