Washington, D.C. 20549
|X| Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2015 |
| | Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 |
Delaware
(State or other jurisdiction of incorporation or organization) |
65-1051192
(IRS Employer Identification Number) |
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11 West 42nd
Street New York, New York
(Address of Registrants principal executive offices) |
10036
(Zip Code) |
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(212)
461-5200
(Registrants telephone number) |
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165 | |||||||||||
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173 |
CIT GROUP INC. AND SUBSIDIARIES
September 30,
2015 |
December 31,
2014 |
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Assets
|
||||||||||
Cash and due
from banks, including restricted balances of $617.2 and $374.0 at September 30, 2015 and December 31, 2014
(1)
,
respectively
|
$ | 1,653.6 | $ | 878.5 | ||||||
Interest
bearing deposits, including restricted balances of $219.2 and $590.2 at September 30, 2015 and December 31, 2014
(1)
,
respectively
|
6,606.3 | 6,241.2 | ||||||||
Securities
purchased under agreements to resell
|
100.0 | 650.0 | ||||||||
Investment
securities
|
3,618.8 | 1,550.3 | ||||||||
Assets held for
sale
(1)
|
2,154.3 | 1,218.1 | ||||||||
Loans (see Note
9 for amounts pledged)
|
32,406.2 | 19,495.0 | ||||||||
Allowance for
loan losses
|
(335.0 | ) | (346.4 | ) | ||||||
Total loans,
net of allowance for loan losses
(1)
|
32,071.2 | 19,148.6 | ||||||||
Operating lease
equipment, net (see Note 9 for amounts pledged)
(1)
|
15,538.2 | 14,930.4 | ||||||||
Indemnification
assets
|
465.0 | | ||||||||
Unsecured
counterparty receivable
|
529.5 | 559.2 | ||||||||
Goodwill
|
1,135.1 | 571.3 | ||||||||
Intangible
assets
|
201.3 | 25.7 | ||||||||
Other assets,
including $222.6 and $168.4 at September 30, 2015 and December 31, 2014, respectively, at fair value
|
3,538.4 | 2,106.7 | ||||||||
Assets of
discontinued operations
|
513.8 | | ||||||||
Total
Assets
|
$ | 68,125.5 | $ | 47,880.0 | ||||||
Liabilities
|
||||||||||
Deposits
|
$ | 32,328.9 | $ | 15,849.8 | ||||||
Credit balances
of factoring clients
|
1,609.3 | 1,622.1 | ||||||||
Other
liabilities, including $247.3 and $62.8 at September 30, 2015 and December 31, 2014, respectively, at fair value
|
3,395.7 | 2,888.8 | ||||||||
Borrowings,
including $4,006.4 and $3,053.3 contractually due within twelve months at September 30, 2015 and December 31, 2014, respectively
|
19,320.5 | 18,455.8 | ||||||||
Liabilities of
discontinued operations
|
671.9 | | ||||||||
Total
Liabilities
|
57,326.3 | 38,816.5 | ||||||||
Stockholders Equity
|
||||||||||
Common stock:
$0.01 par value, 600,000,000 authorized
|
||||||||||
Issued:
204,344,215 and 203,127,291 at September 30, 2015 and December 31, 2014, respectively
|
2.0 | 2.0 | ||||||||
Outstanding:
200,952,387 and 180,920,575 at September 30, 2015 and December 31, 2014, respectively
|
||||||||||
Paid-in
capital
|
8,683.5 | 8,603.6 | ||||||||
Retained
earnings
|
2,443.4 | 1,615.7 | ||||||||
Accumulated
other comprehensive loss
|
(174.3 | ) | (133.9 | ) | ||||||
Treasury stock:
3,391,828 and 22,206,716 shares at September 30, 2015 and December 31, 2014, respectively, at cost
|
(155.9 | ) | (1,018.5 | ) | ||||||
Total Common
Stockholders Equity
|
10,798.7 | 9,068.9 | ||||||||
Noncontrolling
minority interests
|
0.5 | (5.4 | ) | |||||||
Total
Equity
|
10,799.2 | 9,063.5 | ||||||||
Total
Liabilities and Equity
|
$ | 68,125.5 | $ | 47,880.0 |
(1)
|
The following table presents information on assets and liabilities related to Variable Interest Entities (VIEs) that are consolidated by the Company. The difference between VIE total assets and total liabilities represents the Companys interest in those entities, which were eliminated in consolidation. The assets of the consolidated VIEs will be used to settle the liabilities of those entities and, except for the Companys interest in the VIEs, are not available to the creditors of CIT or any affiliates of CIT. |
Assets
|
||||||||||
Cash and
interest bearing deposits, restricted
|
$ | 339.7 | $ | 537.3 | ||||||
Assets held for
sale
|
431.5 | | ||||||||
Total loans,
net of allowance for loan losses
|
2,729.7 | 3,619.2 | ||||||||
Operating lease
equipment, net
|
4,151.4 | 4,219.7 | ||||||||
Other
|
14.0 | 10.0 | ||||||||
Total
Assets
|
$ | 7,666.3 | $ | 8,386.2 | ||||||
Liabilities
|
||||||||||
Beneficial
interests issued by consolidated VIEs (classified as borrowings)
|
$ | 4,643.5 | $ | 5,331.5 | ||||||
Total
Liabilities
|
$ | 4,643.5 | $ | 5,331.5 |
CIT GROUP INC. AND SUBSIDIARIES
Quarters Ended September 30,
|
Nine Months Ended September 30,
|
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
2015
|
2014
|
||||||||||||||||
Interest
income
|
|||||||||||||||||||
Interest and
fees on loans
|
$ | 414.2 | $ | 299.9 | $ | 961.4 | $ | 894.7 | |||||||||||
Other
interest and dividends
|
23.5 | 8.4 | 41.1 | 25.6 | |||||||||||||||
Interest
income
|
437.7 | 308.3 | 1,002.5 | 920.3 | |||||||||||||||
Interest
expense
|
|||||||||||||||||||
Interest on
borrowings
|
(187.2 | ) | (216.0 | ) | (582.5 | ) | (642.1 | ) | |||||||||||
Interest on
deposits
|
(93.1 | ) | (59.2 | ) | (234.3 | ) | (167.2 | ) | |||||||||||
Interest
expense
|
(280.3 | ) | (275.2 | ) | (816.8 | ) | (809.3 | ) | |||||||||||
Net interest
revenue
|
157.4 | 33.1 | 185.7 | 111.0 | |||||||||||||||
Provision for
credit losses
|
(49.9 | ) | (38.2 | ) | (102.9 | ) | (85.1 | ) | |||||||||||
Net interest
revenue, after credit provision
|
107.5 | (5.1 | ) | 82.8 | 25.9 | ||||||||||||||
Non-interest
income
|
|||||||||||||||||||
Rental income
on operating leases
|
539.3 | 535.0 | 1,601.6 | 1,546.5 | |||||||||||||||
Other
income
|
39.2 | 24.2 | 189.1 | 189.0 | |||||||||||||||
Total
non-interest income
|
578.5 | 559.2 | 1,790.7 | 1,735.5 | |||||||||||||||
Total
revenue, net of interest expense and credit provision
|
686.0 | 554.1 | 1,873.5 | 1,761.4 | |||||||||||||||
Non-interest
expenses
|
|||||||||||||||||||
Depreciation
on operating lease equipment
|
(159.1 | ) | (156.4 | ) | (473.7 | ) | (462.5 | ) | |||||||||||
Maintenance
and other operating lease expenses
|
(55.9 | ) | (46.5 | ) | (151.4 | ) | (147.1 | ) | |||||||||||
Operating
expenses
|
(333.9 | ) | (234.5 | ) | (810.5 | ) | (693.0 | ) | |||||||||||
Loss on debt
extinguishment
|
(0.3 | ) | | (0.4 | ) | (0.4 | ) | ||||||||||||
Total
non-interest expenses
|
(549.2 | ) | (437.4 | ) | (1,436.0 | ) | (1,303.0 | ) | |||||||||||
Income from
continuing operations before benefit for income taxes
|
136.8 | 116.7 | 437.5 | 458.4 | |||||||||||||||
Benefit for
income taxes
|
560.0 | 401.2 | 478.2 | 369.6 | |||||||||||||||
Income from
continuing operations, before attribution of noncontrolling interests
|
696.8 | 517.9 | 915.7 | 828.0 | |||||||||||||||
Net (income)
loss attributable to noncontrolling interests, after tax
|
| (2.5 | ) | 0.1 | (2.5 | ) | |||||||||||||
Income from
continuing operations
|
696.8 | 515.4 | 915.8 | 825.5 | |||||||||||||||
Discontinued
operations
|
|||||||||||||||||||
Loss from
discontinued operations, net of taxes
|
(3.7 | ) | (0.5 | ) | (3.7 | ) | (229.3 | ) | |||||||||||
Gain on sale of
discontinued operations
|
| | | 282.8 | |||||||||||||||
Total (loss)
income from discontinued operations, net of taxes
|
(3.7 | ) | (0.5 | ) | (3.7 | ) | 53.5 | ||||||||||||
Net
Income
|
$ | 693.1 | $ | 514.9 | $ | 912.1 | $ | 879.0 | |||||||||||
Basic income
per common share
|
|||||||||||||||||||
Income from
continuing operations
|
$ | 3.66 | $ | 2.78 | $ | 5.08 | $ | 4.34 | |||||||||||
(Loss) income
from discontinued operations
|
(0.02 | ) | | (0.02 | ) | 0.28 | |||||||||||||
Basic income
per share
|
$ | 3.64 | $ | 2.78 | $ | 5.06 | $ | 4.62 | |||||||||||
Diluted
income per common share
|
|||||||||||||||||||
Income from
continuing operations
|
$ | 3.63 | $ | 2.76 | $ | 5.05 | $ | 4.31 | |||||||||||
(Loss) income
from discontinued operations
|
(0.02 | ) | | (0.02 | ) | 0.28 | |||||||||||||
Diluted
income per share
|
$ | 3.61 | $ | 2.76 | $ | 5.03 | $ | 4.59 | |||||||||||
Average
number of common shares (thousands)
|
|||||||||||||||||||
Basic
|
190,557 | 185,190 | 180,300 | 190,465 | |||||||||||||||
Diluted
|
191,803 | 186,289 | 181,350 | 191,433 | |||||||||||||||
Dividends
declared per common share
|
$ | 0.15 | $ | 0.15 | $ | 0.45 | $ | 0.35 |
CIT GROUP INC. AND SUBSIDIARIES
Quarters Ended September 30,
|
Nine Months Ended September 30,
|
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2015
|
2014
|
2015
|
2014
|
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Income from
continuing operations, before attribution of noncontrolling interests
|
$ | 696.8 | $ | 517.9 | $ | 915.7 | $ | 828.0 | |||||||||||
Other
comprehensive income (loss), net of tax:
|
|||||||||||||||||||
Foreign currency
translation adjustments
|
(8.7 | ) | (6.3 | ) | (33.4 | ) | (13.6 | ) | |||||||||||
Changes in
fair values of derivatives qualifying as cash flow hedges
|
| 0.3 | | 0.2 | |||||||||||||||
Net
unrealized gains (losses) on available for sale securities
|
(6.1 | ) | (0.4 | ) | (5.9 | ) | (0.1 | ) | |||||||||||
Changes in
benefit plans net gain (loss) and prior service (cost)/credit
|
(0.7 | ) | 1.8 | (1.1 | ) | 5.0 | |||||||||||||
Other
comprehensive (loss), net of tax
|
(15.5 | ) | (4.6 | ) | (40.4 | ) | (8.5 | ) | |||||||||||
Comprehensive
income (loss) before noncontrolling interests and discontinued operations
|
681.3 | 513.3 | 875.3 | 819.5 | |||||||||||||||
Comprehensive
(income) loss attributable to noncontrolling interests
|
| (2.5 | ) | 0.1 | (2.5 | ) | |||||||||||||
Income (loss)
from discontinued operations, net of taxes
|
(3.7 | ) | (0.5 | ) | (3.7 | ) | 53.5 | ||||||||||||
Comprehensive
income
|
$ | 677.6 | $ | 510.3 | $ | 871.7 | $ | 870.5 |
CIT GROUP INC. AND SUBSIDIARIES
Common
Stock |
Paid-in
Capital |
Retained
Earnings (Accumulated Deficit) |
Accumulated
Other Comprehensive Income (Loss) |
Treasury
Stock |
Noncontrolling
Minority Interests |
Total
Equity |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December
31, 2014
|
$ | 2.0 | $ | 8,603.6 | $ | 1,615.7 | $ | (133.9 | ) | $ | (1,018.5 | ) | $ | (5.4 | ) | $ | 9,063.5 | |||||||||||||
Net income
(loss)
|
| | 912.1 | | | (0.1 | ) | 912.0 | ||||||||||||||||||||||
Other
comprehensive loss, net of tax
|
| | | (40.4 | ) | | (40.4 | ) | ||||||||||||||||||||||
Dividends
paid
|
| | (84.4 | ) | | | | (84.4 | ) | |||||||||||||||||||||
Amortization of
restricted stock, stock option and performance shares expenses
|
| 59.8 | | | (22.0 | ) | | 37.8 | ||||||||||||||||||||||
Issuance of
common stock acquisition
|
| 45.6 | | | 1,416.4 | | 1,462.0 | |||||||||||||||||||||||
Repurchase of
common stock
|
| | | | (531.8 | ) | | (531.8 | ) | |||||||||||||||||||||
Employee stock
purchase plan
|
| 1.0 | | | | | 1.0 | |||||||||||||||||||||||
Purchase of
noncontrolling interest and distribution of earnings and capital
|
| (26.5 | ) | | | | 6.0 | (20.5 | ) | |||||||||||||||||||||
September 30,
2015
|
$ | 2.0 | $ | 8,683.5 | $ | 2,443.4 | $ | (174.3 | ) | $ | (155.9 | ) | $ | 0.5 | $ | 10,799.2 | ||||||||||||||
December 31,
2013
|
$ | 2.0 | $ | 8,555.4 | $ | 581.0 | $ | (73.6 | ) | $ | (226.0 | ) | $ | 11.2 | $ | 8,850.0 | ||||||||||||||
Net
income
|
| | 879.0 | | | 2.5 | 881.5 | |||||||||||||||||||||||
Other
comprehensive loss, net of tax
|
| | | (8.5 | ) | | | (8.5 | ) | |||||||||||||||||||||
Dividends
paid
|
| | (67.5 | ) | | | | (67.5 | ) | |||||||||||||||||||||
Amortization of
restricted stock, stock option and performance shares expenses
|
| 37.1 | | | (16.8 | ) | | 20.3 | ||||||||||||||||||||||
Repurchase of
common stock
|
| | | | (658.0 | ) | | (658.0 | ) | |||||||||||||||||||||
Employee stock
purchase plan
|
| 1.1 | | | | | 1.1 | |||||||||||||||||||||||
Distribution of
earnings and capital
|
| | | | | (14.9 | ) | (14.9 | ) | |||||||||||||||||||||
September 30,
2014
|
$ | 2.0 | $ | 8,593.6 | $ | 1,392.5 | $ | (82.1 | ) | $ | (900.8 | ) | $ | (1.2 | ) | $ | 9,004.0 |
CIT GROUP INC. AND SUBSIDIARIES
Nine Months Ended September 30,
|
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---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
||||||||||
Cash Flows
From Operations
|
|||||||||||
Net
income
|
$ | 912.1 | $ | 879.0 | |||||||
Adjustments to
reconcile net income to net cash flows from operations:
|
|||||||||||
Provision
for credit losses
|
102.9 | 85.1 | |||||||||
Net
depreciation, amortization and (accretion)
|
500.7 | 729.2 | |||||||||
Net gains on
asset sales
|
(66.6 | ) | (288.3 | ) | |||||||
Benefit for
deferred income taxes
|
(563.6 | ) | (395.5 | ) | |||||||
Increase in
finance receivables held for sale
|
(101.1 | ) | (144.7 | ) | |||||||
Goodwill impairment
|
29.0 | | |||||||||
Reimbursement of OREO expense from FDIC
|
2.2 | | |||||||||
(Increase)
decrease in other assets
|
(45.8 | ) | 124.4 | ||||||||
Increase
(decrease) in accrued liabilities and payables
|
11.0 | (148.1 | ) | ||||||||
Net cash flows
provided by operations
|
780.8 | 841.1 | |||||||||
Cash Flows
From Investing Activities
|
|||||||||||
Loans
originated and purchased
|
(10,548.4 | ) | (11,532.5 | ) | |||||||
Principal
collections of loans
|
9,224.8 | 9,880.8 | |||||||||
Purchases of
assets to be leased and other equipment
|
(1,717.9 | ) | (2,431.7 | ) | |||||||
Proceeds from
asset and receivable sales
|
1,455.7 | 2,578.5 | |||||||||
Purchases of
investment securities
|
(6,882.1 | ) | (8,494.4 | ) | |||||||
Proceeds from
maturities of investment securities
|
7,066.0 | 9,695.2 | |||||||||
Net increase in
short-term factoring receivables
|
(32.3 | ) | (112.2 | ) | |||||||
Purchases of
restricted stock
|
(126.2 | ) | | ||||||||
Proceeds from
redemption of restricted stock
|
18.3 | | |||||||||
Payments to the
FDIC under loss share agreements
|
(17.4 | ) | | ||||||||
Proceeds from
the FDIC under loss share agreements and participation agreements
|
11.3 | | |||||||||
Proceeds from
sales of other real estate owned, net of repurchases
|
24.2 | | |||||||||
Acquisitions,
net of cash received
|
2,521.2 | (448.2 | ) | ||||||||
Net change in
restricted cash
|
151.1 | (21.2 | ) | ||||||||
Net cash flows
provided by (used in) investing activities
|
1,148.3 | (885.7 | ) | ||||||||
Cash Flows
From Financing Activities
|
|||||||||||
Proceeds from
the issuance of term debt
|
1,670.6 | 2,866.0 | |||||||||
Repayments of
term debt
|
(3,854.5 | ) | (4,116.5 | ) | |||||||
Proceeds from
the issuance of FHLB debt
|
5,100.0 | | |||||||||
Repayments of
FHLB debt
|
(4,997.4 | ) | | ||||||||
Net increase in
deposits
|
1,949.2 | 1,957.1 | |||||||||
Collection of
security deposits and maintenance funds
|
234.9 | 246.3 | |||||||||
Use of security
deposits and maintenance funds
|
(127.1 | ) | (129.0 | ) | |||||||
Repurchase of
common stock
|
(531.8 | ) | (658.0 | ) | |||||||
Dividends
paid
|
(84.4 | ) | (67.5 | ) | |||||||
Purchase of
noncontrolling interest
|
(20.5 | ) | | ||||||||
Payments on
affordable housing investment credits
|
(0.2 | ) | | ||||||||
Net cash flows
(used in) provided by financing activities
|
(661.2 | ) | 98.4 | ||||||||
Increase in
unrestricted cash and cash equivalents
|
1,267.9 | 53.8 | |||||||||
Unrestricted
cash and cash equivalents, beginning of period
|
6,155.5 | 5,081.1 | |||||||||
Unrestricted
cash and cash equivalents, end of period
|
$ | 7,423.4 | $ | 5,134.9 | |||||||
Supplementary Cash Flow Disclosure
|
|||||||||||
Interest
paid
|
$ | (866.5 | ) | $ | (850.8 | ) | |||||
Federal,
foreign, state and local income taxes (paid) collected, net
|
$ | (26.4 | ) | $ | (19.0 | ) | |||||
Supplementary Non Cash Flow Disclosure
|
|||||||||||
Transfer of
assets from held for investment to held for sale
|
$ | 2,030.0 | $ | 1,329.6 | |||||||
Transfer of
assets from held for sale to held for investment
|
$ | 93.1 | $ | 52.2 | |||||||
Transfer of
assets from held for sale and held for investment to OREO
|
$ | 26.4 | $ | | |||||||
Issuance of common stock as consideration | $ | 1,462.0 | $ | |
n
|
the length of time that fair value has been below cost; |
n
|
the severity of the impairment or the extent to which fair value has been below cost; |
n
|
the cause of the impairment and the financial condition and the near-term prospects of the issuer; |
n
|
activity in the market of the issuer that may indicate adverse credit conditions; and |
n
|
the Companys ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery. |
n
|
analysis of individual investments that have fair values less than amortized cost, including consideration of the length of time the investment has been in an unrealized loss position and the expected recovery period; |
n
|
discussion of evidential matter, including an evaluation of factors or triggers that could cause individual investments to qualify as having OTTI and those that would not support OTTI; and |
n
|
documentation of the results of these analyses, as required under business policies. |
n
|
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as certain other securities that are highly liquid and are actively traded in over-the-counter markets; |
n
|
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of |
|
the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes derivative contracts and certain loans held-for-sale; | |
n
|
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using valuation models, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes highly structured or long-term derivative contracts and structured finance securities where independent pricing information cannot be obtained for a significant portion of the underlying assets or liabilities. |
n
|
More limited partnerships and similar entities will be evaluated for consolidation under the revised consolidation requirements that apply to VIEs. |
n
|
Fees paid to a decision maker or service provider are less likely to be considered a variable interest in a VIE. |
n
|
Variable interests in a VIE held by related parties of a reporting enterprise are less likely to require the reporting enterprise to consolidate the VIE. |
n
|
There is a new approach for determining whether equity at-risk holders of entities that are not similar to limited partnerships have power to direct the entitys key activities when the entity has an outsourced manager whose fee is a variable interest. |
n
|
The deferral of consolidation requirements for certain investment companies and similar entities of the VIE in ASU 2009-17 is eliminated. |
n
|
A new consolidation analysis is required for VIEs, including many limited partnerships and similar entities that previously were not considered VIEs. |
n
|
It is less likely that the general partner or managing member of limited partnerships and similar entities will be required to consolidate the entity when the other investors in the entity lack both participating rights and kick-out rights. |
n
|
Limited partnerships and similar entities that are not VIEs will not be consolidated by the general partner. |
n
|
It is less likely that decision makers or service providers involved with a VIE will be required to consolidate the VIE. |
n
|
Entities for which decision making rights are conveyed through a contractual arrangement are less likely to be considered VIEs. |
n
|
Reporting enterprises with interests in certain investment companies and similar entities that are considered VIEs will no longer evaluate those entities for consolidation based on majority exposure to variability. |
1.
|
Entities must perform a going concern assessment by evaluating their ability to meet their obligations for a look-forward period of one year from the financial statement issuance date (or date the financial statements are available to be issued). |
2.
|
Disclosures are required if it is probable an entity will be unable to meet its obligations within the look-forward period. Incremental substantial doubt disclosure is required if the probability is not mitigated by managements plans. |
3.
|
Pursuant to the ASU, substantial doubt about an entitys ability to continue as a going concern exists if it is probable that the entity will be unable to meet its obligations as they become due within one year after the date the annual or interim financial statements are issued or available to be issued (assessment date). |
1.
|
Identify the contract with the customer. |
2.
|
Identify the performance obligations in the contract. |
3.
|
Determine the transaction price. |
4.
|
Allocate the transaction price to the performance obligations. |
5.
|
Recognize revenue when or as each performance obligation is satisfied. |
1.
|
The creditor obtains legal title to the residential real estate property. |
2.
|
Completion of a deed in lieu of foreclosure or similar legal agreement under which the borrower conveys all interest in the residential real estate property to the creditor to satisfy that loan. |
n
|
Modifies the conditions that must be met to present the pretax effects and related tax benefits of such investments as a component of income taxes (net within income tax expense). |
n
|
For investments that qualify for net presentation of investment performance, the ASU introduces a proportional amortization method that can be elected, in lieu of the effective yield method, to amortize the investment basis. Under the proportional amortization method an investor amortizes the cost of its investment, in proportion to the tax credits and other tax benefits it receives, to income tax expense. |
n
|
Requires new disclosure for all investors in these projects. |
1.
|
The nature of its investments in affordable housing projects, and |
2.
|
The effect of the measurement of those investments and the related tax credits on its financial statements. |
Consideration and Net Assets Acquired
(dollars in millions)
Purchase
price
|
$ | 3,391.6 | ||||
Recognized
amounts of identifiable assets acquired and (liabilities assumed), at fair value
|
||||||
Cash and
interest bearing deposits
|
$ | 4,411.6 | ||||
Investment
securities
|
1,297.3 | |||||
Assets held for
sale
|
20.4 | |||||
Loans
HFI
|
13,598.3 | |||||
Indemnification
assets
|
480.7 | |||||
Other
assets
|
676.6 | |||||
Assets of
discontinued operation
|
524.4 | |||||
Deposits
|
(14,533.3 | ) | ||||
Borrowings
|
(2,970.3 | ) | ||||
Other
liabilities
|
(221.1 | ) | ||||
Liabilities of
discontinued operation
|
(676.9 | ) | ||||
Total fair value
of identifiable net assets
|
$ | 2,607.7 | ||||
Intangible
assets
|
$ | 185.9 | ||||
Goodwill
|
$ | 598.0 |
n
|
Single Family Residential At the acquisition date, OneWest owned a legacy portfolio of SFR loans that had been acquired by OneWest through various portfolio purchases. The UPB and FV at the acquisition date were $6.2 billion and $4.8 billion, respectively. |
n
|
Non-SFR The Non-SFR loan portfolio consists mainly of commercial real estate loans secured by various property types, including multifamily, retail, office and other. The UPB and FV at the acquisition date were $1.4 billion and $1.2 billion, respectively. |
n
|
Jumbo Mortgages At the acquisition date, OneWest owned a portfolio of recently originated Jumbo Mortgages. The Jumbo Mortgages consist of three different product types: fixed rate, adjustable rate mortgage (ARM) and home equity lines of credit (HELOC). The UPB and FV at the acquisition date were both $1.4 billion. |
n
|
Commercial Real Estate At the acquisition date, OneWest owned a portfolio of recently originated commercial real estate (CRE) loans. The CRE loan portfolio consists of loans secured by various property types, including hotel, multifamily, retail, and other. The UPB and FV at the acquisition date were both $2.0 billion. |
n
|
SBA At the acquisition date, OneWest owned a portfolio of recently originated SBA loans. The SBA loan portfolio primarily consists of loans provided to small business borrowers and guaranteed by the SBA. The UPB and FV at the acquisition date were both $278 million. |
n
|
Repurchased GNMA Loans At the acquisition date, OneWest held a portfolio of loans repurchased from GNMA securitizations under its servicer repurchase program. GNMA allows servicers to repurchase loans from securitization pools after the borrowers have been delinquent for three payments. After repurchase, servicers can work to rehabilitate the loan, and subsequently resell the loan into another GNMA pool. The UPB and FV at the acquisition date were both $78 million. |
n
|
Reverse Mortgages OneWest Bank held a portfolio of jumbo reverse mortgage loans. The reverse mortgage loan portfolio consists of loans made to elderly borrowers in which the bank makes periodic advances to the homeowner, and, in return, at some future point the bank could take custody of the home upon occurrence of a termination event. A termination event includes such events as the death of the homeowner, the relocation of the homeowner, or a refinancing of the mortgage. The UPB and FV at the acquisition date were $1.1 billion and $811 million, respectively. |
n
|
Commercial and Industrial Loans OneWest had recently originated a portfolio of commercial and industrial (C&I) loans. The C&I loan portfolio consists of term loans and lines of credit provided to businesses across different industries. The UPB and FV at the acquisition date were $3.3 billion and $3.1 billion, respectively. |
Discount Rate
|
Severity Rate
|
Prepayment Rate
|
Default Rate
|
||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Product Type
|
Range
|
Weighted
Avg. |
Range
|
Weighted
Avg. |
Range
|
Weighted
Avg. |
Range
|
Weighted
Avg. |
|||||||||||||||||||||||||||
SFR
|
4.6%
12.1%
|
6.9%
|
(1)
|
(1)
|
(1)
|
(1)
|
(1)
|
(1)
|
|||||||||||||||||||||||||||
Non-SFR
|
5.1%
10.0%
|
6.0%
|
36.6%
60.9%
|
45.8%
|
1.0%
6.0%
|
3.4%
|
0.2%
82.4%
|
11.0%
|
|||||||||||||||||||||||||||
Jumbo
Mortgages
|
3.3%
4.2%
|
3.4%
|
0.0%
10.0%
|
2.7%
|
10.0%
18.0%
|
13.9%
|
0.0%
0.2%
|
0.0%
|
|||||||||||||||||||||||||||
Commercial Real
Estate
|
4.2%
5.0%
|
4.5%
|
15.0%
35.0%
|
19.3%
|
1.5%
6.0%
|
4.6%
|
0.6%
14.7%
|
1.4%
|
|||||||||||||||||||||||||||
SBA
|
5.1%
7.3%
|
5.1%
|
25.0%
|
25.0%
|
2.0%
5.0%
|
4.9%
|
3.0%
24.9%
|
3.4%
|
|||||||||||||||||||||||||||
Repurchased
GNMA
|
T +
0.9%
|
2.1%
|
0.0%
13.5%
|
6.4%
|
0.0%
7.3%
|
3.4%
|
0.0%
8.8%
|
4.2%
|
|||||||||||||||||||||||||||
Reverse
Mortgages
|
10.5%
|
10.5%
|
(2)
|
(2)
|
(3)
|
(3)
|
NA
(4)
|
NA
|
|||||||||||||||||||||||||||
C&I
Loans
|
5.3%
8.4%
|
6.0%
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
(1)
|
SFR Severity, Prepayment and Default Rates were based on portfolio historic delinquency migration and loss experience. |
(2)
|
Reverse mortgage severity rates were based on HPI and LTV. |
(3)
|
Reverse mortgage prepayment rates were based on mobility and mortality curves. |
(4)
|
NA means not applicable. |
Intangible Assets
|
Fair Value
|
Estimated Useful Life
|
Amortization Method
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Core deposit
intangibles
|
$ | 126.3 |
7
years
|
Straight
line
|
||||||||||
Trade
names
|
36.4 |
10
years
|
Straight
line
|
|||||||||||
Customer
relationships
|
20.3 |
10
years
|
Accelerated
|
|||||||||||
Other
|
2.9 |
3
years
|
Straight
line
|
|||||||||||
Total
|
$ | 185.9 |
|
|
n
|
Core Deposit Intangibles Certain core deposits were acquired as part of the transaction, which provide an additional source of funds for CIT. The core deposit intangibles represent the costs saved by CIT by acquiring the core deposits and not needing to source the funds elsewhere. This intangible was valued using the income approach: cost savings method. |
n
|
OneWest Trade Name OneWests brand is recognized in the Financial Services industry, as such, OneWests brand name reputation and positive brand recognition embodied in its trade name was valued using the income approach: relief from royalty method. |
n
|
Customer Relationships Certain commercial borrower customer relationships were acquired as part of the transaction. The acquired customer relationships were valued using the income approach: multi-period excess earnings method. |
n
|
Other Relates to certain non-competition agreements which limit specific employees from competing in related businesses of CIT. This intangible was valued using the income approach: with-and-without method. |
n
|
Investment tax credits As of the acquisition date, OneWests most significant tax credit investments were in several funds specializing in the financing and development of low-income housing (LIHTC). Our fair value analysis of the LIHTC investments took into account the ongoing equity installments regularly allocated to the underlying tax credit funds, along with changes to projected tax benefits and the impact this has on future capital contributions. CITs assessment of the investment tax credits primarily consisted of applying discount rates ranging from 4% 6% to projected cash flows. As a result of this analysis, CIT determined that the fair value of the tax credit assets was approximately $114 million (the fair value of associated future funding commitments is separately recorded as a liability at its fair value of $19.3 million). At acquisition, OneWest also held smaller investments in funds promoting film production and renewable energy; these were recorded at their acquisition fair value of approximately $21 million based on CITs consideration of market based indications of value. |
n
|
OREO A portfolio of real estate assets acquired over time as part of the foreclosure process associated with mortgages on real estate. OREO assets primarily include single family residences, and also include land, multi-family, medical office, and condominium units. OREO assets are actively marketed for sale and carried by |
|
OneWest at the lower of its carrying amount or estimated fair value less disposition costs. Estimated fair value is generally based upon broker price opinions and independent appraisals, modified based on assumptions and expectations determined by management. CIT reviewed the OREO carried in Other assets and concluded that the net book value of $132.4 million at the acquisition date was a reasonable approximation of fair value. |
n
|
Property Plant and Equipment The operations of the Company are supported by various property, plant and equipment (PP&E) assets. The PP&E assets broadly include real and personal property used in the normal course of the companys daily operations. CIT considered the income, market, and cost approaches in estimating the fair value of the PP&E. The owned real estate assets were valued under the income approach to derive property level fair value estimates. The underlying assets, including the land, buildings, site improvements, and leases-in-place were discretely valued using the cost and market approaches. Furniture and fixtures were reviewed and it was found that the depreciated book value was a reasonable proxy for fair value. Based on our analysis, the fair value of the PP&E was estimated at $61.4 million. The valuation resulted in a premium of approximately $23.6 million. |
n
|
FDIC Receivable CIT acquired a receivable with the FDIC representing a secured interest in certain homebuilder, home construction and lot loans. The secured interest entitles the Company to 40% of the underlying cash flows. The Company recorded this receivable at its estimated acquisition date fair value of $54.8 million. The fair value was estimated based on cash flows expected to be collected from the Companys participation interest in the underlying collateral. The underlying cash flows include estimated amounts expected to be collected from repayment of loan principal and interest and net proceeds from property liquidations. These cash flows are offset by amounts paid for servicing expenses, management fees, and liquidation expenses. |
Unaudited Pro Forma
(dollars in millions)
For the Nine Months
Ended September 30 |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
||||||||||
Net finance
revenue
|
$ | 2,348.6 | $ | 2,435.6 | |||||||
Net
income
|
$ | 476.8 | $ | 1,534.0 |
Condensed Balance Sheet of Discontinued Operations
(dollars in millions)
September 30,
2015 |
||||||
---|---|---|---|---|---|---|
Net Finance
Receivables
(1)
|
$ | 463.9 | ||||
Other
assets
(2)
|
49.9 | |||||
Assets of
discontinued operations
|
$ | 513.8 | ||||
Secured
borrowings
(1)
|
$ | 454.1 | ||||
Other
liabilities
(3)
|
217.8 | |||||
Liabilities of
discontinued operations
|
$ | 671.9 |
(1)
|
Net finance receivables includes $453.2 million of securitized balances and $10.7 million of additional draws awaiting securitization at September 30, 2015. Secured borrowings relate to those receivables. |
(2)
|
Amount includes servicing advances, servicer receivables and property and equipment, net of accumulated depreciation. |
(3)
|
Other liabilities include contingent liabilities and other accrued liabilities. |
Condensed Statements of Operation
(dollars in millions)
Quarters Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
2015
|
2014
|
||||||||||||||||
Interest
income
(1)
|
$ | 2.2 | $ | | $ | 2.2 | $ | 27.0 | |||||||||||
Interest
expense
(1)
|
(2.3 | ) | | (2.3 | ) | (248.2 | ) | ||||||||||||
Other
income
|
6.1 | | 6.1 | (2.1 | ) | ||||||||||||||
Operating
expenses
(2)
|
(11.8 | ) | | (11.8 | ) | (3.5 | ) | ||||||||||||
Loss from
discontinued operations before provision (benefit) for income taxes
|
(5.8 | ) | | (5.8 | ) | (226.8 | ) | ||||||||||||
Benefit
(provision) for income taxes
(3)
|
2.1 | (0.5 | ) | 2.1 | (2.5 | ) | |||||||||||||
Loss from
discontinued operations, net of taxes
|
(3.7 | ) | (0.5 | ) | (3.7 | ) | (229.3 | ) | |||||||||||
Gain on sale of
discontinued operations
|
| | | 282.8 | |||||||||||||||
Income (loss)
from discontinued operations, net of taxes
|
$ | (3.7 | ) | $ | (0.5 | ) | $ | (3.7 | ) | $ | 53.5 |
(1)
|
Includes amortization for the premium associated with the HECM loans and related secured borrowings for the quarter and nine months ended September 30, 2015. |
(2)
|
For the quarter and nine months ended September 30, 2015, operating expense is comprised of $4.4 million in salaries and benefits, $2.8 million in professional services and $4.6 million for other expenses such as data processing, premises and equipment, legal settlement, and miscellaneous charges. |
(3)
|
The Companys tax rate for discontinued operations is 36.5% for the quarter and nine months ended September 30, 2015. |
Condensed Statement of Cash Flows
(dollars in millions)
Nine Months Ended
September 30, 2015 |
||||||
---|---|---|---|---|---|---|
Net cash flows
used for operations
|
$ | (1.4 | ) | |||
Net cash flows
provided by investing activities
|
9.8 |
September 30, 2015
|
December 31, 2014
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Commercial
Loans
|
$ | 21,860.1 | $ | 14,850.8 | ||||||
Direct financing
leases and leveraged leases
|
3,616.9 | 4,644.2 | ||||||||
Total
commercial
|
25,477.0 | 19,495.0 | ||||||||
Consumer
Loans
|
6,929.2 | | ||||||||
Total finance
receivables
|
32,406.2 | 19,495.0 | ||||||||
Finance
receivables held for sale
|
1,975.0 | 779.9 | ||||||||
Finance
receivables and held for sale receivables
(1)
|
$ | 34,381.2 | $ | 20,274.9 |
(1)
|
Assets held for sale on the Balance Sheet includes finance receivables and operating lease equipment primarily related to portfolios in Canada, China and the U.K. As discussed in subsequent tables, since the Company manages the credit risk and collections of finance receivables held for sale consistently with its finance receivables held for investment, the aggregate amount is presented in this table. |
Finance Receivables
(dollars in millions)
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Domestic
|
Foreign
|
Total
|
Domestic
|
Foreign
|
Total
|
||||||||||||||||||||||
Transportation
& International Finance
|
$ | 713.0 | $ | 2,592.5 | $ | 3,305.5 | $ | 812.6 | $ | 2,746.3 | $ | 3,558.9 | |||||||||||||||
North America
Banking
|
23,090.0 | 411.3 | 23,501.3 | 14,645.1 | 1,290.9 | 15,936.0 | |||||||||||||||||||||
Legacy Consumer
Mortgages
|
5,590.9 | 8.5 | 5,599.4 | | | | |||||||||||||||||||||
Non-Strategic
Portfolios
|
| | | | 0.1 | 0.1 | |||||||||||||||||||||
Total
|
$ | 29,393.9 | $ | 3,012.3 | $ | 32,406.2 | $ | 15,457.7 | $ | 4,037.3 | $ | 19,495.0 |
Components of Net Investment in Finance Receivables
(dollars in millions)
September 30,
2015 |
December 31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Unearned
income
|
$ | (879.6 | ) | $ | (1,037.8 | ) | ||||
Unamortized
(discounts)
|
(25.4 | ) | (22.0 | ) | ||||||
Accretable yield
on PCI loans
|
(1,163.9 | ) | | |||||||
Net unamortized
deferred costs and (fees)
|
40.0 | 48.5 |
n
|
Pass finance receivables in this category do not meet the criteria for classification in one of the categories below. |
n
|
Special mention a special mention asset exhibits potential weaknesses that deserve managements close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects. |
n
|
Classified a classified asset ranges from: (1) assets that exhibit a well-defined weakness and are inadequately protected by the current sound worth and paying capacity of the borrower, and are characterized by the distinct possibility that some loss will be sustained if the deficiencies are not corrected to (2) assets with weaknesses that make collection or liquidation in full unlikely on the basis of current facts, conditions, and values. Assets in this classification can be accruing or on non-accrual depending on the evaluation of these factors. |
Grade: |
Pass
|
Special
Mention |
Classified-
accruing |
Classified-
non-accrual |
PCI Loans
|
Total
|
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2015
|
|||||||||||||||||||||||||||
Transportation & International Finance
|
|||||||||||||||||||||||||||
Aerospace
|
$ | 1,575.4 | $ | 71.5 | $ | 54.0 | $ | 4.7 | $ | | $ | 1,705.6 | |||||||||||||||
Rail
|
126.0 | 1.2 | 1.9 | | | 129.1 | |||||||||||||||||||||
Maritime
Finance
|
1,440.9 | | 69.0 | | | 1,509.9 | |||||||||||||||||||||
International
Finance
|
741.7 | 60.0 | 50.4 | 47.4 | | 899.5 | |||||||||||||||||||||
Total
TIF
|
3,884.0 | 132.7 | 175.3 | 52.1 | | 4,244.1 | |||||||||||||||||||||
North
America Banking
|
|||||||||||||||||||||||||||
Commercial
Banking
|
9,363.6 | 714.0 | 371.7 | 84.6 | 101.0 | 10,634.9 | |||||||||||||||||||||
Equipment
Finance
|
4,289.6 | 321.9 | 129.3 | 67.6 | | 4,808.4 | |||||||||||||||||||||
Commercial Real
Estate
|
4,921.1 | 42.4 | 18.2 | 4.1 | 106.4 | 5,092.2 | |||||||||||||||||||||
Commercial
Services
|
2,072.3 | 315.4 | 168.7 | | | 2,556.4 | |||||||||||||||||||||
Consumer
Banking
|
10.9 | | | | | 10.9 | |||||||||||||||||||||
Total
NAB
|
$ | 20,657.5 | $ | 1,393.7 | $ | 687.9 | $ | 156.3 | $ | 207.4 | $ | 23,102.8 | |||||||||||||||
Non-
Strategic Portfolios
|
$ | 53.4 | $ | 1.8 | $ | 0.5 | $ | 4.5 | $ | | 60.2 | ||||||||||||||||
Total
Commercial
|
$ | 24,594.9 | $ | 1,528.2 | $ | 863.7 | $ | 212.9 | $ | 207.4 | $ | 27,407.1 | |||||||||||||||
December 31,
2014
|
|||||||||||||||||||||||||||
Transportation & International Finance
|
|||||||||||||||||||||||||||
Aerospace
|
$ | 1,742.0 | $ | 11.4 | $ | 43.0 | $ | 0.1 | $ | | $ | 1,796.5 | |||||||||||||||
Rail
|
127.5 | 1.4 | 1.1 | | | 130.0 | |||||||||||||||||||||
Maritime
Finance
|
1,026.4 | | | | | 1,026.4 | |||||||||||||||||||||
International
Finance
|
820.2 | 107.9 | 58.0 | 37.1 | | 1,023.2 | |||||||||||||||||||||
Total
TIF
|
3,716.1 | 120.7 | 102.1 | 37.2 | | 3,976.1 | |||||||||||||||||||||
North
America Banking
|
|||||||||||||||||||||||||||
Commercial
Banking
|
6,199.0 | 561.0 | 121.8 | 30.9 | | 6,912.7 | |||||||||||||||||||||
Equipment
Finance
|
4,129.1 | 337.8 | 180.4 | 70.0 | | 4,717.3 | |||||||||||||||||||||
Commercial Real
Estate
|
1,692.0 | 76.6 | | | | 1,768.6 | |||||||||||||||||||||
Commercial
Services
|
2,084.1 | 278.8 | 197.3 | | | 2,560.2 | |||||||||||||||||||||
Total
NAB
|
$ | 14,104.2 | $ | 1,254.2 | $ | 499.5 | $ | 100.9 | $ | | $ | 15,958.8 | |||||||||||||||
Non-Strategic Portfolios
|
$ | 288.7 | $ | 18.4 | $ | 10.5 | $ | 22.4 | $ | | 340.0 | ||||||||||||||||
Total
Commercial
|
$ | 18,109.0 | $ | 1,393.3 | $ | 612.1 | $ | 160.5 | $ | | $ | 20,274.9 |
Consumer Loan LTV Distributions at September 30, 2015
(dollars in millions)
Single Family Residential
|
Reverse Mortgage
|
|||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Covered Loans
|
Non-covered Loans
|
Covered
Loans |
Non-covered Loans
|
|||||||||||||||||||||||||||||||||||||||
Non- PCI
|
PCI
|
Non- PCI
|
PCI
|
Total
Single Family Residential |
Non- PCI
|
Non- PCI
|
PCI
|
Total
Reverse Mortgages |
Total
Consumer |
|||||||||||||||||||||||||||||||||
Greater than
125%
|
$ | 1.3 | $ | 464.5 | $ | 0.4 | $ | 18.3 | $ | 484.5 | $ | 0.9 | $ | 1.3 | $ | 39.2 | $ | 41.4 | $ | 525.9 | ||||||||||||||||||||||
101%
125%
|
7.7 | 671.8 | 0.2 | 14.4 | 694.1 | 2.1 | 2.8 | 18.0 | 22.9 | 717.0 | ||||||||||||||||||||||||||||||||
80%
100%
|
531.0 | 542.7 | 14.8 | 11.4 | 1,099.9 | 28.1 | 36.0 | 12.9 | 77.0 | 1,176.9 | ||||||||||||||||||||||||||||||||
Less than
80%
|
1,600.4 | 819.6 | 1,315.1 | 10.7 | 3,745.8 | 425.8 | 317.8 | 12.2 | 755.8 | 4,501.6 | ||||||||||||||||||||||||||||||||
Not
Applicable
(1)
|
| | 7.8 | | 7.8 | | | | | 7.8 | ||||||||||||||||||||||||||||||||
Total
|
$ | 2,140.4 | $ | 2,498.6 | $ | 1,338.3 | $ | 54.8 | $ | 6,032.1 | $ | 456.9 | $ | 357.9 | $ | 82.3 | $ | 897.1 | $ | 6,929.2 |
(1)
|
Certain Consumer Loans do not have LTVs, including the Credit Card portfolio. |
Covered Loans
(dollars in millions)
PCI
|
Non-PCI
|
Total
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
LCM loans HFI at
carrying value
|
$ | 2,498.6 | $ | 2,597.3 | $ | 5,095.9 |
Finance and Held for Sale Receivables Delinquency Status
(dollars in millions)
Past Due
|
|||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
3059 Days
Past Due |
6089 Days
Past Due |
90 Days or
Greater |
Total Past
Due |
Current
(1)
|
PCI Loans
(2)
|
Total Finances
Receivable |
|||||||||||||||||||||||||
September 30, 2015
|
|||||||||||||||||||||||||||||||
Transportation & International Finance
|
|||||||||||||||||||||||||||||||
Aerospace
|
$ | | $ | 17.1 | $ | 4.7 | $ | 21.8 | $ | 1,683.8 | $ | | $ | 1,705.6 | |||||||||||||||||
Rail
|
0.7 | 1.3 | 2.4 | 4.4 | 124.7 | | 129.1 | ||||||||||||||||||||||||
Maritime
Finance
|
| | | | 1,509.9 | | 1,509.9 | ||||||||||||||||||||||||
International
Finance
|
18.2 | 10.1 | 24.3 | 52.6 | 846.9 | | 899.5 | ||||||||||||||||||||||||
Total
TIF
|
18.9 | 28.5 | 31.4 | 78.8 | 4,165.3 | | 4,244.1 | ||||||||||||||||||||||||
North America
Banking
|
|||||||||||||||||||||||||||||||
Commercial
Banking
|
0.9 | 9.8 | 13.6 | 24.3 | 10,522.5 | 101.0 | 10,647.8 | ||||||||||||||||||||||||
Equipment
Finance
|
72.8 | 27.6 | 22.2 | 122.6 | 4,685.8 | | 4,808.4 | ||||||||||||||||||||||||
Commercial Real
Estate
|
| | 1.5 | 1.5 | 4,984.3 | 106.4 | 5,092.2 | ||||||||||||||||||||||||
Commercial
Services
|
42.7 | 0.8 | 1.4 | 44.9 | 2,511.5 | | 2,556.4 | ||||||||||||||||||||||||
Consumer
Banking
|
| | 0.4 | 0.4 | 1,335.4 | | 1,335.8 | ||||||||||||||||||||||||
Total
NAB
|
116.4 | 38.2 | 39.1 | 193.7 | 24,039.5 | 207.4 | 24,440.6 | ||||||||||||||||||||||||
Legacy Consumer Mortgages
|
|||||||||||||||||||||||||||||||
Single family
residential mortgages
|
20.6 | 1.3 | 0.8 | 22.7 | 2,147.4 | 2,553.4 | 4,723.5 | ||||||||||||||||||||||||
Reverse
mortgages
|
| | | | 830.5 | 82.3 | 912.8 | ||||||||||||||||||||||||
Total
LCM
|
20.6 | 1.3 | 0.8 | 22.7 | 2,977.9 | 2,635.7 | 5,636.3 | ||||||||||||||||||||||||
Non-Strategic
Portfolios
|
1.3 | 0.4 | 0.5 | 2.2 | 58.0 | | 60.2 | ||||||||||||||||||||||||
Total
|
$ | 157.2 | $ | 68.4 | $ | 71.8 | $ | 297.4 | $ | 31,240.7 | $ | 2,843.1 | $ | 34,381.2 | |||||||||||||||||
December 31, 2014
|
|||||||||||||||||||||||||||||||
Transportation & International Finance
|
|||||||||||||||||||||||||||||||
Aerospace
|
$ | | $ | | $ | 0.1 | $ | 0.1 | $ | 1,796.4 | $ | | $ | 1,796.5 | |||||||||||||||||
Rail
|
5.2 | 1.9 | 4.2 | 11.3 | 118.7 | | 130.0 | ||||||||||||||||||||||||
Maritime
Finance
|
| | | | 1,026.4 | | 1,026.4 | ||||||||||||||||||||||||
International
Finance
|
43.9 | 7.0 | 21.6 | 72.5 | 950.7 | | 1,023.2 | ||||||||||||||||||||||||
Total
TIF
|
49.1 | 8.9 | 25.9 | 83.9 | 3,892.2 | | 3,976.1 | ||||||||||||||||||||||||
North America
Banking
|
|||||||||||||||||||||||||||||||
Commercial
Banking
|
4.4 | | 0.5 | 4.9 | 6,907.8 | | 6,912.7 | ||||||||||||||||||||||||
Equipment
Finance
|
93.7 | 32.9 | 14.9 | 141.5 | 4,575.8 | | 4,717.3 | ||||||||||||||||||||||||
Commercial Real
Estate
|
| | | | 1,768.6 | | 1,768.6 | ||||||||||||||||||||||||
Commercial
Services
|
62.2 | 3.3 | 0.9 | 66.4 | 2,493.8 | | 2,560.2 | ||||||||||||||||||||||||
Total
NAB
|
160.3 | 36.2 | 16.3 | 212.8 | 15,746.0 | | 15,958.8 | ||||||||||||||||||||||||
Non-Strategic
Portfolios
|
16.4 | 6.9 | 9.6 | 32.9 | 307.1 | | 340.0 | ||||||||||||||||||||||||
Total
|
$ | 225.8 | $ | 52.0 | $ | 51.8 | $ | 329.6 | $ | 19,945.3 | $ | | $ | 20,274.9 |
(1)
|
Due to their nature, reverse mortgage loans are included in Current, as they do not have contractual payments due at a specified time. |
(2)
|
PCI loans are written down at acquisition to their fair value using an estimate of cash flows deemed to be collectible. Accordingly, such loans are no longer classified as past due or non-accrual even though they may be contractually past due as we expect to fully collect the new carrying values of these loans. |
Finance Receivables on Non-Accrual Status
(dollars in millions)
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Held for
Investment |
Held for Sale
|
Total
|
Held for
Investment |
Held for Sale
|
Total
|
||||||||||||||||||||||
Transportation & International Finance
|
|||||||||||||||||||||||||||
Aerospace
|
$ | 4.7 | $ | | $ | 4.7 | $ | 0.1 | $ | | $ | 0.1 | |||||||||||||||
International
Finance
|
| 47.4 | 47.4 | 22.4 | 14.7 | 37.1 | |||||||||||||||||||||
Total
TIF
|
4.7 | 47.4 | 52.1 | 22.5 | 14.7 | 37.2 | |||||||||||||||||||||
North America Banking
|
|||||||||||||||||||||||||||
Commercial
Banking
|
83.1 | 1.5 | 84.6 | 30.9 | | 30.9 | |||||||||||||||||||||
Equipment
Finance
|
58.2 | 9.4 | 67.6 | 70.0 | | 70.0 | |||||||||||||||||||||
Commercial Real
Estate
|
4.1 | | 4.1 | | | | |||||||||||||||||||||
Total
NAB
|
145.4 | 10.9 | 156.3 | 100.9 | | 100.9 | |||||||||||||||||||||
Legacy
Consumer Mortgages
|
|||||||||||||||||||||||||||
Single family
residential mortgages
|
1.4 | 0.4 | 1.8 | | | | |||||||||||||||||||||
Total
LCM
|
1.4 | 0.4 | 1.8 | | | | |||||||||||||||||||||
Non-Strategic
Portfolios
|
| 4.5 | 4.5 | | 22.4 | 22.4 | |||||||||||||||||||||
Total
|
$ | 151.5 | $ | 63.2 | $ | 214.7 | $ | 123.4 | $ | 37.1 | $ | 160.5 | |||||||||||||||
OREO and
Repossessed assets
|
127.9 | 0.8 | |||||||||||||||||||||||||
Total
non-performing assets
|
$ | 342.6 | $ | 161.3 | |||||||||||||||||||||||
Commercial loans
past due 90 days or more accruing
|
$ | 9.8 | 10.3 | ||||||||||||||||||||||||
Consumer loans
past due 90 days or more accruing
|
0.8 | | |||||||||||||||||||||||||
Total Accruing
loans past due 90 days or more
|
$ | 10.6 | $ | 10.3 |
Loans in Process of Foreclosure
(dollars in millions)
September 30,
2015 |
||||||
---|---|---|---|---|---|---|
PCI
|
$ | 350.7 | ||||
Non-PCI
|
84.4 | |||||
Loans in process of foreclosure
|
$ | 435.1 | ||||
OREO
|
$ | 122.0 |
Impaired Loans
(dollars in millions)
Recorded
Investment |
Unpaid
Principal Balance |
Related
Allowance |
Average
Recorded Investment (3) |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2015
(2)
|
|||||||||||||||||||
With no
related allowance recorded:
|
|||||||||||||||||||
Transportation & International Finance
|
|||||||||||||||||||
International
Finance
|
$ | | $ | | $ | | $ | 6.5 | |||||||||||
North America Banking
|
|||||||||||||||||||
Commercial
Banking
|
14.8 | 18.4 | | 4.3 | |||||||||||||||
Equipment
Finance
|
2.7 | 5.5 | | 4.4 | |||||||||||||||
Commercial Real
Estate
|
3.3 | 3.3 | | 0.8 | |||||||||||||||
Commercial
Services
|
4.0 | 4.0 | | 4.0 | |||||||||||||||
With an
allowance recorded:
|
|||||||||||||||||||
Transportation & International Finance
|
|||||||||||||||||||
Aerospace
|
4.7 | 4.7 | 0.9 | 2.4 | |||||||||||||||
International
Finance
|
| | | 9.1 | |||||||||||||||
North America
Banking
|
|||||||||||||||||||
Commercial
Banking
|
65.1 | 84.0 | 14.4 | 40.8 | |||||||||||||||
Equipment
Finance
|
7.6 | 9.7 | 3.0 | 4.3 | |||||||||||||||
Total Impaired
Loans
(1)
|
$ | 102.2 | $ | 129.6 | $ | 18.3 | $ | 76.6 | |||||||||||
December 31,
2014
|
|||||||||||||||||||
With no related allowance recorded:
|
|||||||||||||||||||
International
Finance
|
$ | 10.2 | $ | 17.0 | $ | | $ | 10.1 | |||||||||||
Commercial
Banking
|
1.2 | 1.2 | | 104.9 | |||||||||||||||
Equipment
Finance
|
5.6 | 6.8 | | 5.8 | |||||||||||||||
Commercial
Services
|
4.2 | 4.2 | | 6.9 | |||||||||||||||
Non-Strategic
Portfolios
|
| | | 3.4 | |||||||||||||||
With an allowance recorded:
|
|||||||||||||||||||
Aerospace
|
| | | 9.0 | |||||||||||||||
International
Finance
|
6.0 | 6.0 | 1.0 | 3.4 | |||||||||||||||
Commercial
Banking
|
29.6 | 34.3 | 11.4 | 43.5 | |||||||||||||||
Equipment
Finance
|
| | | 0.8 | |||||||||||||||
Commercial
Services
|
| | | 2.8 | |||||||||||||||
Total Impaired
Loans
(1)
|
56.8 | 69.5 | 12.4 | 190.6 | |||||||||||||||
Total Loans
Impaired at Convenience Date
(2)
|
1.2 | 15.8 | 0.5 | 26.4 | |||||||||||||||
Total
|
$ | 58.0 | $ | 85.3 | $ | 12.9 | $ | 217.0 |
(1)
|
Interest income recorded for the nine months ended September 30, 2015 and the year ended December 31, 2014 while the loans were impaired was $0.8 million and $10.1 million, respectively of which $0.1 million and $0.7 million was interest recognized using the cash-basis method of accounting. |
(2)
|
Details of finance receivables that were identified as impaired at the Acquisition Date are presented under Loans Acquired with Deteriorated Credit Quality. Loans impaired at the Convenience Date were insignificant as of September 30, 2015. |
(3)
|
Average recorded investment for the nine months ended September 30, 2015 and year ended December 31, 2015. |
n
|
Instances where the primary source of payment is no longer sufficient to repay the loan in accordance with terms of the loan document; |
n
|
Lack of current financial data related to the borrower or guarantor; |
n
|
Delinquency status of the loan; |
n
|
Borrowers experiencing problems, such as operating losses, marginal working capital, inadequate cash flow, excessive financial leverage or business interruptions; |
n
|
Loans secured by collateral that is not readily marketable or that has experienced or is susceptible to deterioration in realizable value; and |
n
|
Loans to borrowers in industries or countries experiencing severe economic instability. |
n
|
Orderly liquidation value is the basis for collateral valuation; |
n
|
Appraisals are updated annually or more often as market conditions warrant; and |
n
|
Appraisal values are discounted in the determination of impairment if the: |
n
|
appraisal does not reflect current market conditions; or |
n
|
collateral consists of inventory, accounts receivable, or other forms of collateral that may become difficult to locate, collect or subject to pilferage in a liquidation. |
Purchased Credit Impaired Loans at September 30, 2015
(dollars in millions)
(1)
Unpaid Principal
Balance |
Carrying Value
|
Allowance for
Loan Losses |
|||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
North America Banking
|
|||||||||||||||
Commercial
Banking
|
$ | 149.1 | $ | 101.0 | $ | | |||||||||
Commercial Real
Estate
|
184.7 | 106.4 | | ||||||||||||
Legacy Consumer Mortgages
|
|||||||||||||||
Single family
residential mortgages
|
3,730.4 | 2,553.4 | | ||||||||||||
Reverse
mortgages
|
96.4 | 82.3 | 0.4 | ||||||||||||
|
$ | 4,160.6 | $ | 2,843.1 | $ | 0.4 |
(1)
|
PCI loans from prior transactions were not significant and are not included. |
September 30, 2015
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(dollars in millions) |
Non-criticized
|
Criticized
|
Total
|
||||||||||||
Commercial
Banking
|
$ | 21.7 | $ | 79.3 | $ | 101.0 | |||||||||
Commercial Real
Estate
|
32.0 | 74.4 | 106.4 | ||||||||||||
|
$ | 53.7 | $ | 153.7 | $ | 207.4 |
PCI Loans at Acquisition Date
(dollars in millions)
Consumer
|
Commercial
|
Total
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Contractually
required payments, including interest
|
$ | 6,880.5 | $ | 433.1 | $ | 7,313.6 | ||||||||
Less:
Non-accretable difference
|
(3,005.7 | ) | (188.8 | ) | (3,194.5 | ) | ||||||||
Cash flows
expected to be collected
(1)
|
3,874.8 | 244.3 | 4,119.1 | |||||||||||
Less: Accretable
yield
|
(1,170.1 | ) | (31.7 | ) | (1,201.8 | ) | ||||||||
Fair value of
loans acquired at acquisition date
|
$ | 2,704.7 | $ | 212.6 | $ | 2,917.3 |
(1)
|
Represents undiscounted expected principal and interest cash flows at acquisition. |
(dollars in millions) |
Accretable
Yield |
|||||
---|---|---|---|---|---|---|
Balance at August 3,
2015
|
$ | 1,201.8 | ||||
Accretion into
interest income
|
(32.1 | ) | ||||
Reclassification
from nonaccretable difference for loans due to improving cash flows
|
0.1 | |||||
Disposals and
other
|
(5.9 | ) | ||||
Balance
at September 30, 2015
|
$ | 1,163.9 |
n
|
Borrower is in default with CIT or other material creditor |
n
|
Borrower has declared bankruptcy |
n
|
Growing doubt about the borrowers ability to continue as a going concern |
n
|
Borrower has (or is expected to have) insufficient cash flow to service debt |
n
|
Borrower is de-listing securities |
n
|
Borrowers inability to obtain funds from other sources |
n
|
Breach of financial covenants by the borrower. |
n
|
Assets used to satisfy debt are less than CITs recorded investment in the receivable |
n
|
Modification of terms interest rate changed to below market rate |
n
|
Maturity date extension at an interest rate less than market rate |
n
|
The borrower does not otherwise have access to funding for debt with similar risk characteristics in the market at the restructured rate and terms |
n
|
Capitalization of interest |
n
|
Increase in interest reserves |
n
|
Conversion of credit to Payment-In-Kind (PIK) |
n
|
Delaying principal and/or interest for a period of three months or more |
n
|
Partial forgiveness of the balance. |
n
|
The nature of modifications qualifying as TDRs based upon recorded investment at September 30, 2015 was comprised of payment deferrals for 19% and covenant relief and/or other for 81%. December 31, 2014 TDR recorded investment was comprised of payment deferrals for 35% and covenant relief and/or other for 65%. |
n
|
Payment deferrals result in lower net present value of cash flows, if not accompanied by additional interest or fees, and increased provision for credit losses to the extent applicable. The financial impact of these modifications is not significant given the moderate length of deferral periods; |
n
|
Interest rate reductions result in lower amounts of interest being charged to the customer, but are a relatively small part of the Companys restructuring programs. Additionally, in some instances, modifications improve the Companys economic return through increased interest rates and fees, but are reported as TDRs due to assessments regarding the borrowers ability to independently obtain similar funding in the market and assessments of the relationship between modified rates and terms and comparable market rates and terms. The weighted average change in interest rates for all TDRs occurring during the quarters ended September 30, 2015 and 2014 was not significant; |
n
|
Debt forgiveness, or the reduction in amount owed by borrower, results in incremental provision for credit losses, in the form of higher charge-offs. While these types of modifications have the greatest individual impact on the allowance, the amounts of principal forgiveness for TDRs occurring during quarters ended September 30, 2015 and 2014 was not significant, as debt forgiveness is a relatively small component of the Companys modification programs; and |
n
|
The other elements of the Companys modification programs that are not TDRs, do not have a significant impact on financial results given their relative size, or do not have a direct financial impact, as in the case of covenant changes. |
1)
|
Move-out rates We used the actuarial estimates of contract termination using the Society of Actuaries mortality tables, adjusted for expected prepayments and relocations. |
2)
|
Home Price Appreciation Consistent with other projections from various market sources, we use the Moodys baseline forecast at a regional level to estimate home price appreciation on a loan-level basis. |
3)
|
Internal Rate of Return The internal rate of return (IRR) is the effective yield required on the life of the portfolio to reduce the net investment to zero at the time the final reverse mortgage contract is liquidated. |
Estimated Future Advances to Reverse Mortgagors
(dollars in millions)
Year
Ending:
|
|||||||
Remaining in
2015
|
$ | 6.1 | |||||
2016
|
21.4 | ||||||
2017
|
17.2 | ||||||
2018
|
13.8 | ||||||
2019
|
10.9 | ||||||
Years 2020 2024
|
28.1 | ||||||
Years
2025 2034
|
9.4 | ||||||
Thereafter
|
0.4 | ||||||
Total
(1), (2)
|
$ | 107.3 |
(1)
|
This table does not take into consideration cash inflows including payments from mortgagors or payoffs based on contractual terms. |
(2)
|
This table includes the reverse mortgages supported by the Company as a result of the IndyMac loss-share agreement with the FDIC. As of September 30, 2015, the Company is responsible for funding up to a remaining $47 million of the total amount. Refer to the Indemnification Asset footnote, for more information on this agreement and the Companys responsibilities toward this reverse mortgage portfolio. |
Transportation
& International Finance |
North
America Banking |
Legacy
Consumer Mortgages |
Non-Strategic
Portfolios |
Corporate
and Other |
Total
|
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quarter Ended September 30, 2015
|
|||||||||||||||||||||||||||
Balance
June 30, 2015
|
$ | 58.0 | $ | 292.9 | $ | | $ | | $ | | $ | 350.9 | |||||||||||||||
Provision for
credit losses
|
1.5 | 46.9 | 1.5 | | | 49.9 | |||||||||||||||||||||
Other
(1)
|
(0.5 | ) | (4.1 | ) | 0.1 | | | (4.5 | ) | ||||||||||||||||||
Gross
charge-offs
(2)
|
(28.3 | ) | (37.6 | ) | (1.5 | ) | | | (67.4 | ) | |||||||||||||||||
Recoveries
|
1.1 | 4.7 | 0.3 | | | 6.1 | |||||||||||||||||||||
Balance
September 30, 2015
|
$ | 31.8 | $ | 302.8 | $ | 0.4 | $ | | $ | | $ | 335.0 | |||||||||||||||
Nine Months Ended September 30, 2015
|
|||||||||||||||||||||||||||
Balance
December 31, 2014
|
$ | 46.8 | $ | 299.6 | $ | | $ | | $ | | $ | 346.4 | |||||||||||||||
Provision for
credit losses
|
11.7 | 89.7 | 1.5 | | | 102.9 | |||||||||||||||||||||
Other
(1)
|
(0.7 | ) | (8.0 | ) | 0.1 | | | (8.6 | ) | ||||||||||||||||||
Gross
charge-offs
(2)
|
(34.4 | ) | (92.3 | ) | (1.5 | ) | | | (128.2 | ) | |||||||||||||||||
Recoveries
|
8.4 | 13.8 | 0.3 | | | 22.5 | |||||||||||||||||||||
Balance
September 30, 2015
|
$ | 31.8 | $ | 302.8 | $ | 0.4 | $ | | $ | | $ | 335.0 | |||||||||||||||
Allowance balance at September 30, 2015
|
|||||||||||||||||||||||||||
Loans
individually evaluated for impairment
|
$ | 0.9 | $ | 17.4 | $ | | $ | | $ | | $ | 18.3 | |||||||||||||||
Loans
collectively evaluated for impairment
|
30.9 | 285.4 | | | | 316.3 | |||||||||||||||||||||
Loans acquired
with deteriorated credit quality
(3)
|
| | 0.4 | | | 0.4 | |||||||||||||||||||||
Allowance for
loan losses
|
$ | 31.8 | $ | 302.8 | $ | 0.4 | $ | | $ | | $ | 335.0 | |||||||||||||||
Other
reserves
(1)
|
$ | | $ | 40.8 | $ | | $ | | $ | | $ | 40.8 | |||||||||||||||
Finance receivables at September 30, 2015
|
|||||||||||||||||||||||||||
Loans
individually evaluated for impairment
|
$ | 4.7 | $ | 97.5 | $ | | $ | | $ | | $ | 102.2 | |||||||||||||||
Loans
collectively evaluated for impairment
|
3,300.8 | 23,196.4 | 2,963.7 | | | 29,460.9 | |||||||||||||||||||||
Loans acquired
with deteriorated credit quality
(3)
|
| 207.4 | 2,635.7 | | | 2,843.1 | |||||||||||||||||||||
Ending
balance
|
$ | 3,305.5 | $ | 23,501.3 | $ | 5,599.4 | $ | | $ | | $ | 32,406.2 | |||||||||||||||
Percent of
loans to total loans
|
10.2 | % | 72.5 | % | 17.3 | % | | | 100 | % |
Transportation
& International Finance |
North
America Banking |
Legacy
Consumer Mortgages |
Non-Strategic
Portfolios |
Corporate
and Other |
Total
|
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quarter Ended September 30, 2014 | |||||||||||||||||||||||||||
Balance June 30, 2014 | $ | 39.7 | $ | 301.3 | $ | | $ | | $ | | $ | 341.0 | |||||||||||||||
Provision for credit losses | 9.1 | 29.7 | | (0.7 | ) | 0.1 | 38.2 | ||||||||||||||||||||
Other (1) | 1.6 | (3.8 | ) | | | (0.1 | ) | (2.3 | ) | ||||||||||||||||||
Gross charge-offs (2) | (4.5 | ) | (20.7 | ) | | | | (25.2 | ) | ||||||||||||||||||
Recoveries | 0.6 | 4.7 | | 0.7 | | 6.0 | |||||||||||||||||||||
Balance September 30, 2014 | $ | 46.5 | $ | 311.2 | $ | | $ | | $ | | $ | 357.7 | |||||||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||||||||||||
Balance December 31, 2013 | $ | 46.7 | $ | 303.8 | $ | | $ | 5.6 | $ | | $ | 356.1 | |||||||||||||||
Provision for credit losses | 29.8 | 55.5 | | (0.4 | ) | 0.2 | 85.1 | ||||||||||||||||||||
Other (1) | | (7.3 | ) | | | (0.2 | ) | (7.5 | ) | ||||||||||||||||||
Gross charge-offs (2) | (34.7 | ) | (56.5 | ) | | (7.5 | ) | | (98.7 | ) | |||||||||||||||||
Recoveries | 4.7 | 15.7 | | 2.3 | | 22.7 | |||||||||||||||||||||
Balance September 30, 2014 | $ | 46.5 | $ | 311.2 | $ | | $ | | $ | | $ | 357.7 | |||||||||||||||
Allowance balance at September 30, 2014 | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 2.7 | $ | 22.8 | $ | | $ | | $ | | $ | 25.5 | |||||||||||||||
Loans collectively evaluated for impairment | 43.8 | 287.9 | | | | 331.7 | |||||||||||||||||||||
Loans acquired with deteriorated credit quality (3) | | 0.5 | | | | 0.5 | |||||||||||||||||||||
Allowance for loan losses | $ | 46.5 | $ | 311.2 | $ | | $ | | $ | | $ | 357.7 | |||||||||||||||
Other reserves (1) | $ | 0.3 | $ | 33.3 | $ | | $ | 0.1 | $ | | $ | 33.7 | |||||||||||||||
Finance receivables at September 30, 2014 | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 23.1 | $ | 192.7 | $ | | $ | | $ | | $ | 215.8 | |||||||||||||||
Loans collectively evaluated for impairment | 3,664.6 | 15,904.1 | | 0.1 | | 19,568.8 | |||||||||||||||||||||
Loans acquired with deteriorated credit quality (3) | | 1.2 | | | | 1.2 | |||||||||||||||||||||
Ending balance | $ | 3,687.7 | $ | 16,098.0 | $ | | $ | 0.1 | $ | | $ | 19,785.8 | |||||||||||||||
Percent of loans to total loans | 18.6 | % | 81.4 | % | | | | 100.0 | % | ||||||||||||||||||
Allowance balance at December 31, 2014 | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 1.0 | $ | 11.4 | $ | | $ | | $ | | $ | 12.4 | |||||||||||||||
Loans collectively evaluated for impairment | 45.8 | 287.7 | | | | 333.5 | |||||||||||||||||||||
Loans acquired with deteriorated credit quality (3) | | 0.5 | | | | 0.5 | |||||||||||||||||||||
Allowance for loan losses | $ | 46.8 | $ | 299.6 | $ | | $ | | $ | | $ | 346.4 | |||||||||||||||
Other reserves (1) | $ | 0.3 | $ | 35.1 | $ | | $ | | $ | | $ | 35.4 | |||||||||||||||
Finance receivables at December 31, 2014 | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 17.6 | $ | 40.6 | $ | | $ | | $ | | $ | 58.2 | |||||||||||||||
Loans collectively evaluated for impairment | 3,541.3 | 15,894.2 | | 0.1 | | 19,435.6 | |||||||||||||||||||||
Loans acquired with deteriorated credit quality (3) | | 1.2 | | | | 1.2 | |||||||||||||||||||||
Ending balance | $ | 3,558.9 | $ | 15,936.0 | $ | | $ | 0.1 | $ | | $ | 19,495.0 | |||||||||||||||
Percent of loans to total loans | 18.3 | % | 81.7 | % | | | | 100 | % |
(1)
|
Other reserves represents additional credit loss reserves for unfunded lending commitments, letters of credit and for deferred purchase agreements, all of which is recorded in Other liabilities. Other also includes changes relating to loans that were charged off and reimbursed by the FDIC under the indemnification provided by the FDIC, sales and foreign currency translations. |
(2)
|
Gross charge-offs of amounts specifically reserved in prior periods included $12 million and $17 million charged directly to the Allowance for loan losses for the quarter and year to date September 2015, respectively. For the year to date period, $12.2 million related to NAB and $5 million to TIF. Gross charge-offs included $13 million charged directly to the Allowance for loan losses for the year ended December 31, 2014, all of which related to NAB. |
(3)
|
Represents loans considered impaired as part of the OneWest transaction and are accounted for under the guidance in ASC 310-30 (Loans and Debt Securities Acquired with Deteriorated Credit Quality). |
August 3, 2015
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Range of Value
|
|||||||||||||||
(dollars in millions) |
Fair Value
|
Low
|
High
|
||||||||||||
IndyMac
Transaction
|
$ | 480.0 | $ | | $ | 4,596.8 | |||||||||
La Jolla
Transaction
|
0.7 | | 85.3 | ||||||||||||
|
$ | 480.7 | $ | | $ | 4,682.1 |
September 30, 2015
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(dollars in millions) |
IndyMac
Transaction |
La Jolla
Transaction |
Total
|
||||||||||||
Loan
indemnification
|
$ | 385.9 | $ | 0.7 | $ | 386.6 | |||||||||
Reverse mortgage
indemnification
|
10.7 | | 10.7 | ||||||||||||
Agency claims
indemnification
|
67.7 | | 67.7 | ||||||||||||
Total
|
$ | 464.3 | $ | 0.7 | $ | 465.0 |
Loss Threshold
|
FDIC Loss
Percentage |
CIT Loss
Percentage |
Comments
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
First Loss
Tranche
|
0%
|
100%
|
The
first $2.551 billion (First Loss Tranche) of losses based on the unpaid principal balances as of the transaction date are borne entirely by the Company
without reimbursement from the FDIC.
|
|||||||||||
Under Stated
Threshold
|
80%
|
20%
|
Losses based on the unpaid principal balances as of the transaction date in excess of the First Loss Tranche but less than $3.826 billion
(Stated Threshold) are reimbursed 80% by the FDIC with the remaining 20% borne by the Company.
|
|||||||||||
Meets or
Exceeds
Stated Threshold |
95%
|
5%
|
Losses based on the unpaid principal balances as of the transaction date that equal or exceed $3.826 billion (Stated Threshold) are reimbursed
95% by the FDIC with the remaining 5% borne by the Company.
|
Submission of Qualifying Losses for Reimbursements
(dollars in millions)
September 30,
2015 |
||||||
---|---|---|---|---|---|---|
Unpaid principal
balance
|
$ | 4,513.6 | ||||
Cumulative losses
incurred
|
3,586.9 | |||||
Cumulative
claims
|
3,573.1 | |||||
Cumulative
reimbursement
|
784.3 |
n
|
The FDIC indemnifies the Company up to March 31, 2014 for third party claims made by Fannie Mae or Freddie Mac relating to any liabilities or obligations imposed on the seller of mortgage loans with respect to mortgage loans acquired by Fannie Mae or Freddie Mac from IndyMac. This indemnification was in addition to the contractual protections provided by both Fannie Mae and Freddie Mac, through the respective servicing transfer agreements executed upon the FDICs sale of such mortgage servicing rights to OneWest Bank. Under these contracts, each of the GSEs agreed to not enforce any such claims arising from breaches that would otherwise be imposed on the seller of such mortgage loans. |
n
|
The FDIC indemnifies the Company up to March 31, 2014 for third party claims made by GNMA, relating to any liabilities or obligations imposed on the seller of mortgage loans with respect to mortgage loans acquired by GNMA from IndyMac. |
n
|
The FDIC indemnifies the Company for third party claims from the Agencies or others arising from certain servicing errors of IndyMac commenced within two years from March 2009 or three years from March 2009 if the claim was brought by FHLB. |
Loss Threshold
|
FDIC Loss
Percentage |
CIT Loss
Percentage |
Comments
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
First Loss
Tranche
|
0%
|
100%
|
The
first $932 million (First Loss Tranche) of losses based on the unpaid principal balances as of the transaction date are borne entirely by the Company
without reimbursement from the FDIC.
|
|||||||||||
Under Stated
Threshold
|
80%
|
20%
|
Losses based on the unpaid principal balances as of the transaction date in excess of the First Loss Tranche but less than $1.532 billion
(Stated Threshold) are reimbursed 80% by the FDIC with the remaining 20% borne by the Company.
|
|||||||||||
Meets or
Exceeds
Stated Threshold |
95%
|
5%
|
Losses based on the unpaid principal balances as of the transaction date that equal or exceed $1.532 billion (Stated Threshold) are reimbursed
95% by the FDIC with the remaining 5% borne by the Company.
|
Submission of Qualifying Losses for Reimbursement
(dollars in millions)
September 30, 2015
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SFR
|
Commercial
|
Total
|
|||||||||||||
Unpaid principal
balance
|
$ | 1,508.4 | $ | (1) | $ | 1,508.4 | |||||||||
Cumulative losses
incurred
|
405.2 | 9.0 | 414.2 | ||||||||||||
Cumulative claims
submissions
|
404.6 | 9.0 | 413.6 |
(1)
|
Due to the expiration of the loss share agreement covering commercial loans in December 2014, the outstanding unpaid principal balance eligible for reimbursement is zero. |
Loss Threshold
|
FDIC Loss
Percentage |
CIT Loss
Percentage |
Comments
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Under Stated
Threshold |
80%
|
20%
|
Losses based on unpaid principal balance up to the Stated Threshold ($1.007 billion) are reimbursed 80% by the FDIC with the remaining 20%
borne by the Company.
|
|||||||||||
Meets or
Exceeds
Stated Threshold |
95%
|
5%
|
Losses based on unpaid principal balance at or in excess of the Stated Threshold ($1.007 billion) are reimbursed 95% by the FDIC with the
remaining 5% borne by the Company.
|
Submission of Qualifying Losses for Reimbursement
(dollars in millions)
September 30, 2015
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SFR
|
Commercial
|
Total
|
|||||||||||||
Unpaid principal
balance
|
$ | 103.9 | $ | (1) | $ | 103.9 | |||||||||
Cumulative losses
incurred
(2)
|
56.2 | 359.5 | 415.7 | ||||||||||||
Cumulative claims
submissions
(2)
|
56.8 | 359.7 | 416.5 | ||||||||||||
Cumulative
reimbursement
|
45.4 | 287.8 | 333.2 |
(1)
|
Due to the expiration of the loss share agreement covering commercial loans in March 2015, the outstanding unpaid principal balance eligible for reimbursement is zero. |
(2)
|
The cumulative claims submissions are higher than the cumulative losses incurred due to recoveries in September 2015 that were not reflected in the claim submissions until the following month. |
Investment Securities
(dollars in millions)
September 30,
2015 |
December 31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Available-for-sale securities
|
||||||||||
Debt
securities
|
$ | 3,001.3 | $ | 1,116.5 | ||||||
Equity
securities
|
14.3 | 14.0 | ||||||||
Held-to-maturity
securities
|
||||||||||
Debt
securities
(1)
|
310.7 | 352.3 | ||||||||
Non-marketable
investments
(2)
|
292.5 | 67.5 | ||||||||
Total investment
securities
|
$ | 3,618.8 | $ | 1,550.3 |
(1)
|
Recorded at amortized cost. |
(2)
|
Non-marketable investments include securities of the FRB and FHLB carried at cost of $263.8 million at September 30, 2015 and $15.2 million at December 31, 2014. The remaining non-marketable investments include ownership interests greater than 3% in limited partnership investments that are accounted for under the equity method, other investments carried at cost, which include qualified Community Reinvestment Act (CRA) investments, equity fund holdings and shares issued by customers during loan work out situations or as part of an original loan investment, totaling $28.7 million and $52.3 million in September 30, 2015 and December 31, 2014, respectively. |
Interest and Dividend Income
(dollars in millions)
Quarters Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
2015
|
2014
|
||||||||||||||||
Interest income
interest bearing deposits
|
$ | 4.5 | $ | 4.4 | $ | 11.9 | $ | 13.5 | |||||||||||
Interest income
investments/reverse repos
|
15.0 | 3.6 | 24.2 | 10.0 | |||||||||||||||
Dividends
investments
|
4.0 | 0.4 | 5.0 | 2.1 | |||||||||||||||
Interest and
dividends on interest bearing deposits and investments
|
$ | 23.5 | $ | 8.4 | $ | 41.1 | $ | 25.6 |
Amortized
Cost |
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2015
|
|||||||||||||||||||
Debt securities
AFS
|
|||||||||||||||||||
Mortgage-backed Securities
|
|||||||||||||||||||
U.S.
government agency securities
|
$ | 1,147.5 | $ | 1.4 | $ | (0.1 | ) | $ | 1,148.8 | ||||||||||
Non-agency
securities
|
963.4 | 0.6 | (11.5 | ) | 952.5 | ||||||||||||||
U.S. Treasury
securities
|
300.0 | | | 300.0 | |||||||||||||||
Supranational
and foreign government securities
|
600.0 | | | 600.0 | |||||||||||||||
Total debt
securities AFS
|
3,010.9 | 2.0 | (11.6 | ) | 3,001.3 | ||||||||||||||
Equity
securities AFS
|
14.3 | 0.2 | (0.2 | ) | 14.3 | ||||||||||||||
Total securities
AFS
|
$ | 3,025.2 | $ | 2.2 | $ | (11.8 | ) | $ | 3,015.6 | ||||||||||
December 31, 2014
|
|||||||||||||||||||
Debt securities
AFS
|
|||||||||||||||||||
U.S. Treasury
securities
|
$ | 200.0 | $ | | $ | | $ | 200.0 | |||||||||||
U.S.
government agency securities
|
904.2 | | | 904.2 | |||||||||||||||
Supranational
and foreign government securities
|
12.3 | | | 12.3 | |||||||||||||||
Total debt
securities AFS
|
1,116.5 | | | 1,116.5 | |||||||||||||||
Equity
securities AFS
|
14.0 | 0.2 | (0.2 | ) | 14.0 | ||||||||||||||
Total securities
AFS
|
$ | 1,130.5 | $ | 0.2 | $ | (0.2 | ) | $ | 1,130.5 |
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost
|
Fair Value
|
Amortized Cost
|
Fair Value
|
||||||||||||||||
Mortgage-backed securities U.S. government
agency securities |
|||||||||||||||||||
Due within 1
year
|
$ | | $ | | $ | 904.2 | $ | 904.2 | |||||||||||
After 1 but
within 5 years
|
996.6 | 997.4 | | | |||||||||||||||
Due after 10
years
|
150.9 | 151.4 | | | |||||||||||||||
Total
|
1,147.5 | 1,148.8 | 904.2 | 904.2 | |||||||||||||||
Mortgage-backed securities non-agency securities
|
|||||||||||||||||||
After 5 but
within 10 years
|
$ | 29.0 | $ | 28.5 | $ | | $ | | |||||||||||
Due after 10
years
|
934.4 | 924.0 | | | |||||||||||||||
Total
|
963.4 | 952.5 | | | |||||||||||||||
U.S. Treasury
securities
|
|||||||||||||||||||
Due within 1
year
|
$ | 300.0 | $ | 300.0 | $ | 200.0 | $ | 200.0 | |||||||||||
Total
|
300.0 | 300.0 | 200.0 | 200.0 | |||||||||||||||
Supranational
and foreign government securities
|
|||||||||||||||||||
Due within 1
year
|
$ | 600.0 | $ | 600.0 | $ | 12.3 | $ | 12.3 | |||||||||||
Total
|
600.0 | 600.0 | 12.3 | 12.3 | |||||||||||||||
Total debt
securities available-for-sale
|
$ | 3,010.9 | $ | 3,001.3 | $ | 1,116.5 | $ | 1,116.5 |
Estimated Unrealized Losses
(dollars in millions)
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than 12 months
|
Less than 12 months
|
||||||||||||||||||
Fair
Value |
Gross
Unrealized Loss |
Fair
Value |
Gross
Unrealized Loss |
||||||||||||||||
Debt securities
AFS
|
|||||||||||||||||||
Mortgage-backed securities
|
|||||||||||||||||||
U.S.
government agency securities
|
$ | 176.6 | $ | (0.1 | ) | $ | | $ | | ||||||||||
Non-agency
securities
|
921.3 | (11.5 | ) | | | ||||||||||||||
Total debt
securities AFS
|
1,097.9 | (11.6 | ) | | | ||||||||||||||
Equity
securities AFS
|
0.2 | (0.2 | ) | 0.2 | (0.2 | ) | |||||||||||||
Total
securities available-for-sale
|
$ | 1,098.1 | $ | (11.8 | ) | $ | 0.2 | $ | (0.2 | ) |
PCI AFS Securities at Acquisition Date
(dollars in millions)
Total
|
||||||
---|---|---|---|---|---|---|
Contractually
required payments, including interest
|
$ | 1,631.8 | ||||
Less:
Non-accretable difference
|
(351.3 | ) | ||||
Cash flows
expected to be collected
(1)
|
1,280.5 | |||||
Less: Accretable
yield
|
(298.4 | ) | ||||
Fair value of
securities acquired at acquisition date
|
$ | 982.1 |
(1)
|
Represents undiscounted expected principal and interest cash flows at acquisition. |
Changes in Accretable Yield
(dollars in millions)
Total
|
||||||
---|---|---|---|---|---|---|
Balance
August 3, 2015
|
$ | 298.4 | ||||
Accretion into
interest income
|
(8.2 | ) | ||||
Balance
September 30, 2015
|
$ | 290.2 |
Debt Securities HTM Carrying Value and Fair Value
(dollars in millions)
Carrying
Value |
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value |
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2015
|
|||||||||||||||||||
Mortgage-backed securities
|
|||||||||||||||||||
U.S. government
securities
|
$ | 153.3 | $ | 1.6 | $ | (2.1 | ) | $ | 152.8 | ||||||||||
State and
municipal
|
37.1 | 0.1 | (0.3 | ) | 36.9 | ||||||||||||||
Foreign
government
|
16.4 | 0.1 | (0.1 | ) | 16.4 | ||||||||||||||
Corporate
foreign
|
103.9 | 6.8 | | 110.7 | |||||||||||||||
Total debt
securities held-to-maturity
|
$ | 310.7 | $ | 8.6 | $ | (2.5 | ) | $ | 316.8 | ||||||||||
December 31,
2014
|
|||||||||||||||||||
Mortgage-backed securities
|
|||||||||||||||||||
U.S. government
agency securities
|
$ | 156.3 | $ | 2.5 | $ | (1.9 | ) | $ | 156.9 | ||||||||||
State and
municipal
|
48.1 | 0.1 | (1.8 | ) | 46.4 | ||||||||||||||
Foreign
government
|
37.9 | 0.1 | | 38.0 | |||||||||||||||
Corporate
foreign
|
110.0 | 9.0 | | 119.0 | |||||||||||||||
Total debt
securities held-to-maturity
|
$ | 352.3 | $ | 11.7 | $ | (3.7 | ) | $ | 360.3 |
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized
Cost |
Fair
Value |
Amortized
Cost |
Fair
Value |
||||||||||||||||
Mortgage-backed securities U.S. government agency securities
|
|||||||||||||||||||
After 5 but
within 10 years
|
$ | 1.3 | $ | 1.3 | $ | 1.3 | $ | 1.3 | |||||||||||
Due after 10
years
|
152.0 | 151.5 | 155.0 | 155.6 | |||||||||||||||
Total
|
153.3 | 152.8 | 156.3 | 156.9 | |||||||||||||||
State and municipal
|
|||||||||||||||||||
Due within 1
year
|
$ | 0.7 | $ | 0.7 | $ | 1.2 | $ | 1.2 | |||||||||||
After 1 but
within 5 years
|
1.5 | 1.5 | 2.9 | 2.9 | |||||||||||||||
After 5 but
within 10 years
|
0.8 | 0.8 | _ | _ | |||||||||||||||
Due after 10
years
|
34.1 | 33.9 | 44.0 | 42.3 | |||||||||||||||
Total
|
37.1 | 36.9 | 48.1 | 46.4 | |||||||||||||||
Foreign government
|
|||||||||||||||||||
Due within 1
year
|
$ | 14.0 | $ | 14.0 | $ | 10.8 | $ | 10.8 | |||||||||||
After 1 but
within 5 years
|
2.4 | 2.4 | 27.1 | 27.2 | |||||||||||||||
Total
|
16.4 | 16.4 | 37.9 | 38.0 | |||||||||||||||
Corporate Foreign securities
|
|||||||||||||||||||
Due within 1
year
|
$ | 0.9 | $ | 0.9 | $ | 0.9 | $ | 0.9 | |||||||||||
After 1 but
within 5 years
|
76.2 | 82.2 | 43.7 | 49.8 | |||||||||||||||
After 5 but
within 10 years
|
26.8 | 27.6 | 65.4 | 68.3 | |||||||||||||||
Total
|
103.9 | 110.7 | 110.0 | 119.0 | |||||||||||||||
Total debt
securities held-to-maturity
|
$ | 310.7 | $ | 316.8 | $ | 352.3 | $ | 360.3 |
(1)
|
Investments with no stated maturities are included as contractual maturities of greater than 10 years. Actual maturities may differ due to call or prepayment rights. |
September 30,
2015 |
December 31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Current and
deferred federal and state tax assets
(1)
|
$ | 1,216.7 | $ | 483.5 | ||||||
Deposits on
commercial aerospace equipment
|
810.7 | 736.3 | ||||||||
Tax credit
investments and investments in unconsolidated subsidiaries
(2)
|
224.6 | 73.4 | ||||||||
Property,
furniture and fixtures
|
200.2 | 126.4 | ||||||||
Fair value of
derivative financial instruments
|
166.9 | 168.0 | ||||||||
Deferred debt
costs and other deferred charges
|
131.7 | 148.1 | ||||||||
OREO and
repossessed assets
|
127.9 | 0.8 | ||||||||
Tax receivables,
other than income taxes
|
102.2 | 102.0 | ||||||||
Executive
retirement plan and deferred compensation
|
94.7 | 96.7 | ||||||||
Other
(3)
|
462.8 | 171.5 | ||||||||
Total other
assets
|
$ | 3,538.4 | $ | 2,106.7 |
(1)
|
The increase is primarily due to the reversal of the deferred tax asset valuation ($676 million) in the third quarter. See Note 18 Income Taxes. |
(2)
|
Included in this balance are affordable housing investments that provide tax benefits to investors in the form of tax deductions from operating losses and tax credits. As a limited partner, the Company has no significant influence over the operations. |
(3)
|
Other includes items such as investments in and receivables from non-consolidated entities, and other miscellaneous assets. |
September 30,
2015 |
December 31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Deposits
Outstanding
|
$ | 32,328.9 | $ | 15,849.8 | ||||||
Weighted average
contractual interest rate
|
1.26% | 1.69% | ||||||||
Weighted average
remaining number of days to maturity
(1)
|
891 days
|
1,293
days
|
(1)
|
Excludes deposit balances with no stated maturity. |
Nine Months Ended
September 30, 2015 |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Daily average
deposits
|
$ | 20,052.9 |
|
|||||||
Maximum amount
outstanding
|
32,328.9 |
|
||||||||
Weighted average
contractual interest rate for the year
|
1.55% |
|
September 30, 2015
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Amount
|
Average Rate
|
||||||||||
Non-interest-bearing checking
|
$ | 966.6 | | ||||||||
Interest-bearing checking
|
3,205.1 | 0.51 | % | ||||||||
Money
market
|
5,367.8 | 0.74 | % | ||||||||
Savings
|
4,679.9 | 0.96 | % | ||||||||
Other
|
169.3 | | |||||||||
Total checking
and savings deposits
|
$ | 14,388.7 | |||||||||
Certificates of
deposit, remaining contractual maturity:
|
|||||||||||
Within one
year
|
$ | 7,633.2 | 1.15 | % | |||||||
One to two
years
|
2,925.3 | 1.36 | % | ||||||||
Two to three
years
|
1,391.5 | 1.60 | % | ||||||||
Three to four
years
|
1,638.8 | 2.28 | % | ||||||||
Four to five
years
|
2,056.2 | 2.27 | % | ||||||||
Over five
years
|
2,270.7 | 3.14 | % | ||||||||
Total
certificates of deposit
|
$ | 17,915.7 | |||||||||
Premium/discount
|
(1.1 | ) | |||||||||
Purchase
accounting adjustments
|
25.6 | ||||||||||
Total
Deposits
|
$ | 32,328.9 | 1.26 | % |
Certificates of Deposits $100,000 or More
(dollars in millions)
September 30,
2015 |
December 31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
U.S. certificates
of deposits:
|
||||||||||
Three months or
less
|
$ | 1,390.5 | $ | 340.9 | ||||||
After three
months through six months
|
1,449.5 | 330.8 | ||||||||
After six months
through twelve months
|
2,183.5 | 757.8 | ||||||||
After twelve
months
|
4,506.9 | 2,590.3 | ||||||||
Total
domestic
|
$ | 9,530.4 | $ | 4,019.8 | ||||||
Non-U.S.
certificates of deposits
|
$ | 24.0 | $ | 57.0 |
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
CIT Group Inc.
|
Subsidiaries
|
Total
|
Total
|
||||||||||||||||
Senior
Unsecured
(1)
|
$ | 10,725.0 | $ | | $ | 10,725.0 | $ | 11,932.4 | |||||||||||
Secured
Borrowings:
|
|||||||||||||||||||
Structured
financings
|
| 5,376.5 | 5,376.5 | 6,268.7 | |||||||||||||||
FHLB
advances
|
| 3,219.0 | 3,219.0 | 254.7 | |||||||||||||||
Total Borrowings
|
$ | 10,725.0 | $ | 8,595.5 | $ | 19,320.5 | $ | 18,455.8 |
(1)
|
Senior Unsecured Notes at September 30, 2015 were comprised of $8,236.0 million unsecured notes, $2,450.0 million Series C Notes, and $39.0 million other unsecured debt. |
2016
|
2017
|
2018
|
2019
|
2020
|
Thereafter
|
Contractual
Maturities |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Senior unsecured
notes
|
$ | | $ | 2,992.0 | $ | 2,200.0 | $ | 2,750.0 | $ | 750.0 | $ | 2,051.4 | $ | 10,743.4 | ||||||||||||||||
Secured
Borrowing:
|
||||||||||||||||||||||||||||||
Structured
financings
|
1,734.9 | 896.5 | 680.0 | 452.3 | 347.8 | 1,256.4 | 5,367.9 | |||||||||||||||||||||||
FHLB
advances
|
2,271.5 | 42.0 | 900.0 | | | | 3,213.5 | |||||||||||||||||||||||
|
$ | 4,006.4 | $ | 3,930.5 | $ | 3,780.0 | $ | 3,202.3 | $ | 1,097.8 | $ | 3,307.8 | $ | 19,324.8 |
Senior Unsecured Notes
(dollars in millions)
Maturity Date
|
Rate (%)
|
Date of Issuance
|
Par Value
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
May
2017
|
5.000 | % |
May
2012
|
$ | 1,246.5 | |||||||
August
2017
|
4.250 | % |
August
2012
|
1,745.5 | ||||||||
March
2018
|
5.250 | % |
March
2012
|
1,500.0 | ||||||||
April
2018*
|
6.625 | % |
March
2011
|
700.0 | ||||||||
February
2019*
|
5.500 | % |
February
2012
|
1,750.0 | ||||||||
February
2019
|
3.875 | % |
February
2014
|
1,000.0 | ||||||||
May
2020
|
5.375 | % |
May
2012
|
750.0 | ||||||||
August
2022
|
5.000 | % |
August
2012
|
1,250.0 | ||||||||
August
2023
|
5.000 | % |
August
2013
|
750.0 | ||||||||
Weighted average
and total
|
5.02 | % |
|
$ | 10,692.0 |
*
|
Series C Unsecured Notes |
FHLB Advances with Pledged Assets Summary
(dollars in millions)
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
FHLB
Advances |
Pledged
Assets |
FHLB
Advances |
Pledged
Assets |
||||||||||||||||
Total
|
$ | 3,219.0 | $ | 6,583.8 | $ | 254.7 | $ | 309.6 |
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Secured
Borrowing |
Pledged
Assets |
Secured
Borrowing |
Pledged
Assets |
||||||||||||||||
Rail
(2)
|
$ | 1,087.2 | $ | 1,505.5 | $ | 1,179.7 | $ | 1,575.7 | |||||||||||
Aerospace
(2)
|
2,219.8 | 3,707.9 | 2,411.7 | 3,914.4 | |||||||||||||||
International
Finance
|
416.2 | 560.3 | 545.0 | 730.6 | |||||||||||||||
Subtotal
Transportation & International Finance
|
3,723.2 | 5,773.7 | 4,136.4 | 6,220.7 | |||||||||||||||
Commercial
Banking
|
| 0.2 | | | |||||||||||||||
Commercial
Services
|
334.7 | 1,671.7 | 334.7 | 1,644.6 | |||||||||||||||
Equipment
Finance
|
1,318.6 | 1,656.5 | 1,797.6 | 2,352.8 | |||||||||||||||
Subtotal
North America Banking
|
1,653.3 | 3,328.4 | 2,132.3 | 3,997.4 | |||||||||||||||
Total
|
$ | 5,376.5 | $ | 9,102.1 | $ | 6,268.7 | $ | 10,218.1 |
(1)
|
As part of our liquidity management strategy, the Company pledges assets to secure financing transactions (which include securitizations), and for other purposes as required or permitted by law, while CIT Bank, N.A. also pledges assets to secure borrowings from the FHLB and FRB. |
(2)
|
At September 30, 2015, the GSI TRS related borrowings and pledged assets, respectively, of $1.2 billion and $1.8 billion were included in Transportation & International Finance. The GSI TRS is described in Note 10 Derivative Financial Instruments. |
Assets and Liabilities in Unconsolidated VIEs
(dollars in millions)
Unconsolidated VIEs Carrying Value
September 30, 2015 |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Securities
|
Partnership
Investment |
||||||||||
Agency
securities
|
$ | 151.5 | $ | | |||||||
Non-agency
securities Other servicer
|
952.5 | | |||||||||
Tax credit equity
investments
|
| 134.5 | |||||||||
Total
Assets
|
$ | 1,104.0 | $ | 134.5 | |||||||
Commitments to
tax credit investments
|
$ | | $ | 20.3 | |||||||
Total
Liabilities
|
$ | | $ | 20.3 | |||||||
Maximum loss
exposure
(1)
|
$ | 1,104.0 | $ | 134.5 |
(1)
|
Maximum loss exposure to the unconsolidated VIEs excludes the liability for representations and warranties, corporate guarantees and also excludes servicing advances. |
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Qualifying Hedges |
Notional
Amount |
Asset Fair
Value (2) |
Liability
Fair Value (2) |
Notional
Amount |
Asset Fair
Value (2) |
Liability
Fair Value (2) |
|||||||||||||||||||||
Foreign currency
forward contracts net investment hedges
|
$ | 868.5 | $ | 54.3 | $ | (1.4 | ) | $ | 1,193.1 | $ | 74.7 | $ | | ||||||||||||||
Total Qualifying
Hedges
|
868.5 | 54.3 | (1.4 | ) | 1,193.1 | 74.7 | | ||||||||||||||||||||
Non-Qualifying Hedges
|
|||||||||||||||||||||||||||
Interest rate
swaps
|
4,165.7 | 53.4 | (52.8 | ) | 1,902.0 | 15.6 | (23.6 | ) | |||||||||||||||||||
Written
options
|
3,662.9 | | (2.5 | ) | 2,711.5 | | (2.7 | ) | |||||||||||||||||||
Purchased
options
|
2,349.3 | 1.8 | | 948.4 | 0.8 | | |||||||||||||||||||||
Foreign currency
forward contracts
|
1,854.0 | 58.6 | (17.1 | ) | 2,028.8 | 77.2 | (12.0 | ) | |||||||||||||||||||
Total Return
Swap (TRS)
|
1,138.2 | | (56.2 | ) | 1,091.9 | | (24.5 | ) | |||||||||||||||||||
Equity
Warrants
|
1.0 | 0.2 | | 1.0 | 0.1 | | |||||||||||||||||||||
Interest Rate
Lock Commitments
|
6.5 | 0.1 | | | | | |||||||||||||||||||||
Credit derivatives
|
27.3 | | (0.2 | ) | | | | ||||||||||||||||||||
Total
Non-qualifying Hedges
|
13,204.9 | 114.1 | (128.8 | ) | 8,683.6 | 93.7 | (62.8 | ) | |||||||||||||||||||
Total
Hedges
|
$ | 14,073.4 | $ | 168.4 | $ | (130.2 | ) | $ | 9,876.7 | $ | 168.4 | $ | (62.8 | ) |
(1)
|
Presented on a gross basis. |
(2)
|
Fair value balances include accrued interest. |
n
|
Funding costs for similar financings based on current market conditions; |
n
|
Forecasted usage of the long-dated facilities through the final maturity date in 2028; and |
n
|
Forecasted amortization, due to principal payments on the underlying ABS, which impacts the amount of the unutilized portion. |
Offsetting of Derivative Assets and Liabilities
(dollars in millions)
Gross Amounts not offset in the
Consolidated Balance Sheet |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross Amount
of Recognized Assets (Liabilities) |
Gross Amount
Offset in the Consolidated Balance Sheet |
Net Amount
Presented in the Consolidated Balance Sheet |
Derivative
Financial Instruments (1) |
Cash Collateral
Pledged/ (Received) (1)(2) |
Net
Amount |
||||||||||||||||||||||
September
30, 2015
|
|||||||||||||||||||||||||||
Derivative
assets
|
$ | 168.4 | $ | | $ | 168.4 | $ | (20.2 | ) | $ | (94.5 | ) | $ | 53.7 | |||||||||||||
Derivative
liabilities
|
(130.2 | ) | | (130.2 | ) | 20.2 | 44.5 | (65.5 | ) | ||||||||||||||||||
December
31, 2014
|
|||||||||||||||||||||||||||
Derivative
assets
|
$ | 168.4 | $ | | $ | 168.4 | $ | (13.6 | ) | $ | (137.3 | ) | $ | 17.5 | |||||||||||||
Derivative
liabilities
|
(62.8 | ) | | (62.8 | ) | 13.6 | 8.7 | (40.5 | ) |
(1)
|
The Companys derivative transactions are governed by ISDA agreements that allow for net settlements of certain payments as well as offsetting of all contracts (Derivative Financial Instruments) with a given counterparty in the event of bankruptcy or default of one of the two parties to the transaction. We believe our ISDA agreements meet the definition of a master netting arrangement or similar agreement for purposes of the above disclosure. In conjunction with the ISDA agreements, the Company has entered into collateral arrangements with its counterparties which provide for the exchange of cash depending on change in the market valuation of the derivative contracts outstanding. Such collateral is available to be applied in settlement of the net balances upon an event of default of one of the counterparties. |
(2)
|
Collateral pledged or received is included in Other assets or Other liabilities, respectively. |
Derivative Instrument Gains and Losses
(dollars in millions)
Quarters Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Derivative Instruments
|
Gain/(Loss)
Recognized |
2015
|
2014
|
2015
|
2014
|
||||||||||||||||||
Non
Qualifying Hedges
|
|||||||||||||||||||||||
Cross currency
swaps
|
Other
income
|
| | | 4.1 | ||||||||||||||||||
Interest rate
swaps
|
Other
income
|
(2.2 | ) | 2.1 | (1.1 | ) | 5.9 | ||||||||||||||||
Interest rate
options
|
Other
income
|
1.2 | (2.2 | ) | 1.1 | (2.4 | ) | ||||||||||||||||
Foreign currency
forward contracts
|
Other
income
|
43.8 | 80.7 | 84.5 | 67.2 | ||||||||||||||||||
Equity
warrants
|
Other
income
|
| (0.3 | ) | 0.1 | (0.8 | ) | ||||||||||||||||
TRS
|
Other
income
|
(24.3 | ) | (13.4 | ) | (31.7 | ) | (3.7 | ) | ||||||||||||||
Total
Non-qualifying Hedges
|
|
18.5 | 66.9 | 52.9 | 70.3 | ||||||||||||||||||
Total
derivatives-income statement impact
|
|
$ | 18.5 | $ | 66.9 | $ | 52.9 | $ | 70.3 |
Contract Type
|
Derivatives
effective portion reclassified from AOCI to income |
Hedge
ineffectiveness recorded directly in income |
Total
income statement impact |
Derivatives
effective portion recorded in OCI |
Total
change in OCI for period |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quarter Ended September 30, 2015
|
|||||||||||||||||||||||
Foreign
currency forward contracts net investment hedges
|
$ | 4.3 | $ | | $ | 4.3 | $ | 44.0 | $ | 39.7 | |||||||||||||
Total
|
$ | 4.3 | $ | | $ | 4.3 | $ | 44.0 | $ | 39.7 | |||||||||||||
Quarter
Ended September 30, 2014
|
|||||||||||||||||||||||
Foreign
currency forward contracts cash flow hedges
|
$ | | $ | | $ | | $ | 0.2 | $ | 0.2 | |||||||||||||
Foreign
currency forward contracts net investment hedges
|
(6.7 | ) | | (6.7 | ) | 82.0 | 88.7 | ||||||||||||||||
Total
|
$ | (6.7 | ) | $ | | $ | (6.7 | ) | $ | 82.2 | $ | 88.9 | |||||||||||
Nine Months Ended
September 30, 2015 |
|||||||||||||||||||||||
Foreign
currency forward contracts net investment hedges
|
$ | 8.5 | $ | | $ | 8.5 | $ | 106.3 | $ | 97.8 | |||||||||||||
Total
|
$ | 8.5 | $ | | $ | 8.5 | $ | 106.3 | $ | 97.8 | |||||||||||||
Nine Months
Ended September 30, 2014
|
|||||||||||||||||||||||
Foreign
currency forward contracts cash flow hedges
|
$ | | $ | | $ | | $ | 0.2 | $ | 0.2 | |||||||||||||
Foreign
currency forward contracts net investment hedges
|
(12.8 | ) | | (12.8 | ) | 63.5 | 76.3 | ||||||||||||||||
Cross currency
swaps net investment hedges
|
| | | 1.1 | 1.1 | ||||||||||||||||||
Total
|
$ | (12.8 | ) | $ | | $ | (12.8 | ) | $ | 64.8 | $ | 77.6 |
September 30,
2015 |
December 31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Equipment
maintenance reserves
|
$ | 968.4 | $ | 960.4 | ||||||
Accrued expenses
and accounts payable
|
602.7 | 478.3 | ||||||||
Current and
deferred federal and state taxes
|
384.9 | 319.1 | ||||||||
Security and
other deposits
|
296.8 | 368.0 | ||||||||
Accrued interest
payable
|
171.4 | 243.7 | ||||||||
Valuation
adjustment relating to aerospace commitments
|
98.4 | 121.2 | ||||||||
Other
(1)
|
873.1 | 398.1 | ||||||||
Total other
liabilities
|
$ | 3,395.7 | $ | 2,888.8 |
(1)
|
Other consists of other non-income taxes, property tax liabilities, contingent liabilities and other miscellaneous liabilities. The September 30, 2015 balance includes approximately $300 million related to trade date accounting for an investment security purchased on the last day of the quarter, but the funds did not transfer until October. |
September 30, 2015
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Assets
|
|||||||||||||||||||
Debt Securities
AFS
|
$ | 3,001.3 | $ | 300.0 | $ | 1,748.8 | $ | 952.5 | |||||||||||
Equity
Securities AFS
|
14.3 | 14.3 | | | |||||||||||||||
FDIC
receivable
|
54.2 | | | 54.2 | |||||||||||||||
Derivative
assets at fair value non-qualifying hedges
(1)
|
114.1 | | 114.1 | | |||||||||||||||
Derivative
assets at fair value qualifying hedges
|
54.3 | | 54.3 | | |||||||||||||||
Total
|
$ | 3,238.2 | $ | 314.3 | $ | 1,917.2 | $ | 1,006.7 | |||||||||||
Liabilities
|
|||||||||||||||||||
Derivative
liabilities at fair value non-qualifying hedges
(1)
|
$ | (128.8 | ) | $ | | $ | (71.7 | ) | $ | (57.1 | ) | ||||||||
Derivative
liabilities at fair value qualifying hedges
|
(1.4 | ) | | (1.4 | ) | | |||||||||||||
Consideration
holdback liability
|
(60.8 | ) | | | (60.8 | ) | |||||||||||||
FDIC True-up
Liability
|
(56.3 | ) | | | (56.3 | ) | |||||||||||||
Total
|
$ | (247.3 | ) | $ | | $ | (73.1 | ) | $ | (174.2 | ) | ||||||||
December 31,
2014
|
|||||||||||||||||||
Assets
|
|||||||||||||||||||
Debt Securities
AFS
|
$ | 1,116.5 | $ | 212.3 | $ | 904.2 | $ | | |||||||||||
Equity
Securities AFS
|
14.0 | 14.0 | | | |||||||||||||||
Derivative
assets at fair value non-qualifying hedges
(1)
|
93.7 | | 93.7 | | |||||||||||||||
Derivative
assets at fair value qualifying hedges
|
74.7 | | 74.7 | | |||||||||||||||
Total
|
$ | 1,298.9 | $ | 226.3 | $ | 1,072.6 | $ | | |||||||||||
Liabilities
|
|||||||||||||||||||
Derivative
liabilities at fair value non-qualifying hedges
(1)
|
$ | (62.8 | ) | $ | | $ | (36.2 | ) | $ | (26.6 | ) | ||||||||
Total
|
$ | (62.8 | ) | $ | | $ | (36.2 | ) | $ | (26.6 | ) |
(1)
|
Derivative fair values include accrued interest |
Financial Instrument |
Estimated Fair
Value |
Valuation
Technique(s) |
Significant
Unobservable Inputs |
Range
of Inputs |
Weighted
Average |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015
|
||||||||||||||||||||||
Assets
|
||||||||||||||||||||||
Securities
AFS
|
$ | 952.5 | Discounted cash flow | Discount Rate | 0.0% 49.0 | % | 6.2 | % | ||||||||||||||
|
Prepayment Rate | 3.2% 22.3 | % | 9.9 | % | |||||||||||||||||
|
Default Rate | 0.0% 9.8 | % | 4.1 | % | |||||||||||||||||
|
Loss Severity | 0.1% 83.3 | % | 32.0 | % | |||||||||||||||||
FDIC
Receivable
|
54.2 | Discounted cash flow | Discount Rate | 9.5% 15.0 | % | 10.4 | % | |||||||||||||||
|
Prepayment Rate | 2.0% 14.0 | % | 3.7 | % | |||||||||||||||||
|
Default Rate | 6.0% 36.0 | % | 10.8 | % | |||||||||||||||||
|
Loss Severity | 20.0% 65.0 | % | 31.7 | % | |||||||||||||||||
Total
Assets
|
$ | 1,006.7 | ||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||
FDIC True-up
liability
|
$ | (56.3 | ) | Discounted cash flow | Discount Rate | 4.0% 4.0 | % | 4.0 | % | |||||||||||||
Consideration
holdback liability
|
(60.8 | ) | Discounted cash flow | Payment Probability | 0.0% 100.0 | % | 53.8 | % | ||||||||||||||
|
Discount Rate | 3.0% 3.0 | % | 3.0 | % | |||||||||||||||||
Derivative
liabilities non qualifying
|
(57.1 | ) | Market comparables (1) | |||||||||||||||||||
Total
Liabilities
|
$ | (174.2 | ) |
(1)
|
The valuation of these derivatives is primarily related to the GSI facilities which is based on several factors using a discounted cash flow methodology, including a) funding costs for similar financings based on current market conditions; b) forecasted usage of long-dated facilities through the final maturity date in 2028; and c) forecasted amortization, due to principal payments on the underlying ABS, which impacts the amount of the unutilized portion. |
n
|
Discounted cash flow Discounted cash flow valuation techniques generally consist of developing an estimate of future cash flows that are expected to occur over the life of an instrument and then discounting those cash flows at a rate of return that results in the estimated fair value amount. The Company utilizes both the direct and indirect valuation methods. Under the direct method, contractual cash flows are adjusted for expected losses. The adjusted cash flows are discounted at a rate which considers other costs and risks, such as market risk and liquidity. Under the indirect method, contractual cash flows are discounted at a rate which reflects the costs and risks associated with the likelihood of generating the contractual cash flows. |
n
|
Market comparables Market comparable(s) pricing valuation techniques are used to determine the estimated fair value of certain instruments by incorporating known inputs such as recent transaction prices, pending transactions, or prices of other similar investments which require significant adjustment to reflect differences in instrument characteristics. |
n
|
Default rate is an estimate of the likelihood of not collecting contractual amounts owed expressed as a constant default rate. |
n
|
Discount rate is a rate of return used to present value the future expected cash flows to arrive at the estimated fair value of an instrument. The discount rate consists of a benchmark rate component and a risk premium component. The benchmark rate component, for example, LIBOR or U.S. Treasury rates, is generally observable within the market and is necessary to appropriately reflect the time value of money. The risk premium component reflects the amount of compensation market participants require due to the uncertainty inherent in the instruments cash flows resulting from risks such as credit and liquidity. |
n
|
Loss severity is the percentage of contractual cash flows lost in the event of a default. |
n
|
Prepayment rate is the estimated rate at which forecasted prepayments of principal of the related loan or debt instrument are expected to occur, expressed as a constant prepayment rate (CPR). |
n
|
Payment Probability is an estimate of the likelihood the consideration holdback amount will be required to be paid expressed as a percentage. |
Securities AFS
|
FDIC
Receivable |
Net
Derivatives (1) |
FDIC
True-up Liability |
Consideration
holdback Liability |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31,
2014
|
$ | | $ | | $ | (26.6 | ) | $ | | $ | | |||||||||||
Included in
earnings
|
(0.2 | ) | 0.7 | (30.5 | ) | | | |||||||||||||||
Included in
comprehensive income
|
(10.9 | ) | | | | | ||||||||||||||||
Purchases
|
992.8 | 54.8 | | (56.3 | ) | (60.8 | ) | |||||||||||||||
Settlements
|
(29.2 | ) | (1.3 | ) | | | | |||||||||||||||
Balance as of
September 30, 2015
|
$ | 952.5 | $ | 54.2 | $ | (57.1 | ) | $ | (56.3 | ) | $ | (60.8 | ) | |||||||||
|
||||||||||||||||||||||
|
Net
Derivatives (1) |
|||||||||||||||||||||
December 31,
2013
|
$ | (9.7 | ) | |||||||||||||||||||
Included in
earnings
|
(3.7 | ) | ||||||||||||||||||||
Balance as of
September 30, 2014
|
$ | (13.4 | ) |
(1)
|
Valuation of the derivatives related to the GSI facilities and written options on certain CIT Bank CDs. |
Fair Value Measurements at
Reporting Date Using: |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
(Losses) |
|||||||||||||||||||
Assets
|
|||||||||||||||||||||||
September 30,
2015
|
|||||||||||||||||||||||
Assets held for
sale
|
$ | 1,289.4 | | | $ | 1,289.4 | $ | (34.3 | ) | ||||||||||||||
Other real
estate owned
|
127.9 | | | 127.9 | (3.2 | ) | |||||||||||||||||
Impaired
loans
|
52.9 | | | 52.9 | (13.0 | ) | |||||||||||||||||
Total
|
$ | 1,470.2 | $ | | $ | | $ | 1,470.2 | $ | (50.5 | ) | ||||||||||||
December 31, 2014
|
|||||||||||||||||||||||
Assets held for
sale
|
$ | 949.6 | $ | | $ | | $ | 949.6 | $ | (73.6 | ) | ||||||||||||
Impaired
loans
|
13.2 | | | 13.2 | (4.9 | ) | |||||||||||||||||
Total
|
$ | 962.8 | $ | | $ | | $ | 962.8 | $ | (78.5 | ) |
September 30, 2015
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in millions of dollars) |
Estimated Fair
Value Carrying Amount |
Aggregate
Unpaid Principal |
Estimated Fair Value
Carrying Amount Less Aggregate Unpaid |
||||||||||||
FDIC
Receivable
|
$ | 54.2 | $ | 213.0 | $ | (158.8 | ) |
Financial Instruments
(dollars in millions)
Estimated Fair Value
|
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Carrying
Value |
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||||||||
September
30, 2015
|
|||||||||||||||||||||||
Financial
Assets
|
|||||||||||||||||||||||
Cash and
interest bearing deposits
|
$ | 8,259.9 | $ | 8,259.9 | $ | | $ | | $ | 8,259.9 | |||||||||||||
Derivative
assets at fair value non-qualifying hedges
|
114.1 | | 114.1 | | 114.1 | ||||||||||||||||||
Derivative
assets at fair value qualifying hedges
|
54.3 | | 54.3 | | 54.3 | ||||||||||||||||||
Assets held for
sale (excluding leases)
|
572.7 | 22.0 | 9.5 | 552.5 | 584.0 | ||||||||||||||||||
Loans
(excluding leases)
|
28,789.3 | | 1,583.2 | 26,662.4 | 28,245.6 | ||||||||||||||||||
Securities
purchased under agreements to resell
|
100.0 | | 100.0 | | 100.0 | ||||||||||||||||||
Investment
securities
(1)
|
3,618.8 | 518.0 | 1,793.5 | 1,313.3 | 3,624.8 | ||||||||||||||||||
Indemnification
assets
(2)
|
396.6 | | | 393.0 | 393.0 | ||||||||||||||||||
Tax credit
investments
|
113.6 | | | 120.2 | 120.2 | ||||||||||||||||||
Other assets
subject to fair value disclosure and unsecured counterparty receivables
(3)
|
1,243.1 | | | 1,243.1 | 1,243.1 | ||||||||||||||||||
Financial
Liabilities
|
|||||||||||||||||||||||
Deposits
(4)
|
(32,380.4 | ) | | | (32,462.0 | ) | (32,462.0 | ) | |||||||||||||||
Derivative
liabilities at fair value non-qualifying hedges
|
(128.8 | ) | | (71.7 | ) | (57.1 | ) | (128.8 | ) | ||||||||||||||
Derivative
liabilities at fair value qualifying hedges
|
(1.4 | ) | | (1.4 | ) | | (1.4 | ) | |||||||||||||||
Borrowings
(4)
|
(19,440.3 | ) | | (16,667.1 | ) | (3,166.5 | ) | (19,833.6 | ) | ||||||||||||||
Commitment to
affordable housing investments
|
(20.3 | ) | | | (16.3 | ) | (16.3 | ) | |||||||||||||||
Credit balances
of factoring clients
|
(1,609.3 | ) | | | (1,609.3 | ) | (1,609.3 | ) | |||||||||||||||
Other
liabilities subject to fair value disclosure
(5)
|
(2,106.4 | ) | | | (2,106.4 | ) | (2,106.4 | ) | |||||||||||||||
December 31,
2014
|
|||||||||||||||||||||||
Financial
Assets
|
|||||||||||||||||||||||
Cash and
interest bearing deposits
|
$ | 7,119.7 | $ | 7,119.7 | $ | | $ | | $ | 7,119.7 | |||||||||||||
Derivative
assets at fair value non-qualifying hedges
|
93.7 | | 93.7 | | 93.7 | ||||||||||||||||||
Derivative
assets at fair value qualifying hedges
|
74.7 | | 74.7 | | 74.7 | ||||||||||||||||||
Assets held for
sale (excluding leases)
|
67.0 | | | 67.2 | 67.2 | ||||||||||||||||||
Loans
(excluding leases)
(6)
|
14,832.1 | | 1,585.4 | 12,969.5 | 14,554.9 | ||||||||||||||||||
Securities
purchased under agreements to resell
|
650.0 | | 650.0 | | 650.0 | ||||||||||||||||||
Investment
securities
|
1,550.3 | 464.9 | 956.0 | 137.4 | 1,558.3 | ||||||||||||||||||
Other assets
subject to fair value disclosure and unsecured counterparty receivables
(3)
|
886.2 | | | 886.2 | 886.2 | ||||||||||||||||||
Financial
Liabilities
|
|||||||||||||||||||||||
Deposits
(4)
|
(15,891.4 | ) | | | (15,972.2 | ) | (15,972.2 | ) | |||||||||||||||
Derivative
liabilities at fair value non-qualifying hedges
|
(62.8 | ) | | (36.2 | ) | (26.6 | ) | (62.8 | ) | ||||||||||||||
Borrowings
(4)
|
(18,657.9 | ) | | (15,906.3 | ) | (3,338.1 | ) | (19,244.4 | ) | ||||||||||||||
Credit balances
of factoring clients
|
(1,622.1 | ) | | | (1,622.1 | ) | (1,622.1 | ) | |||||||||||||||
Other
liabilities subject to fair value disclosure
(5)
|
(2,066.8 | ) | | | (2,066.8 | ) | (2,066.8 | ) |
(1)
|
Level 3 estimated fair value includes debt securities AFS ($952.5 million), non-marketable investments ($292.5 million), and debt securities HTM ($68.3 million). |
(2)
|
The indemnification assets included in the above table does not include Agency claims indemnification ($67.7 million) and Loan indemnification ($0.7 million), as they are not considered financial instruments. |
(3)
|
Other assets subject to fair value disclosure primarily include accrued interest receivable and miscellaneous receivables. These assets have carrying values that approximate fair value generally due to the short-term nature and are classified as Level 3. The unsecured counterparty receivables primarily consist of amounts owed to CIT from GSI for debt discount, return of collateral posted to GSI and settlements resulting from market value changes to asset-backed securities underlying the GSI Facilities |
(4)
|
Deposits and borrowings include accrued interest, which is included in Other liabilities in the Balance Sheet. |
(5)
|
Other liabilities subject to fair value disclosure include accounts payable, accrued liabilities, customer security and maintenance deposits and miscellaneous liabilities. The fair value of these approximate carrying value and are classified as Level 3. |
(6)
|
In preparing the interim financial statements for the quarter ended September 30, 2015, the Company discovered and corrected an immaterial error impacting the carrying value and estimated Level 3 fair value relating to the Loans (excluding leases) line item in the amount of $452.6 million; with an estimated fair value using Level 3 inputs of $478.7 million as of December 31, 2014. |
n
|
Commercial Loans Of the loan balance above, approximately $1.6 billion at September 30, 2015 and December 31, 2014, respectively, was valued using Level 2 inputs. As there is no liquid secondary market for the other loans in the Companys portfolio, the fair value is estimated based on discounted cash flow analyses which use Level 3 inputs at both September 30, 2015 and December 31, 2014. In addition to the characteristics of the underlying contracts, key inputs to the analysis include interest rates, prepayment rates, and credit spreads. For the commercial loan portfolio, the market based credit spread inputs are derived from instruments with comparable credit risk characteristics obtained from independent third party vendors. As these Level 3 unobservable inputs are specific to individual loans / collateral types, management does not believe that sensitivity analysis of individual inputs is meaningful, but rather that sensitivity is more meaningfully assessed through the evaluation of aggregate carrying values of the loans. The fair value of loans at September 30, 2015 was $28.2 billion, which was 98.1% of carrying value. The fair value of loans at December 31, 2014 was $14.6 billion, which was 98.2% of carrying value. |
n
|
Impaired Loans The value of impaired loans is estimated using the fair value of collateral (on an orderly liquidation basis) if the loan is collateralized, the present value of expected cash flows utilizing the current market rate for such loan, or observable market price. As these Level 3 unobservable inputs are specific to individual loans / collateral types, management does not believe that sensitivity analysis of individual inputs is meaningful, but rather that sensitivity is more meaningfully assessed through the evaluation of aggregate carrying values of impaired loans relative to contractual amounts owed (unpaid principal balance or UPB) from customers. As of September 30, 2015, the UPB related to impaired loans totaled $129.6 million. Including related allowances, these loans are carried at $83.9 million, or 64.7% of UPB. Of these amounts, $31.2 million and $24.8 million of UPB and carrying value, respectively, relate to loans with no specific allowance. As of December 31, 2014, the UPB related to impaired loans totaled $85.3 million, and including related allowances, these loans were carried at $45.1 million, or 53% of UPB. Of these amounts, $29.2 million and $21.2 million of UPB and carrying value relate to loans with no specific allowance. The difference between UPB and carrying value reflects |
|
cumulative charge-offs on accounts remaining in process of collection, FSA discounts and allowances. See Note 3 Loans for more information. |
n
|
PCI loans These loans are valued by grouping the loans into performing and non-performing groups and stratifying the loans based on common risk characteristics such as product type, FICO score and other economic attributes. Due to a lack of observable market data, the estimated fair value of these loan portfolios was based on an internal model using unobservable inputs, including discount rates, prepayment rates, delinquency roll-rates, and loss severities. Due to the significance of the unobservable inputs, these instruments are classified as Level 3. |
n
|
Repurchased Loans These loans represent GNMA forward loans repurchased under its servicer option and HECM GNMA reverse mortgage loans repurchased out of the HMBS pool. The estimated fair value is based on the carrying value, net of the estimated credit loss for the associated amounts above the appraised value or estimated market value of the underlying collateral. Due to the unobservable nature of the inputs used in deriving the estimated fair value of these instruments, these instruments are classified as Level 3. |
n
|
Jumbo Mortgage Loans The estimated fair value was determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Due to the unobservable nature of the inputs used in deriving the estimated fair value of these instruments, these loans are classified as Level 3. |
n
|
Unsecured debt Approximately $10.7 billion par value at September 30, 2015 and $12.0 billion par value at December 31, 2014 were valued using market inputs, which are Level 2 inputs. |
n
|
Structured financings Approximately $5.5 billion par value at September 30, 2015 and $3.3 billion par value at December 31, 2014 were valued using market inputs, which are Level 2 inputs. Where market estimates were not available for approximately $3.0 billion and $3.2 billion par value at September 30, 2015 and December 31, 2014, respectively, values were estimated using a discounted cash flow analysis with a discount rate approximating current market rates for issuances by CIT of similar debt, which are Level 3 inputs. |
n
|
FHLB Advances Estimated fair value is based on a discounted cash flow model that utilizes benchmark interest rates and other observable market inputs. The discounted cash flow model uses the contractual advance features to determine the cash flows with a zero spread to the forward FHLB curve, which are discounted using observable benchmark interest rates. As the model inputs can be observed in a liquid market and the model does not require significant judgment, FHLB advances are classified as Level 2. |
Issued
|
Less Treasury
|
Outstanding
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Common Stock
December 31, 2014
|
203,127,291 | (22,206,716 | ) | 180,920,575 | ||||||||||
Common stock
issuance acquisition
(1)
|
| 30,946,249 | 30,946,249 | |||||||||||
Restricted stock
issued
|
1,192,325 | | 1,192,325 | |||||||||||
Repurchase of
common stock
|
| (11,631,838 | ) | (11,631,838 | ) | |||||||||
Shares held to
cover taxes on vesting restricted shares and other
|
| (499,523 | ) | (499,523 | ) | |||||||||
Employee stock
purchase plan participation
|
24,599 | | 24,599 | |||||||||||
Common Stock
September 30, 2015
|
204,344,215 | (3,391,828 | ) | 200,952,387 |
(1)
|
Excludes approximately 1.0 million of unvested RSUs. |
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross
Unrealized |
Income
Taxes |
Net
Unrealized |
Gross
Unrealized |
Income
Taxes |
Net
Unrealized |
||||||||||||||||||||||
Foreign currency
translation adjustments
|
$ | (75.3 | ) | $ | (33.5 | ) | $ | (108.8 | ) | $ | (75.4 | ) | $ | | $ | (75.4 | ) | ||||||||||
Changes in
benefit plan net gain (loss) and prior service (cost)/credit
|
(59.8 | ) | 0.2 | (59.6 | ) | (58.7 | ) | 0.2 | (58.5 | ) | |||||||||||||||||
Unrealized net
gains (losses) on available for sale securities
|
(9.7 | ) | 3.8 | (5.9 | ) | | | | |||||||||||||||||||
Total
accumulated other comprehensive loss
|
$ | (144.8 | ) | $ | (29.5 | ) | $ | (174.3 | ) | $ | (134.1 | ) | $ | 0.2 | $ | (133.9 | ) |
Foreign
currency translation adjustments |
Changes in
benefit plan net gain (loss) and prior service (cost) credit |
Changes in
fair values of derivatives qualifying as cash flow hedges |
Unrealized
net gains (losses) on available for sale securities |
Total AOCI
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance as of
December 31, 2014
|
$ | (75.4 | ) | $ | (58.5 | ) | $ | | $ | | $ | (133.9 | ) | |||||||||
AOCI activity
before reclassifications
|
(55.6 | ) | (1.7 | ) | | (5.9 | ) | (63.2 | ) | |||||||||||||
Amounts
reclassified from AOCI
|
22.2 | 0.6 | | | 22.8 | |||||||||||||||||
Net current
period AOCI
|
(33.4 | ) | (1.1 | ) | | (5.9 | ) | (40.4 | ) | |||||||||||||
Balance as of
September 30, 2015
|
$ | (108.8 | ) | $ | (59.6 | ) | $ | | $ | (5.9 | ) | $ | (174.3 | ) | ||||||||
Balance as of
December 31, 2013
|
$ | (49.4 | ) | $ | (24.1 | ) | $ | (0.2 | ) | $ | 0.1 | $ | (73.6 | ) | ||||||||
AOCI activity
before reclassifications
|
(20.9 | ) | | 0.2 | (0.6 | ) | (21.3 | ) | ||||||||||||||
Amounts
reclassified from AOCI
|
7.3 | 5.0 | | 0.5 | 12.8 | |||||||||||||||||
Net current
period AOCI
|
(13.6 | ) | 5.0 | 0.2 | (0.1 | ) | (8.5 | ) | ||||||||||||||
Balance as of
September 30, 2014
|
$ | (63.0 | ) | $ | (19.1 | ) | $ | | $ | | $ | (82.1 | ) |
Quarters Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
2015
|
2014
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
Gross
Amount |
Tax
|
Net
Amount |
Gross
Amount |
Tax
|
Net
Amount |
Gross
Amount |
Tax
|
Net
Amount |
Gross
Amount |
Tax
|
Net
Amount |
Affected
Income Statement line item |
||||||||||||||||||||||||||||||||||||||||||
Foreign currency
translation adjustments gains (losses)
|
$ | 19.2 | $ | (0.4 | ) | $ | 18.8 | $ | 4.9 | $ | | $ | 4.9 | $ | 22.6 | $ | (0.4 | ) | $ | 22.2 | $ | 7.3 | $ | | $ | 7.3 |
Operating
Expenses |
|||||||||||||||||||||||||||
Changes in
benefit plan net gain/(loss) and prior service (cost)/credit gains (losses)
|
0.7 | (0.2 | ) | 0.5 | 1.7 | | 1.7 | 0.9 | (0.3 | ) | 0.6 | 5.0 | | 5.0 |
Operating
Expenses |
|||||||||||||||||||||||||||||||||||||||
Unrealized net
gains (losses) on available for sale securities
|
| | | 0.5 | (0.2 | ) | 0.3 | | | | 0.8 | (0.3 | ) | 0.5 | Other Income | |||||||||||||||||||||||||||||||||||||||
Total
Reclassifications out of AOCI
|
$ | 19.9 | $ | (0.6 | ) | $ | 19.3 | $ | 7.1 | $ | (0.2 | ) | $ | 6.9 | $ | 23.5 | $ | (0.7 | ) | $ | 22.8 | $ | 13.1 | $ | (0.3 | ) | $ | 12.8 |
The following table summarizes the actual and minimum required capital ratios:
CIT
|
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Tier 1 Capital |
September 30,
2015 |
December 31,
2014 |
CIT Bank, N.A.
September 30, 2015 |
CIT Bank
December 31, 2014 |
|||||||||||||||
Total
stockholders equity
(2)
|
$ | 10,798.7 | $ | 9,068.9 | $ | 5,555.7 | $ | 2,716.4 | |||||||||||
Effect of certain
items in accumulated other comprehensive loss excluded from Tier 1 Capital and qualifying noncontrolling interest
|
66.0 | 53.0 | 5.8 | (0.2 | ) | ||||||||||||||
Adjusted total
equity
|
10,864.7 | 9,121.9 | 5,561.5 | 2,716.2 | |||||||||||||||
Less:
Goodwill
(3)
|
(1,068.4 | ) | (571.3 | ) | (765.8 | ) | (167.8 | ) | |||||||||||
Disallowed
deferred tax assets
|
(867.4 | ) | (416.8 | ) | | | |||||||||||||
Disallowed
intangible assets
(3)
|
(59.2 | ) | (25.7 | ) | (45.8 | ) | (12.1 | ) | |||||||||||
Investment in
certain subsidiaries
|
NA | (36.7 | ) | | | ||||||||||||||
Other Tier 1
components
(4)
|
| (4.1 | ) | | | ||||||||||||||
Common Equity
Tier 1 Capital
|
8,869.7 | 8,067.3 | 4,749.9 | 2,536.3 | |||||||||||||||
Tier 1
Capital
|
8,869.7 | 8,067.3 | 4,749.9 | 2,536.3 | |||||||||||||||
Tier 2 Capital
|
|||||||||||||||||||
Qualifying
allowance for credit losses and other reserves
(5)
|
375.8 | 381.8 | 341.6 | 245.1 | |||||||||||||||
Less: Investment
in certain subsidiaries
|
NA | (36.7 | ) | | | ||||||||||||||
Other Tier 2
components
(6)
|
| | 0.1 | 0.1 | |||||||||||||||
Total qualifying
capital
|
$ | 9,245.5 | $ | 8,412.4 | $ | 5,091.6 | $ | 2,781.5 | |||||||||||
Risk-weighted
assets
|
$ | 69,610.6 | $ | 55,480.9 | $ | 35,755.3 | $ | 19,552.3 | |||||||||||
Common Equity Tier 1 Capital (to risk-weighted assets):
|
|||||||||||||||||||
Actual
|
12.7 | % | NA | 13.3 | % | NA | |||||||||||||
Effective minimum
ratios under Basel III guidelines
(7)
|
7.0 | % | NA | 7.00 | % | NA | |||||||||||||
Tier 1 Capital (to risk-weighted assets):
|
|||||||||||||||||||
Actual
|
12.7 | % | 14.5 | % | 13.3 | % | 13.0 | % | |||||||||||
Effective minimum
ratios under Basel III guidelines
(7)
|
8.5 | % | 6.0 | % | 8.5 | % | 6.0 | % | |||||||||||
Total Capital (to risk-weighted assets):
|
|||||||||||||||||||
Actual
|
13.3 | % | 15.2 | % | 14.2 | % | 14.2 | % | |||||||||||
Effective minimum
ratios under Basel III guidelines
(7)
|
10.5 | % | 10.0 | % | 10.5 | % | 10.0 | % | |||||||||||
Tier 1 Leverage Ratio:
|
|||||||||||||||||||
Actual
|
15.2 | % | 17.4 | % | 13.5 | % | 12.2 | % | |||||||||||
Required minimum
ratio for capital adequacy purposes
|
4.0 | % | 4.0 | % | 4.0 | % | 4.0 | % |
(1)
|
The September 30, 2015 presentation reflects the risk-based capital guidelines under Basel III, which became effective on January 1, 2015. The December 31, 2014 presentation reflects the risk-based capital guidelines under the then effective Basel I. |
(2)
|
See Consolidated Balance Sheets for the components of Total stockholders equity. |
(3)
|
Goodwill and disallowed intangible assets adjustments also reflect the portion included within assets held for sale. |
(4)
|
Includes the Tier 1 capital charge for nonfinancial equity investments under Basel I. |
(5)
|
Other reserves represents additional credit loss reserves for unfunded lending commitments, letters of credit, and deferred purchase agreements, all of which are recorded in Other Liabilities. |
(6)
|
Banking organizations are permitted to include in Tier 2 Capital up to 45% of net unrealized pretax gains on available-for-sale equity securities with readily determinable fair values. |
(7)
|
Required ratios under the fully phased-in Basel III Final Rule and include the post-transition minimum capital conservation buffer effective January 1, 2019. |
Quarters Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
2015
|
2014
|
||||||||||||||||
Earnings /
(Loss)
|
|||||||||||||||||||
Income from
continuing operations
|
$ | 696.8 | $ | 515.4 | $ | 915.8 | $ | 825.5 | |||||||||||
Income (loss)
from discontinued operation
|
(3.7 | ) | (0.5 | ) | (3.7 | ) | 53.5 | ||||||||||||
Net
income
|
$ | 693.1 | $ | 514.9 | $ | 912.1 | $ | 879.0 | |||||||||||
Weighted
Average Common Shares Outstanding
|
|||||||||||||||||||
Basic shares
outstanding
|
190,557 | 185,190 | 180,300 | 190,465 | |||||||||||||||
Stock-based
awards
(1)
|
1,246 | 1,099 | 1,050 | 968 | |||||||||||||||
Diluted shares
outstanding
|
191,803 | 186,289 | 181,350 | 191,433 | |||||||||||||||
Basic Earnings
Per common share data
|
|||||||||||||||||||
Income from
continuing operations
|
$ | 3.66 | $ | 2.78 | $ | 5.08 | $ | 4.34 | |||||||||||
Income (loss)
from discontinued operation
|
(0.02 | ) | | (0.02 | ) | 0.28 | |||||||||||||
Basic income per
common share
|
$ | 3.64 | $ | 2.78 | $ | 5.06 | $ | 4.62 | |||||||||||
Diluted
Earnings Per common share data
|
|||||||||||||||||||
Income from
continuing operations
|
$ | 3.63 | $ | 2.76 | $ | 5.05 | $ | 4.31 | |||||||||||
Income (loss)
from discontinued operation
|
(0.02 | ) | | (0.02 | ) | $ | 0.28 | ||||||||||||
Diluted income
per common share
|
$ | 3.61 | $ | 2.76 | $ | 5.03 | $ | 4.59 |
(1)
|
Represents the incremental shares from in-the-money non-qualified restricted stock awards, performance shares, and stock options. Weighted average restricted shares, performance shares and options that were out-of-the money and excluded from diluted earnings per share totaled 1.9 million and 1.7 million, for the quarter and nine months ended September 30, 2015. |
Quarters Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
2015
|
2014
|
||||||||||||||||
Rental income on
operating leases
|
$ | 539.3 | $ | 535.0 | $ | 1,601.6 | $ | 1,546.5 | |||||||||||
Other
Income:
|
|||||||||||||||||||
Factoring
commissions
|
30.9 | 31.1 | 87.4 | 88.0 | |||||||||||||||
Gains on sales
of leasing equipment
|
30.7 | 22.0 | 84.2 | 46.4 | |||||||||||||||
Fee
revenues
|
28.3 | 23.6 | 76.2 | 67.0 | |||||||||||||||
Gains on
investments
|
2.0 | 5.3 | 6.5 | 14.4 | |||||||||||||||
Loss on OREO
sales
|
(3.2 | ) | | (3.2 | ) | | |||||||||||||
(Loss) gains
on loan and portfolio sales
|
(14.7 | ) | 9.8 | (6.0 | ) | 17.8 | |||||||||||||
Net losses on
derivatives and foreign currency exchange
|
(20.4 | ) | (22.8 | ) | (35.1 | ) | (21.6 | ) | |||||||||||
Impairment on
assets held for sale
|
(23.6 | ) | (54.1 | ) | (44.7 | ) | (69.5 | ) | |||||||||||
Other
revenues
|
9.2 | 9.3 | 23.8 | 46.5 | |||||||||||||||
Total other
income
|
39.2 | 24.2 | 189.1 | 189.0 | |||||||||||||||
Total
non-interest income
|
$ | 578.5 | $ | 559.2 | $ | 1,790.7 | $ | 1,735.5 |
Quarters Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
2015
|
2014
|
||||||||||||||||
Depreciation on
operating lease equipment
|
$ | (159.1 | ) | $ | (156.4 | ) | $ | (473.7 | ) | $ | (462.5 | ) | |||||||
Maintenance and
other operating lease expenses
|
(55.9 | ) | (46.5 | ) | (151.4 | ) | (147.1 | ) | |||||||||||
Operating
expenses:
|
|||||||||||||||||||
Compensation
and benefits
|
(160.4 | ) | (130.3 | ) | (442.5 | ) | (394.9 | ) | |||||||||||
Professional
fees
|
(57.3 | ) | (22.0 | ) | (97.6 | ) | (56.9 | ) | |||||||||||
Technology
|
(29.9 | ) | (21.2 | ) | (77.1 | ) | (63.1 | ) | |||||||||||
Net occupancy
expense
|
(14.8 | ) | (9.1 | ) | (32.8 | ) | (26.5 | ) | |||||||||||
Advertising
and marketing
|
(7.4 | ) | (7.5 | ) | (23.2 | ) | (23.7 | ) | |||||||||||
Provision for
severance and facilities exiting activities
|
(5.1 | ) | (9.2 | ) | (5.2 | ) | (24.7 | ) | |||||||||||
Intangible assets
amortization
|
(5.0 | ) | (0.4 | ) | (6.1 | ) | (0.5 | ) | |||||||||||
Other
expenses
|
(54.0 | ) | (34.8 | ) | (126.0 | ) | (102.7 | ) | |||||||||||
Total
operating expenses
|
(333.9 | ) | (234.5 | ) | (810.5 | ) | (693.0 | ) | |||||||||||
Loss on debt
extinguishments
|
(0.3 | ) | | (0.4 | ) | (0.4 | ) | ||||||||||||
Total
non-interest expenses
|
$ | (549.2 | ) | $ | (437.4 | ) | $ | (1,436.0 | ) | $ | (1,303.0 | ) |
n
|
$647 million tax benefit recorded in the third quarter corresponding to a reduction to the U.S. federal deferred tax asset valuation allowance after considering the impact on earnings of the OneWest acquisition to support the Companys ability to utilize the U.S. federal net operating losses, |
n
|
$28 million tax expense including interest and penalties recorded in the third quarter related to an uncertain tax position taken on certain prior year international tax returns, |
n
|
$28 million tax expense recorded in the third quarter related to establishment of domestic and international deferred tax liabilities as a result of Managements decision to no longer assert its intent to indefinitely reinvest its unremitted earnings in China, and |
n
|
$9 million tax benefit recorded in the prior quarter corresponding to a reduction of certain tax reserves upon the receipt of a favorable tax ruling on an uncertain tax position taken on prior years tax returns. |
n
|
Separate State filing entities remained in a three year cumulative loss. |
n
|
State NOLs expiration periods vary in time and availability |
Commitments
(dollars in millions)
September 30, 2015
|
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Due to Expire
|
December 31,
2014 |
||||||||||||||||||
Within
One Year |
After
One Year |
Total
Outstanding |
Total
Outstanding |
||||||||||||||||
Financing Commitments
|
|||||||||||||||||||
Financing and
leasing assets
|
$ | 1,674.7 | $ | 5,826.7 | $ | 7,501.4 | $ | 4,747.9 | |||||||||||
Letters of credit
|
|||||||||||||||||||
Standby letters
of credit
|
37.1 | 323.8 | 360.9 | 360.1 | |||||||||||||||
Other letters of
credit
|
17.9 | 0.1 | 18.0 | 28.3 | |||||||||||||||
Guarantees
|
|||||||||||||||||||
Deferred
purchase agreements
|
1,791.6 | | 1,791.6 | 1,854.4 | |||||||||||||||
Guarantees,
acceptances and other recourse obligations
|
1.4 | | 1.4 | 2.8 | |||||||||||||||
Purchase and Funding Commitments
|
|||||||||||||||||||
Aerospace
manufacturer purchase commitments
|
869.0 | 9,444.1 | 10,313.1 | 10,820.4 | |||||||||||||||
Rail and other
manufacturer purchase commitments
|
1,124.8 | 154.5 | 1,279.3 | 1,323.2 |
TIF
|
NAB
|
LCM
|
NSP
|
Corporate &
Other |
Total
CIT |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quarter ended September 30, 2015
|
|||||||||||||||||||||||||||
Interest
income
|
$ | 73.8 | $ | 275.6 | $ | 62.8 | $ | 7.2 | $ | 18.3 | $ | 437.7 | |||||||||||||||
Interest
expense
|
(155.0 | ) | (72.2 | ) | (14.0 | ) | (6.1 | ) | (33.0 | ) | (280.3 | ) | |||||||||||||||
Provision for
credit losses
|
(1.5 | ) | (46.9 | ) | (1.5 | ) | | | (49.9 | ) | |||||||||||||||||
Rental income on
operating leases
|
506.6 | 28.5 | | 4.2 | | 539.3 | |||||||||||||||||||||
Other
income
|
22.9 | 58.2 | (0.9 | ) | (21.8 | ) | (19.2 | ) | 39.2 | ||||||||||||||||||
Depreciation on
operating lease equipment
|
(137.6 | ) | (21.5 | ) | | | | (159.1 | ) | ||||||||||||||||||
Maintenance and
other operating lease expenses
|
(55.9 | ) | | | | | (55.9 | ) | |||||||||||||||||||
Operating
expenses
|
(68.4 | ) | (185.9 | ) | (16.9 | ) | (4.5 | ) | (58.2 | ) | (333.9 | ) | |||||||||||||||
Loss on debt
extinguishments
|
| | | | (0.3 | ) | (0.3 | ) | |||||||||||||||||||
Income (loss)
from continuing operations before (provision) benefit for income taxes
|
$ | 184.9 | $ | 35.8 | $ | 29.5 | $ | (21.0 | ) | $ | (92.4 | ) | $ | 136.8 | |||||||||||||
Quarter ended September 30, 2014
|
|||||||||||||||||||||||||||
Interest
income
|
$ | 68.8 | $ | 215.8 | $ | | $ | 20.4 | $ | 3.3 | $ | 308.3 | |||||||||||||||
Interest
expense
|
(165.3 | ) | (74.2 | ) | | (18.6 | ) | (17.1 | ) | (275.2 | ) | ||||||||||||||||
Provision for
credit losses
|
(9.1 | ) | (29.7 | ) | | 0.7 | (0.1 | ) | (38.2 | ) | |||||||||||||||||
Rental income on
operating leases
|
501.4 | 24.7 | | 8.9 | | 535.0 | |||||||||||||||||||||
Other
income
|
18.8 | 71.1 | | (47.1 | ) | (18.6 | ) | 24.2 | |||||||||||||||||||
Depreciation on
operating lease equipment
|
(132.8 | ) | (20.1 | ) | | (3.5 | ) | | (156.4 | ) | |||||||||||||||||
Maintenance and
other operating lease expenses
|
(46.5 | ) | | | | | (46.5 | ) | |||||||||||||||||||
Operating
expenses
|
(73.8 | ) | (125.9 | ) | | (16.9 | ) | (17.9 | ) | (234.5 | ) | ||||||||||||||||
Income (loss)
from continuing operations before (provision) benefit for income taxes
|
$ | 161.5 | $ | 61.7 | $ | | $ | (56.1 | ) | $ | (50.4 | ) | $ | 116.7 | |||||||||||||
Nine Months Ended September 30, 2015
|
|||||||||||||||||||||||||||
Interest
income
|
$ | 212.1 | $ | 670.7 | $ | 62.8 | $ | 29.7 | $ | 27.2 | $ | 1,002.5 | |||||||||||||||
Interest
expense
|
(488.5 | ) | (219.6 | ) | (14.0 | ) | (26.1 | ) | (68.6 | ) | (816.8 | ) | |||||||||||||||
Provision for
credit losses
|
(11.7 | ) | (89.7 | ) | (1.5 | ) | | | (102.9 | ) | |||||||||||||||||
Rental income on
operating leases
|
1,502.7 | 83.6 | | 15.3 | | 1,601.6 | |||||||||||||||||||||
Other
income
|
73.8 | 193.7 | (0.9 | ) | (35.3 | ) | (42.2 | ) | 189.1 | ||||||||||||||||||
Depreciation on
operating lease equipment
|
(410.4 | ) | (63.3 | ) | | | | (473.7 | ) | ||||||||||||||||||
Maintenance and
other operating lease costs
|
(151.4 | ) | | | | | (151.4 | ) | |||||||||||||||||||
Operating
expenses
|
(227.8 | ) | (456.0 | ) | (16.9 | ) | (27.8 | ) | (82.0 | ) | (810.5 | ) | |||||||||||||||
Loss on debt
extinguishments
|
| | | | (0.4 | ) | (0.4 | ) | |||||||||||||||||||
Income (loss)
from continuing operations before (provisions) benefit for income taxes
|
$ | 498.8 | $ | 119.4 | $ | 29.5 | $ | (44.2 | ) | $ | (166.0 | ) | $ | 437.5 | |||||||||||||
Select Period End Balances
|
|||||||||||||||||||||||||||
Loans
|
$ | 3,305.5 | $ | 23,501.3 | $ | 5,599.4 | $ | | $ | | $ | 32,406.2 | |||||||||||||||
Credit balances
of factoring clients
|
| (1,609.3 | ) | | | | (1,609.3 | ) | |||||||||||||||||||
Assets held for
sale
|
1,047.9 | 990.6 | 36.9 | 78.9 | | 2,154.3 | |||||||||||||||||||||
Operating lease
equipment, net
|
15,287.3 | 250.9 | | | | 15,538.2 |
TIF
|
NAB
|
LCM
|
NSP
|
Corporate &
Other |
Total
CIT |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nine Months Ended September 30, 2014
|
|||||||||||||||||||||||||||
Interest
income
|
$ | 217.7 | $ | 618.0 | $ | | $ | 74.4 | $ | 10.2 | $ | 920.3 | |||||||||||||||
Interest
expense
|
(481.1 | ) | (211.2 | ) | | (66.5 | ) | (50.5 | ) | (809.3 | ) | ||||||||||||||||
Provision for
credit losses
|
(29.8 | ) | (55.5 | ) | | 0.4 | (0.2 | ) | (85.1 | ) | |||||||||||||||||
Rental income on
operating leases
|
1,446.1 | 72.6 | | 27.8 | | 1,546.5 | |||||||||||||||||||||
Other
income
|
36.4 | 202.6 | | (38.8 | ) | (11.2 | ) | 189.0 | |||||||||||||||||||
Depreciation on
operating lease equipment
|
(386.1 | ) | (62.0 | ) | | (14.4 | ) | | (462.5 | ) | |||||||||||||||||
Maintenance and
other operating lease costs
|
(147.1 | ) | | | | | (147.1 | ) | |||||||||||||||||||
Operating
expenses/ loss on debt extinguishment
|
(228.8 | ) | (367.6 | ) | | (56.6 | ) | (40.0 | ) | (693.0 | ) | ||||||||||||||||
Loss on debt
extinguishments
|
| | | | (0.4 | ) | (0.4 | ) | |||||||||||||||||||
Income (loss)
from continuing operations before (provisions) benefit for income taxes
|
$ | 427.3 | $ | 196.9 | $ | | $ | (73.7 | ) | $ | (92.1 | ) | $ | 458.4 | |||||||||||||
Select Period End Balances
|
|||||||||||||||||||||||||||
Loans
|
$ | 3,687.7 | $ | 16,098.0 | $ | | $ | 0.1 | $ | | $ | 19,785.8 | |||||||||||||||
Credit balances
of factoring clients
|
| (1,433.2 | ) | | | | (1,433.2 | ) | |||||||||||||||||||
Assets held for
sale
|
464.7 | 85.3 | | 552.7 | | 1,102.7 | |||||||||||||||||||||
Operating lease
equipment, net
|
14,931.2 | 252.6 | | | | 15,183.8 |
Goodwill
(dollars in millions)
TIF
|
NAB
|
LCM
|
Total
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31,
2014
|
$ | 252.0 | $ | 319.3 | $ | | $ | 571.3 | ||||||||||
Additions
|
| 338.8 | 259.2 | 598.0 | ||||||||||||||
Other
activity
(1)
|
(5.2 | ) | (29.0 | ) | | (34.2 | ) | |||||||||||
September 30,
2015
|
$ | 246.8 | $ | 629.1 | $ | 259.2 | $ | 1,135.1 |
(1)
|
Includes adjustments related to purchase accounting, transfer to held for sale and foreign exchange translation. |
Intangible Assets
(dollars in millions)
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross
Carrying Amount |
Accumulated
Amortization |
Net
Carrying Amount |
Gross
Carrying Amount |
Accumulated
Amortization |
Net
Carrying Amount |
||||||||||||||||||||||
Core deposit
intangibles
|
$ | 126.3 | $ | (3.0 | ) | $ | 123.3 | $ | | $ | | $ | | ||||||||||||||
Trade
names
|
43.6 | (1.8 | ) | 41.8 | 7.4 | (0.5 | ) | 6.9 | |||||||||||||||||||
Customer
relationships
|
27.5 | (1.9 | ) | 25.6 | 7.2 | (0.4 | ) | 6.8 | |||||||||||||||||||
Operating lease
rental intangibles
|
35.4 | (27.8 | ) | 7.6 | 42.7 | (31.2 | ) | 11.5 | |||||||||||||||||||
Other
|
3.4 | (0.4 | ) | 3.0 | 0.5 | | 0.5 | ||||||||||||||||||||
Total intangible
assets
|
$ | 236.2 | $ | (34.9 | ) | $ | 201.3 | $ | 57.8 | $ | (32.1 | ) | $ | 25.7 |
Customer
Relationships |
Core
Deposit Intangibles |
Trade
Names |
Operating
Lease Rental Intangibles |
Other
|
Total
|
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
December 31,
2014
|
$ | 6.8 | $ | | $ | 6.9 | $ | 11.5 | $ | 0.5 | $ | 25.7 | ||||||||||||||
Additions
|
20.3 | 126.3 | 36.4 | | 2.9 | 185.9 | ||||||||||||||||||||
Amortization
(1)
|
(1.5 | ) | (3.0 | ) | (1.3 | ) | 3.6 | (0.4 | ) | (2.6 | ) | |||||||||||||||
Other
(2)
|
| | (0.2 | ) | (7.5 | ) | | (7.7 | ) | |||||||||||||||||
September 30,
2015
|
$ | 25.6 | $ | 123.3 | $ | 41.8 | $ | 7.6 | $ | 3.0 | $ | 201.3 |
(1)
|
Includes amortization recorded in operating expenses and operating lease rental income. |
(2)
|
Includes foreign exchange translation and other miscellaneous adjustments. |
September 30,
2015 |
December 31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Assets:
|
||||||||||
Cash and
deposits
|
$ | 1,034.7 | $ | 1,432.6 | ||||||
Cash held at bank
subsidiary
|
25.4 | 20.3 | ||||||||
Securities
purchased under agreements to resell
|
100.0 | 650.0 | ||||||||
Investment
securities
|
900.0 | 1,104.2 | ||||||||
Receivables from
nonbank subsidiaries
|
8,091.6 | 10,735.2 | ||||||||
Receivables from
bank subsidiaries
|
30.6 | 321.5 | ||||||||
Investment in
nonbank subsidiaries
|
5,745.0 | 6,600.1 | ||||||||
Investment in
bank subsidiaries
|
5,555.7 | 2,716.4 | ||||||||
Goodwill
|
319.6 | 334.6 | ||||||||
Other
assets
|
2,110.9 | 1,625.2 | ||||||||
Total
Assets
|
$ | 23,913.5 | $ | 25,540.1 | ||||||
Liabilities
and Equity:
|
||||||||||
Borrowings
|
$ | 10,725.0 | $ | 11,932.4 | ||||||
Liabilities to
nonbank subsidiaries
|
1,531.1 | 3,924.1 | ||||||||
Other
liabilities
|
858.7 | 614.7 | ||||||||
Total
Liabilities
|
$ | 13,114.8 | $ | 16,471.2 | ||||||
Total
Stockholders Equity
|
10,798.7 | 9,068.9 | ||||||||
Total
Liabilities and Equity
|
$ | 23,913.5 | $ | 25,540.1 |
Nine Months Ended September 30,
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
||||||||||
Income
|
|||||||||||
Interest
income from nonbank subsidiaries
|
$ | 327.7 | $ | 445.5 | |||||||
Interest and
dividends on interest bearing deposits and investments
|
2.9 | 1.6 | |||||||||
Dividends from
bank subsidiaries
|
459.2 | 34.4 | |||||||||
Other income
from subsidiaries
|
(101.7 | ) | (21.4 | ) | |||||||
Other
income
|
70.0 | 51.1 | |||||||||
Total
income
|
758.1 | 511.2 | |||||||||
Expenses
|
|||||||||||
Interest
expense
|
(430.2 | ) | (492.9 | ) | |||||||
Interest
expense on liabilities to subsidiaries
|
(38.7 | ) | (137.0 | ) | |||||||
Other
expenses
|
(160.8 | ) | (141.7 | ) | |||||||
Total
expenses
|
(629.7 | ) | (771.6 | ) | |||||||
Income (loss)
before income taxes and equity in undistributed net income of subsidiaries
|
128.4 | (260.4 | ) | ||||||||
Benefit for
income taxes
|
770.2 | 677.1 | |||||||||
Income before
equity in undistributed net income of subsidiaries
|
898.6 | 416.7 | |||||||||
Equity in
undistributed net income of bank subsidiaries
|
(313.9 | ) | 56.4 | ||||||||
Equity in
undistributed net income of nonbank subsidiaries
|
327.4 | 405.9 | |||||||||
Net
income
|
912.1 | 879.0 | |||||||||
Other
Comprehensive loss, net of tax
|
(40.4 | ) | (8.5 | ) | |||||||
Comprehensive
income
|
$ | 871.7 | $ | 870.5 |
Condensed Parent Company Only Statements of Cash Flows
(dollars in millions)
Nine Months Ended September 30,
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
||||||||||
Cash Flows
From Operating Activities:
|
|||||||||||
Net income
|
$ | 912.1 | $ | 879.0 | |||||||
Equity in
undistributed earnings of subsidiaries
|
(472.6 | ) | (462.3 | ) | |||||||
Other operating
activities, net
|
(583.2 | ) | (610.5 | ) | |||||||
Net cash flows
used in operations
|
(143.7 | ) | (193.8 | ) | |||||||
Cash Flows
From Investing Activities:
|
|||||||||||
(Increase)
decrease in investments and advances to subsidiaries
|
1,074.9 | (105.9 | ) | ||||||||
Acquisitions
|
(1,559.5 | ) | | ||||||||
Decrease
in Investment securities and securities purchased under agreements to resell
|
754.2 | 1,117.2 | |||||||||
Net cash flows
provided by investing activities
|
269.6 | 1,011.3 | |||||||||
Cash Flows
From Financing Activities:
|
|||||||||||
Proceeds from the
issuance of term debt
|
| 991.3 | |||||||||
Repayments of
term debt
|
(1,208.2 | ) | (1,300.0 | ) | |||||||
Repurchase of
common stock
|
(531.8 | ) | (658.0 | ) | |||||||
Dividends
paid
|
(84.4 | ) | (67.4 | ) | |||||||
Net change in
liabilities to subsidiaries
|
1,305.7 | (532.1 | ) | ||||||||
Net cash flows
used in financing activities
|
(518.7 | ) | (1,566.2 | ) | |||||||
Net decrease in
unrestricted cash and cash equivalents
|
(392.8 | ) | (748.7 | ) | |||||||
Unrestricted cash
and cash equivalents, beginning of period
|
1,452.9 | 1,595.5 | |||||||||
Unrestricted cash
and cash equivalents, end of period
|
$ | 1,060.1 | $ | 846.8 |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
Quantitative and Qualitative Disclosures about Market Risk |
n
Account receivables collection
|
n
Equipment leases
|
|||||
n
Acquisition and expansion financing
|
n
Factoring services
|
|||||
n
Advisory services investment and trust
|
n
Financial risk management
|
|||||
n
Asset management and servicing
|
n
Import and export financing
|
|||||
n
Asset-based loans
|
n
Insurance services
|
|||||
n
Credit protection
|
n
Letters of credit / trade acceptances
|
|||||
n
Cash management and payment services
|
n
Mergers and acquisition advisory services (M&A)
|
|||||
n
Debt restructuring
|
n
Private banking
|
|||||
n
Debt underwriting and syndication
|
n
Residential mortgage loans
|
|||||
n
Debtor-in-possession / turnaround financing
|
n
Secured lines of credit
|
|||||
n
Deposits
|
n
Small Business Administration (SBA) loans
|
|||||
n
Enterprise value and cash flow loans
|
Consideration and Net Assets Acquired
(dollars in millions)
Purchase
price
|
$ | 3,391.6 | ||||
Recognized
amounts of identifiable assets
acquired and (liabilities assumed), at fair value |
||||||
Cash and
interest bearing deposits
|
$ | 4,411.6 | ||||
Investment
securities
|
1,297.3 | |||||
Assets held
for sale
|
20.4 | |||||
Loans
HFI
|
13,598.3 | |||||
Indemnification assets
|
480.7 | |||||
Other
assets
|
676.6 | |||||
Assets of
discontinued operations
|
524.4 | |||||
Deposits
|
(14,533.3 | ) | ||||
Borrowings
|
(2,970.3 | ) | ||||
Other
liabilities
|
(221.1 | ) | ||||
Liabilities of
discontinued operations
|
(676.9 | ) | ||||
Total fair value
of identifiable net assets
|
$ | 2,607.7 | ||||
Intangible
assets
|
$ | 185.9 | ||||
Goodwill
|
$ | 598.0 |
Loan Balances at Acquisition Date
(dollars in millions)
Carrying
Value (CV) |
Unpaid
Principal Balance |
CV as a
% of UPB |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
North America
Banking
|
||||||||||||||
Segment
Total
|
||||||||||||||
Loans
|
$ | 7,871.3 | $ | 8,324.5 | 94.6 | % | ||||||||
Assets held
for sale
|
6.3 | 6.3 | 100.0 | % | ||||||||||
Financing and
leasing assets
|
7,877.6 | 8,330.8 | 94.6 | % | ||||||||||
Commercial Banking
|
||||||||||||||
Loans
|
$ | 3,377.0 | $ | 3,610.1 | 93.5 | % | ||||||||
Loans held for
sale
|
0.5 | 0.5 | 100.0 | % | ||||||||||
Financing and
leasing assets
|
3,377.5 | 3,610.6 | 93.5 | % | ||||||||||
Commercial Real Estate
|
||||||||||||||
Loans
|
$ | 3,130.3 | $ | 3,350.2 | 93.4 | % | ||||||||
Financing and
leasing assets
|
3,130.3 | 3,350.2 | 93.4 | % | ||||||||||
Consumer
Banking
|
||||||||||||||
Loans
|
$ | 1,364.0 | $ | 1,364.2 | 100.0 | % | ||||||||
Loans held for
sale
|
5.8 | 5.8 | 100.0 | % | ||||||||||
Financing and
leasing assets
|
1,369.8 | 1,370.0 | 100.0 | % | ||||||||||
Legacy
Consumer Mortgages
(1)
|
||||||||||||||
Segment
Total
|
||||||||||||||
Loans
|
$ | 5,727.0 | $ | 7,426.0 | 77.1 | % | ||||||||
Assets held
for sale
|
14.1 | 14.1 | 100.0 | % | ||||||||||
Financing and
leasing assets
|
5,741.1 | 7,440.1 | 77.2 | % | ||||||||||
Single
Family Residential Mortgages
|
||||||||||||||
Loans
|
$ | 4,834.3 | $ | 6,199.7 | 78.0 | % | ||||||||
Financing and
leasing assets
|
4,834.3 | 6,199.7 | 78.0 | % | ||||||||||
Reverse
Mortgages
(2)
|
||||||||||||||
Loans
|
$ | 892.7 | $ | 1,226.3 | 72.8 | % | ||||||||
Assets held
for sale
|
14.1 | 14.1 | 100.0 | % | ||||||||||
Financing and
leasing assets
|
906.8 | 1,240.4 | 73.1 | % | ||||||||||
Total
|
$ | 13,618.7 | $ | 15,770.9 | 86.4 | % |
(1)
|
Includes $5.1 billion of covered loans. |
(2)
|
Includes Jumbo reverse mortgages, as well as approximately $82 million of HECM reverse mortgages. |
PCI Loans
|
Non-PCI Loans
|
Total
|
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fair Value
|
Unpaid
Principal Balance |
Fair Value
|
Unpaid
Principal Balance |
Fair Value
|
Unpaid
Principal Balance |
||||||||||||||||||||||
Commercial
Banking
|
$ | 101.3 | $ | 149.2 | $ | 3,275.7 | $ | 3,460.9 | $ | 3,377.0 | $ | 3,610.1 | |||||||||||||||
Commercial
Real Estate
|
112.0 | 191.5 | 3,018.3 | 3,158.7 | $ | 3,130.3 | $ | 3,350.2 | |||||||||||||||||||
Consumer
Banking
|
| | 1,364.0 | 1,364.2 | $ | 1,364.0 | $ | 1,364.2 | |||||||||||||||||||
Single Family
Residential Mortgages
|
2,626.2 | 3,830.0 | 2,208.1 | 2,369.7 | $ | 4,834.3 | $ | 6,199.7 | |||||||||||||||||||
Reverse
mortgages
|
77.8 | 92.6 | 814.9 | 1,133.7 | $ | 892.7 | $ | 1,226.3 | |||||||||||||||||||
Total
|
$ | 2,917.3 | $ | 4,263.3 | $ | 10,681.0 | $ | 11,487.2 | $ | 13,598.3 | $ | 15,750.5 |
(1)
|
Table above does not include loan balances that are included in Assets Held for Sale. |
August 3, 2015
|
||||||
---|---|---|---|---|---|---|
Investment tax
credits
|
$ | 134.5 | ||||
Other real
estate owned
|
132.4 | |||||
Deferred federal
and state tax assets
|
125.1 | |||||
Property,
furniture and fixtures
|
61.4 | |||||
FDIC
receivable
|
54.8 | |||||
Other
|
168.4 | |||||
Total other
assets
|
$ | 676.6 |
Acquired Deposits at August 3, 2015
(dollars in millions)
Balance
|
Rate
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Noninterest-bearing checking
|
$ | 898.7 | N/A | |||||||
Interest-bearing
checking
|
3,131.8 | 0.51 | % | |||||||
Money market
accounts
|
3,523.1 | 0.61 | % | |||||||
Savings
|
698.7 | 0.48 | % | |||||||
Other
|
75.3 | N/A | ||||||||
Total checking
and savings deposits
|
8,327.6 | 0.49 | % | |||||||
Certificates of
deposit
|
6,205.7 | 0.96 | % | |||||||
Total
deposits
|
$ | 14,533.3 | 0.69 | % |
(1)
|
Net finance revenue and average earnings assets are non-GAAP measures; see Non-GAAP Financial Measurements for a reconciliation of non-GAAP to GAAP financial information. |
n
|
Financing and leasing assets (FLA), which includes loans, leases and assets held for sale (AHFS), increased to $50.1 billion, up from $35.8 billion at June 30, 2015 and $35.6 billion at December 31, 2014. In addition to the OneWest Bank acquisition of $13.6 billion, FLAs were up in the quarter, reflecting growth in both transportation assets and NAB, which also included a seasonal increase in factoring receivables. |
n
|
Cash ( cash and due from banks and interest bearing deposits ) totaled $8.3 billion, compared to $5.5 billion at June 30, 2015, reflecting $4.4 billion of cash acquired in the OneWest Transaction, partially offset by the payment of $1.9 billion in the OneWest Transaction, and from $7.1 billion at December 31, 2014. |
n
|
Investment securities and securities purchased under resale agreements totaled $3.7 billion at September 30, 2015 compared to $2.2 billion at December 31, 2014, reflecting the $1.3 billion of investment securities acquired in the OneWest Transaction, primarily comprised of MBS. |
n
|
Goodwill and Intangible assets increased due to the addition of $0.6 billion and $0.2 billion, respectively, related to the OneWest Bank acquisition. |
(2)
|
Total assets from continuing operations is a non-GAAP measure. See Non-GAAP Measurements for reconciliation of non-GAAP to GAAP financial information. |
n
|
Other assets of $3.5 billion were up due primarily to the acquisition of OneWest Bank ($677 million of other assets acquired) and the reversal of the U.S. Federal deferred tax asset valuation allowance ($647 million). The components are included in Note 7 Other Assets in Item 1. Consolidated Financial Statements. |
1.
|
Expand Our Commercial Banking Franchise We are integrating our existing banking operations with those of OneWest Bank, and will grow the combined operations. |
n
|
The acquisition added 70 retail branches in Southern California and over $20 billion of assets and $14 billion of deposits. |
n
|
OneWest Bank enhanced our products and service offerings by adding cash management, private banking and related advisory services, and additional lending products, including residential mortgage loans and SBA loans and additional deposit products and capabilities. |
n
|
CIT Bank, N.A. funds most of our U.S. lending and leasing volume. |
2.
|
Maintain Strong Risk Management Practices We will continue to maintain credit discipline focused on appropriate risk-adjusted returns through the business cycle and continue enhancements in select areas to ensure SIFI Readiness. |
n
|
The allowance for loan losses was $335 million (1.03% of finance receivables, 1.22% excluding loans subject to loss sharing agreements with the FDIC) at September 30, 2015, compared to $351 million (1.79%) at June 30, 2015 and $358 million (1.81%) at September 30, 2014. The decline in the percentage of allowance to finance receivables reflects the OneWest Bank acquisition, which added $13.6 billion of loans at fair value with no related allowance at the time of acquisition. Including the impact of the non-accretable principal discount on credit impaired loans, which absorbs credit losses on the discounted loans, the commercial loan allowance to finance receivables was 1.82%, consistent with the year-ago and prior quarters. See discussion in Credit Metrics . |
n
|
We have maintained stable liquidity, with cash, investments, reverse repurchase agreements, and the unused portion of the revolving credit facility at 16.7% of assets. |
n
|
Our capital ratios remained strong, with our Common Equity Tier One 1 Ratio at 12.7%, which exceeds the minimum requirement under the fully phased-in Basel III requirements. |
n
|
We continued the merger of OneWests risk professionals, policies and procedures, platforms, and management information system in further strengthening the combined organization in meeting the enhanced prudential standards applicable to SIFIs. |
3.
|
Grow Business Franchises We will concentrate our growth on building franchises that meet or exceed our risk adjusted return hurdles and improve profitability by exiting non-strategic portfolios, including Canada, China, Brazil and the equipment finance business in the U.K. |
n
|
Financing and leasing assets in the third quarter were up significantly reflecting the acquisition of OneWest Bank. Absent that, FLA were up reflecting continued expansion of both our transportation assets in TIF and loans in NAB, which also included seasonal build in factoring receivables in Commercial Services. |
n
|
We have progressed exiting our remaining non-strategic business in NSP and other segment. In NSP, we sold the Mexico business in August 2015, and expect to close the Brazil transaction in the 2015 fourth quarter after we recently received regulatory approval. In TIF, we signed a definitive agreement to sell the U.K. portfolio, with a possible closing by year end, and have moved our China business to AHFS. We also moved our Canada business within NAB to AHFS during the quarter. |
4.
|
Realize embedded value We will focus on enhancing our economic returns, including: |
n
|
Improving the utilization of our U.S. net operating loss carryforwards (NOLs), thereby reducing the net deferred tax asset and increasing regulatory capital. The OneWest Bank acquisition accelerated the expected NOL utilization, resulting in a $647 million reversal of the valuation allowance against our deferred tax asset in the third quarter. |
n
|
Total cash and investment portfolio is positioned to benefit from increased interest rates. |
n
|
Additional actions to optimize the Bank Holding Company include: transferring additional U.S.-based business platforms into the bank, improving the efficiency of our secured debt facilities, generating incremental cash at the BHC to pay down high cost debt and/or return capital to shareholders and optimizing existing portfolios including exploring strategic alternatives for the Commercial Aerospace portfolio and sales of the Canada and China businesses. |
5.
|
Return Excess Capital We plan to prudently return capital to our shareholders through share repurchases and dividends, while maintaining strong capital ratios. |
n
|
We completed purchasing shares under the most recent repurchase program. We repurchased 3 million of our shares at an average price of $46.28 for an aggregate purchase price of $139 million during the quarter. We repurchased 11.6 million of our shares at an average price of $45.87 for an aggregate purchase price of $532 million for the nine months ended September 30, 2015. |
n
|
We paid dividends of $31 million during the quarter, and $84 million during the nine months ended September 30, 2015. |
n
|
Regulatory capital ratios remain well above required levels on a fully phased-in Basel III basis. |
|
||||
---|---|---|---|---|
KEY PERFORMANCE METRICS
|
|
|
|
MEASUREMENTS
|
Asset
Generation
to originate new business and grow earning assets.
|
New business volumes; and
Earning asset balances.
|
|||
Revenue
Generation
lend money at rates in excess of borrowing costs and consistent with risk profile of obligor, earn rentals on the equipment we
lease commensurate with the risk, and generate other revenue streams.
|
Net finance revenue and other income;
Net finance margin and Operating lease revenue as a percentage of average operating lease
equipment; and
Asset yields and funding costs.
|
|||
Credit Risk
Management
accurately evaluate credit worthiness of customers, maintain high-quality assets and balance income potential with loss
expectations.
|
Net charge-offs, balances and as a percentage of AFR;
Non-accrual loans, balances and as a percentage of
loans;
Classified assets and delinquencies balances; and
Loan loss reserve, balance and as a percentage of loans.
|
|||
Equipment
and Residual Risk Management
appropriately evaluate collateral risk in leasing transactions and remarket or sell equipment at lease
termination.
|
Equipment utilization;
Market value of equipment relative to book value; and
Gains and losses on equipment
sales.
|
|||
Expense
Management
maintain efficient operating platforms and related infrastructure.
|
SG&A expenses and trends;
SG&A expenses as a percentage of AEA; and
Net efficiency ratio.
|
|||
Profitability
generate income and appropriate returns to shareholders.
|
Net income per common share (EPS);
Net income and pre-tax income, each as a percentage of average earning assets (ROA);
and
Pre-tax income as a percentage of average tangible common equity (ROTCE).
|
|||
Capital
Management
maintain a strong capital position, while deploying excess capital.
|
Tier 1 and Total capital ratios; and
Tier 1 capital as a percentage of adjusted average assets; (Tier 1 Leverage
Ratio).
|
|||
Liquidity
Management
maintain access to ample funding at competitive rates to meet obligations as they come due.
|
Levels of high quality liquid assets and as a % of total assets;
Committed and available funding facilities;
Debt
maturity profile and ratings;
Funding mix; and
Deposit generation.
|
|||
Manage
Market Risk
measure and manage risk to income statement and economic value of enterprise due to movements in interest and foreign currency
exchange rates.
|
Net Interest Income Sensitivity; and
Economic Value of Equity (EVE).
|
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Interest
income
|
$ | 437.7 | $ | 283.8 | $ | 308.3 | $ | 1,002.5 | $ | 920.3 | |||||||||||||
Rental income on
operating leases
|
539.3 | 531.7 | 535.0 | 1,601.6 | 1,546.5 | ||||||||||||||||||
Finance
revenue
|
977.0 | 815.5 | 843.3 | 2,604.1 | 2,466.8 | ||||||||||||||||||
Interest
expense
|
(280.3 | ) | (265.2 | ) | (275.2 | ) | (816.8 | ) | (809.3 | ) | |||||||||||||
Depreciation on
operating lease equipment
|
(159.1 | ) | (157.8 | ) | (156.4 | ) | (473.7 | ) | (462.5 | ) | |||||||||||||
Maintenance and
other operating lease expenses
|
(55.9 | ) | (49.4 | ) | (46.5 | ) | (151.4 | ) | (147.1 | ) | |||||||||||||
Net finance
revenue
|
$ | 481.7 | $ | 343.1 | $ | 365.2 | $ | 1,162.2 | $ | 1,047.9 | |||||||||||||
Average Earning
Assets
(1)(2)
(AEA)
|
$ | 52,448.1 | $ | 41,159.3 | $ | 40,973.8 | $ | 45,142.9 | $ | 40,266.4 | |||||||||||||
Net finance
margin
|
3.67 | % | 3.33 | % | 3.57 | % | 3.43 | % | 3.47 | % |
(1)
|
NFR and AEA are non-GAAP measures; see reconciliation of non-GAAP to GAAP financial information. |
(2)
|
As noted below, AEA components have changed in the third quarter. All prior periods have been conformed to the current presentation. AEA balances are less than comparable balances displayed in this document in Select Data (Quarterly Average Balances) due to the inclusion of credit balances of factoring clients. |
September 30, 2015
|
June 30, 2015
|
September 30, 2014
|
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Average
Balance |
Revenue /
Expense |
Average
Rate (%) |
Average
Balance |
Revenue /
Expense |
Average
Rate (%) |
Average
Balance |
Revenue /
Expense |
Average
Rate (%) |
|||||||||||||||||||||||||||||||
Interest
bearing deposits
|
$ | 5,812.4 | $ | 4.5 | 0.31 | % | $ | 4,829.4 | $ | 3.4 | 0.28 | % | $ | 5,517.4 | $ | 4.4 | 0.32 | % | |||||||||||||||||||||
Securities purchased under agreements to resell
|
387.5 | 0.6 | 0.62 | % | 675.0 | 1.0 | 0.59 | % | 275.0 | 0.4 | 0.58 | % | |||||||||||||||||||||||||||
Investments
|
2,663.2 | 18.4 | 2.76 | % | 1,510.6 | 4.6 | 1.22 | % | 860.9 | 3.6 | 1.67 | % | |||||||||||||||||||||||||||
Loans
(including held for sale and credit balances of factoring clients)
(2)(3)
|
27,834.3 | 413.9 | 5.95 | % | 18,863.1 | 274.8 | 5.83 | % | 18,861.6 | 299.9 | 6.36 | % | |||||||||||||||||||||||||||
Operating
lease equipment, net (including held for sale)
(4)
|
15,445.1 | 324.3 | 8.40 | % | 15,281.2 | 324.5 | 8.49 | % | 15,178.4 | 332.1 | 8.75 | % | |||||||||||||||||||||||||||
Indemnification assets
|
305.6 | 0.3 | 0.39 | % | | | | | | ||||||||||||||||||||||||||||||
Average earning assets
(2)
|
$ | 52,448.1 | 762.0 | 5.81 | % | $ | 41,159.3 | 608.3 | 5.91 | % | $ | 40,693.3 | 640.4 | 6.29 | % | ||||||||||||||||||||||||
Deposits
|
$ | 26,356.2 | $ | 93.1 | 1.41 | % | $ | 16,934.9 | $ | 72.2 | 1.71 | % | $ | 14,223.6 | $ | 59.2 | 1.66 | % | |||||||||||||||||||||
Borrowings
(5)
|
18,258.3 | 187.2 | 4.10 | % | 16,540.3 | 193.0 | 4.67 | % | 18,430.3 | 216.0 | 4.69 | % | |||||||||||||||||||||||||||
Total
interest-bearing liabilities
|
$ | 44,614.5 | 280.3 | 2.51 | % | $ | 33,475.2 | 265.2 | 3.17 | % | $ | 32,653.9 | 275.2 | 3.37 | % | ||||||||||||||||||||||||
NFR and
NFM
|
$ | 481.7 | 3.67 | % | $ | 343.1 | 3.33 | % | $ | 365.2 | 3.59 | % |
Year Over Year
Quarterly Comparison
|
Sequential Quarterly
Comparison
|
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Increase (Decrease)
Due to Change In: |
Increase (Decrease)
Due to Change In: |
||||||||||||||||||||||||||
Volume
|
Rate
|
Net
|
Volume
|
Rate
|
Net
|
||||||||||||||||||||||
Interest
bearing deposits
|
$ | 0.2 | $ | (0.1 | ) | $ | 0.1 | $ | 0.8 | $ | 0.3 | $ | 1.1 | ||||||||||||||
Securities purchased under agreements to resell
|
0.2 | | 0.2 | (0.4 | ) | | (0.4 | ) | |||||||||||||||||||
Investments
|
5.4 | 9.4 | 14.8 | 8.0 | 5.8 | 13.8 | |||||||||||||||||||||
Loans
(including held for sale and net of credit balances of factoring clients)
(2)(3)
|
112.0 | 2.0 | 114.0 | 127.2 | 11.9 | 139.1 | |||||||||||||||||||||
Operating
lease equipment, net (including held for sale)
(4)
|
5.7 | (13.5 | ) | (7.8 | ) | 3.8 | (4.0 | ) | (0.2 | ) | |||||||||||||||||
Indemnification assets
|
0.3 | | 0.3 | 0.3 | | 0.3 | |||||||||||||||||||||
Total
earning assets
(2)
|
$ | 123.8 | $ | (2.2 | ) | $ | 121.6 | $ | 139.7 | $ | 14.0 | $ | 153.7 | ||||||||||||||
Deposits
|
$ | 52.2 | $ | (18.3 | ) | $ | 33.9 | $ | 33.0 | $ | (12.1 | ) | $ | 20.9 | |||||||||||||
Borrowings
(5)
|
(2.0 | ) | (26.8 | ) | (28.8 | ) | 17.7 | (23.5 | ) | (5.8 | ) | ||||||||||||||||
Total
interest-bearing liabilities
|
$ | 50.2 | $ | (45.1 | ) | $ | 5.1 | $ | 50.7 | $ | (35.6 | ) | $ | 15.1 |
Nine Months
Ended
|
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September
30, 2015
|
September
30, 2014
|
||||||||||||||||||||||||||
Average
Balance |
Revenue /
Expense |
Average
Rate (%) |
Average
Balance |
Revenue /
Expense |
Average
Rate (%) |
||||||||||||||||||||||
Interest
bearing deposits
|
$ | 5,499.0 | $ | 11.9 | 0.29 | % | $ | 5,138.7 | $ | 13.5 | 0.35 | % | |||||||||||||||
Securities purchased under agreements to resell
|
535.0 | 2.3 | 0.57 | % | 110.0 | 0.4 | 0.48 | % | |||||||||||||||||||
Investments
|
1,911.3 | 26.9 | 1.88 | % | 1,850.8 | 11.7 | 0.84 | % | |||||||||||||||||||
Loans
(including held for sale and net of credit balances of factoring clients)
(2)(3)
|
21,784.7 | 961.1 | 5.88 | % | 18,590.6 | 894.7 | 6.42 | % | |||||||||||||||||||
Operating
lease equipment, net (including held for sale)
(4)
|
15,309.9 | 976.5 | 8.50 | % | 14,573.0 | 936.9 | 8.57 | % | |||||||||||||||||||
Indemnification assets
|
103.0 | 0.3 | 0.39 | % | | | | ||||||||||||||||||||
Total
earning assets
(2)
|
$ | 45,142.9 | $ | 1,979.0 | 5.85 | % | $ | 40,263.1 | 1,857.2 | 6.15 | % | ||||||||||||||||
Deposits
|
$ | 19,911.2 | $ | 234.3 | 1.57 | % | $ | 13,544.9 | $ | 167.2 | 1.65 | % | |||||||||||||||
Borrowings
(5)
|
17,527.6 | 582.5 | 4.43 | % | 18,566.0 | 642.1 | 4.61 | % | |||||||||||||||||||
Total
interest-bearing liabilities
|
$ | 37,438.8 | 816.8 | 2.91 | % | $ | 32,110.9 | 809.3 | 3.36 | % | |||||||||||||||||
NFR and
NFM
|
$ | 1,162.2 | 3.43 | % | $ | 1,047.9 | 3.47 | % |
Year Over
Year Comparison
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Increase (Decrease)
Due To Change In: |
|||||||||||||||
Volume
|
Rate
|
Net
|
|||||||||||||
Interest bearing
deposits
|
$ | 0.8 | $ | (2.4 | ) | $ | (1.6 | ) | |||||||
Securities
purchased under agreements to resell
|
1.8 | 0.1 | 1.9 | ||||||||||||
Investments
|
0.9 | 14.3 | 15.2 | ||||||||||||
Loans (including
held for sale)
(2)(3)
|
102.5 | (36.1 | ) | 66.4 | |||||||||||
Operating lease
equipment, net (including held for sale)
(4)
|
46.1 | (6.5 | ) | 39.6 | |||||||||||
Indemnification
assets
|
0.3 | | 0.3 | ||||||||||||
Total earning
assets
(2)
|
$ | 152.4 | $ | (30.6 | ) | $ | 121.8 | ||||||||
Deposits
|
$ | 75.1 | $ | (8.0 | ) | $ | 67.1 | ||||||||
Borrowings
(5)
|
(34.5 | ) | (25.1 | ) | (59.6 | ) | |||||||||
Total
interest-bearing liabilities
|
$ | 40.6 | $ | (33.1 | ) | $ | 7.5 |
(1)
|
The average balances presented are derived based on month end balances during the year. Tax exempt income was not significant in any of the years presented. Average rates are impacted by FSA accretion and amortization. |
(2)
|
The average balance and rate presented is calculated net of average credit balances for factoring clients. |
(3)
|
Non-accrual loans and related income are included in the respective categories. |
(4)
|
Operating lease rental income is a significant source of revenue; therefore, we have presented the rental revenues net of depreciation and net of Maintenance and other operating lease expenses. |
(5)
|
Interest and average rates include FSA accretion, including amounts accelerated due to redemptions or extinguishments, and accelerated original issue discount on debt extinguishment related to the GSI facility. |
Quarter Ended
September 30, 2015 |
Quarter Ended
June 30, 2015 |
Quarter Ended
September 30, 2014 |
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Average
Balance |
Interest
Expense |
Rate %
|
Average
Balance |
Interest
Expense |
Rate %
|
Average
Balance |
Interest
Expense |
Rate %
|
|||||||||||||||||||||||||||||||
Deposits
|
|||||||||||||||||||||||||||||||||||||||
CDs
|
$ | 15,566.7 | $ | 71.2 | 1.83 | % | $ | 11,019.4 | $ | 57.7 | 2.09 | % | $ | 8,740.3 | $ | 46.0 | 2.11 | % | |||||||||||||||||||||
Interest-bearing checking
|
2,037.6 | 2.6 | 0.51 | % | | | | | | | |||||||||||||||||||||||||||||
Savings
|
4,472.8 | 11.0 | 0.98 | % | 3,945.4 | 9.8 | 0.99 | % | 3,564.0 | 8.5 | 0.95 | % | |||||||||||||||||||||||||||
Money
markets
|
4,143.2 | 8.5 | 0.82 | % | 1,879.7 | 4.9 | 1.04 | % | 1,853.0 | 4.7 | 1.01 | % | |||||||||||||||||||||||||||
Total
deposits*
|
26,220.3 | 93.3 | 1.42 | % | 16,844.5 | 72.4 | 1.72 | % | 14,157.3 | 59.2 | 1.67 | % | |||||||||||||||||||||||||||
Borrowings
|
|||||||||||||||||||||||||||||||||||||||
Unsecured notes
|
10,730.9 | 138.7 | 5.17 | % | 10,732.7 | 138.6 | 5.17 | % | 12,232.1 | 156.8 | 5.13 | % | |||||||||||||||||||||||||||
Structured financings
|
5,532.7 | 46.8 | 3.38 | % | 5,702.0 | 54.3 | 3.81 | % | 5,962.4 | 59.0 | 3.96 | % | |||||||||||||||||||||||||||
FHLB
advances
|
1,994.7 | 1.7 | 0.34 | % | 105.6 | 0.1 | 0.38 | % | 235.8 | 0.2 | 0.34 | % | |||||||||||||||||||||||||||
Total
borrowings
|
18,258.3 | 187.2 | 4.10 | % | 16,540.3 | 193.0 | 4.67 | % | 18,430.3 | 216.0 | 4.69 | % | |||||||||||||||||||||||||||
Total
interest-bearing liabilities*
|
$ | 44,478.6 | $ | 280.5 | 2.52 | % | $ | 33,384.8 | $ | 265.4 | 3.18 | % | $ | 32,587.6 | $ | 275.2 | 3.38 | % |
*
|
Excludes certain deposits such as escrow accounts, security deposits, and other similar accounts, therefore totals may differ from other average balances included in this document. |
Select Segment and Division Margin Metrics
(dollars in millions)
Quarters
Ended
|
Nine
Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September
30,
2015 |
June
30,
2015 |
September
30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Transportation & International Finance
|
|||||||||||||||||||||||
AEA
|
$ | 20,068.4 | $ | 20,155.6 | $ | 19,893.7 | $ | 20,143.9 | $ | 18,969.1 | |||||||||||||
Gross
yield
|
11.57 | % | 11.28 | % | 11.46 | % | 11.35 | % | 11.69 | % | |||||||||||||
NFM
|
4.62 | % | 4.32 | % | 4.54 | % | 4.40 | % | 4.57 | % | |||||||||||||
AEA
|
|||||||||||||||||||||||
Aerospace
|
$ | 11,251.2 | $ | 11,643.3 | $ | 11,658.7 | $ | 11,614.1 | $ | 11,017.5 | |||||||||||||
Rail
|
6,314.7 | 6,115.3 | 5,855.8 | 6,123.3 | 5,572.8 | ||||||||||||||||||
Maritime
Finance
|
1,443.3 | 1,198.5 | 702.9 | 1,234.7 | 589.4 | ||||||||||||||||||
International
Finance
|
1,059.2 | 1,198.5 | 1,676.3 | 1,171.8 | 1,789.4 | ||||||||||||||||||
Gross
yield
|
|||||||||||||||||||||||
Aerospace
|
10.98 | % | 10.41 | % | 10.87 | % | 10.58 | % | 11.33 | % | |||||||||||||
Rail
|
14.50 | % | 14.65 | % | 14.41 | % | 14.58 | % | 14.34 | % | |||||||||||||
Maritime
Finance
|
5.04 | % | 5.12 | % | 5.00 | % | 5.04 | % | 5.11 | % | |||||||||||||
International
Finance
|
9.25 | % | 8.77 | % | 8.08 | % | 8.77 | % | 7.91 | % | |||||||||||||
North
America Banking
|
|||||||||||||||||||||||
AEA
|
$ | 20,808.0 | $ | 15,396.7 | $ | 15,745.5 | $ | 17,154.5 | $ | 14,940.6 | |||||||||||||
Gross
yield
|
5.85 | % | 5.89 | % | 6.11 | % | 5.86 | % | 6.16 | % | |||||||||||||
NFM
|
4.04 | % | 3.44 | % | 3.71 | % | 3.66 | % | 3.72 | % | |||||||||||||
AEA
|
|||||||||||||||||||||||
Commercial
Banking
|
$ | 9,456.9 | $ | 7,031.7 | $ | 7,430.5 | $ | 7,835.4 | $ | 7,334.8 | |||||||||||||
Commercial Real
Estate
|
3,993.9 | 1,860.6 | 1,727.4 | 2,552.9 | 1,660.3 | ||||||||||||||||||
Equipment
Finance
|
5,657.4 | 5,568.2 | 5,539.7 | 5,585.5 | 4,925.6 | ||||||||||||||||||
Commercial
Services
|
833.0 | 936.2 | 1,047.9 | 888.6 | 1,019.9 | ||||||||||||||||||
Consumer
Banking
|
866.8 | | | 292.1 | | ||||||||||||||||||
Gross
yield
|
|||||||||||||||||||||||
Commercial
Banking
|
4.86 | % | 4.43 | % | 5.15 | % | 4.60 | % | 5.21 | % | |||||||||||||
Commercial Real
Estate
|
5.09 | % | 4.00 | % | 4.30 | % | 4.54 | % | 4.14 | % | |||||||||||||
Equipment
Finance
|
8.47 | % | 8.61 | % | 8.03 | % | 8.52 | % | 8.49 | % | |||||||||||||
Commercial
Services
|
5.22 | % | 4.53 | % | 5.76 | % | 4.83 | % | 5.06 | % | |||||||||||||
Consumer
Banking
|
3.58 | % | | | 3.55 | % | | ||||||||||||||||
Legacy
Consumer Mortgages
|
|||||||||||||||||||||||
AEA
|
$ | 3,912.6 | $ | | $ | | $ | 1,318.5 | $ | | |||||||||||||
Gross
yield
|
6.42 | % | | | 6.35 | % | | ||||||||||||||||
NFM
|
4.99 | % | $ | | $ | | 4.94 | % | $ | | |||||||||||||
AEA
|
|||||||||||||||||||||||
SFR mortgage
loans
|
$ | 3,321.9 | $ | | $ | | $ | 1,119.5 | $ | | |||||||||||||
Reverse mortgage
loans
|
$ | 590.7 | $ | | $ | | $ | 199.0 | $ | | |||||||||||||
Gross
yield
|
|||||||||||||||||||||||
SFR mortgage
loans
|
5.68 | % | | | 5.61 | % | | ||||||||||||||||
Reverse mortgage
loans
|
10.59 | % | | | 10.47 | % | | ||||||||||||||||
Non-Strategic Portfolios
|
|||||||||||||||||||||||
AEA
|
$ | 312.3 | $ | 464.6 | $ | 1,027.4 | $ | 430.1 | $ | 1,324.3 | |||||||||||||
Gross
yield
|
14.60 | % | 13.26 | % | 11.41 | % | 13.95 | % | 10.29 | % | |||||||||||||
NFM
|
6.79 | % | 5.34 | % | 2.80 | % | 5.86 | % | 2.14 | % |
Quarters
Ended
|
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September
30, 2015
|
June 30,
2015
|
September
30, 2014
|
|||||||||||||||||||||||||
Rental income on
operating leases
|
$ | 539.3 | 14.14 | % | $ | 531.7 | 14.19 | % | $ | 535.0 | 14.28 | % | |||||||||||||||
Depreciation on
operating lease equipment
|
(159.1 | ) | (4.17 | %) | (157.8 | ) | (4.21 | %) | (156.4 | ) | (4.17 | %) | |||||||||||||||
Maintenance and
other operating lease expenses
|
(55.9 | ) | (1.47 | %) | (49.4 | ) | (1.32 | %) | (46.5 | ) | (1.24 | %) | |||||||||||||||
Net operating
lease revenue
|
$ | 324.3 | 8.50 | % | $ | 324.5 | 8.66 | % | $ | 332.1 | 8.87 | % | |||||||||||||||
Average
Operating Lease Equipment (AOL)
|
$ | 15,251.8 | $ | 14,990.7 | $ | 14,984.6 |
Nine Months
Ended September 30,
|
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2014
|
||||||||||||||||||||||||||
Rental income on
operating leases
|
$ | 1,601.6 | 14.19 | % | $ | 1,546.5 | 14.31 | % | |||||||||||||||||||
Depreciation on
operating lease equipment
|
(473.7 | ) | (4.20 | %) | (462.5 | ) | (4.28 | %) | |||||||||||||||||||
Maintenance and
other operating lease expenses
|
(151.4 | ) | (1.34 | %) | (147.1 | ) | (1.36 | %) | |||||||||||||||||||
Net operating
lease revenue
|
$ | 976.5 | 8.65 | % | $ | 936.9 | 8.67 | % | |||||||||||||||||||
Average
Operating Lease Equipment (AOL)
|
$ | 15,053.4 | $ | 14,410.9 |
Allowance for Loan Losses and Provision for Credit Losses
(dollars in millions)
Quarters
Ended
|
Nine
Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September
30,
2015 |
June
30,
2015 |
September
30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Allowance
beginning of period
|
$ | 350.9 | $ | 356.5 | $ | 341.0 | $ | 346.4 | $ | 356.1 | |||||||||||||
Total provision
for credit losses
|
49.9 | 18.4 | 38.2 | 102.9 | 85.1 | ||||||||||||||||||
Other
(1)
|
(4.5 | ) | (0.5 | ) | (2.3 | ) | (8.6 | ) | (7.5 | ) | |||||||||||||
Net
additions
|
45.4 | 17.9 | 35.9 | 94.3 | 77.6 | ||||||||||||||||||
Gross
charge-offs
(2)
|
(67.4 | ) | (34.2 | ) | (25.2 | ) | (128.2 | ) | (98.7 | ) | |||||||||||||
Recoveries
|
6.1 | 10.7 | 6.0 | 22.5 | 22.7 | ||||||||||||||||||
Net
Charge-offs
|
(61.3 | ) | (23.5 | ) | (19.2 | ) | (105.7 | ) | (76.0 | ) | |||||||||||||
Allowance
end of period
|
$ | 335.0 | $ | 350.9 | $ | 357.7 | $ | 335.0 | $ | 357.7 | |||||||||||||
Loans
|
|||||||||||||||||||||||
Transportation
& International Finance
|
$ | 3,305.5 | $ | 3,717.1 | $ | 3,687.7 | |||||||||||||||||
North America
Banking
|
23,501.3 | 15,932.2 | 16,098.0 | ||||||||||||||||||||
Legacy Consumer
Mortgages
|
5,599.4 | | | ||||||||||||||||||||
Non-Strategic
Portfolios
|
| | 0.1 | ||||||||||||||||||||
Total
loans
|
$ | 32,406.2 | $ | 19,649.3 | $ | 19,785.8 | |||||||||||||||||
Allowance
|
|||||||||||||||||||||||
Transportation
& International Finance
|
$ | 31.8 | $ | 58.0 | $ | 46.5 | |||||||||||||||||
North America
Banking
|
302.8 | 292.9 | 311.2 | ||||||||||||||||||||
Legacy Consumer
Mortgages
|
0.4 | | | ||||||||||||||||||||
Total
allowance
|
$ | 335.0 | $ | 350.9 | $ | 357.7 |
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Provision for Credit Losses |
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
||||||||||||||||||
Specific reserves
on impaired loans
|
$ | 9.5 | $ | 2.7 | $ | 3.3 | $ | 14.5 | $ | (4.9 | ) | ||||||||||||
Non-specific
reserves
|
(20.9 | ) | (7.8 | ) | 15.7 | (17.3 | ) | 14.0 | |||||||||||||||
Net
charge-offs
|
61.3 | 23.5 | 19.2 | 105.7 | 76.0 | ||||||||||||||||||
Total
|
$ | 49.9 | $ | 18.4 | $ | 38.2 | $ | 102.9 | $ | 85.1 |
Allowance for Loan
Losses
|
September 30, | June 30, | September 30, | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2015
|
2015
|
2014
|
|
|
||||||||||||||||||
Specific reserves
on impaired loans
|
$ | 18.3 | $ | 17.5 | $ | 25.5 | ||||||||||||||||
Non-specific
reserves
|
316.7 | 333.4 | 332.2 | |||||||||||||||||||
Total
|
$ | 335.0 | $ | 350.9 | $ | 357.7 | ||||||||||||||||
Ratio
|
||||||||||||||||||||||
Allowance for
loan losses as a percentage of total loans
|
1.03 | % | 1.79 | % | 1.81 | % | ||||||||||||||||
Allowance for
loan losses as a percent of finance receivable/commercial
|
1.31 | % | 1.79 | % | 1.81 | % | ||||||||||||||||
Allowance for loan
losses plus principal loss discount as a percent of finance receivables (before the principal loss discount)/commercial
|
1.82 | % | 1.79 | % | 1.81 | % | ||||||||||||||||
Allowance for
loan losses as a percent of finance receivables/consumer
|
11.27 | % | | |
(1)
|
Includes amounts related to reserves on unfunded loan commitments and letters of credit, and for deferred purchase agreements, which are reflected in Other Liabilities, as well as foreign currency translation adjustments. These Other Liabilities totaled $41 million, $37 million and $33 million at September 30, 2015, June 30, 2015 and September 30, 2014, respectively. |
(2)
|
Gross charge-offs of $40 million, $2 million and $11 million for the quarters ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively, related to the transfer of receivables to assets held for sale. For the nine months ended September 30, 2015 and 2014, gross charge-offs include $53 million and $36 million, respectively, related to the transfer of receivables to assets held for sale. |
Quarters Ended
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2015
|
June 30, 2015
|
September 30, 2014
|
2015
|
2014
|
|||||||||||||||||||||||||||||||||||||||
Gross Charge-offs
|
|||||||||||||||||||||||||||||||||||||||||||
Transportation
Finance
|
$ | 0.1 | 0.01 | % | $ | 0.6 | 0.08 | % | $ | 0.7 | 0.12 | % | $ | 0.8 | 0.03 | % | $ | 0.7 | 0.04 | % | |||||||||||||||||||||||
International
Finance
|
28.2 | 20.10 | % | 2.3 | 1.52 | % | 3.8 | 1.39 | % | 33.6 | 8.98 | % | 34.0 | 3.14 | % | ||||||||||||||||||||||||||||
Transportation
& International Finance |
28.3 | 2.97 | % | 2.9 | 0.32 | % | 4.5 | 0.52 | % | 34.4 | 1.27 | % | 34.7 | 1.31 | % | ||||||||||||||||||||||||||||
Commercial
Banking
|
9.5 | 0.41 | % | 17.0 | 0.99 | % | 12.0 | 0.66 | % | 37.5 | 0.65 | % | 26.4 | 0.50 | % | ||||||||||||||||||||||||||||
Equipment
Finance
|
27.2 | 2.28 | % | 10.6 | 0.89 | % | 8.0 | 0.69 | % | 49.7 | 1.41 | % | 25.5 | 0.83 | % | ||||||||||||||||||||||||||||
Commercial
Services
|
0.9 | 0.15 | % | 3.7 | 0.62 | % | 0.7 | 0.11 | % | 5.1 | 0.28 | % | 4.6 | 0.26 | % | ||||||||||||||||||||||||||||
North America
Banking
|
37.6 | 0.71 | % | 31.3 | 0.79 | % | 20.7 | 0.52 | % | 92.3 | 0.70 | % | 56.5 | 0.50 | % | ||||||||||||||||||||||||||||
Legacy Consumer
Mortgages |
1.5 | 0.16 | % | | | | | 1.5 | 0.16 | % | | | |||||||||||||||||||||||||||||||
Non-Strategic
Portfolios
|
| | | | | | | | 7.5 | 5.04 | % | ||||||||||||||||||||||||||||||||
Total
|
$ | 67.4 | 0.94 | % | $ | 34.2 | 0.70 | % | $ | 25.2 | 0.52 | % | $ | 128.2 | 0.76 | % | $ | 98.7 | 0.69 | % | |||||||||||||||||||||||
Recoveries
|
|||||||||||||||||||||||||||||||||||||||||||
Transportation
Finance
|
$ | | | $ | | | $ | | | $ | 0.1 | | $ | 0.2 | 0.01 | % | |||||||||||||||||||||||||||
International
Finance
|
1.1 | 0.74 | % | 5.6 | 3.64 | % | 0.6 | 0.25 | % | 8.3 | 2.04 | % | 4.5 | 0.42 | % | ||||||||||||||||||||||||||||
Transportation
& International Finance |
1.1 | 0.11 | % | 5.6 | 0.61 | % | 0.6 | 0.08 | % | 8.4 | 0.31 | % | 4.7 | 0.18 | % | ||||||||||||||||||||||||||||
Commercial
Banking
|
0.6 | 0.02 | % | 1.2 | 0.07 | % | | | 1.8 | 0.03 | % | 0.5 | 0.02 | % | |||||||||||||||||||||||||||||
Equipment
Finance
|
3.7 | 0.30 | % | 3.5 | 0.30 | % | 4.4 | 0.38 | % | 10.9 | 0.80 | % | 13.1 | 0.43 | % | ||||||||||||||||||||||||||||
Commercial
Services
|
0.4 | 0.07 | % | 0.4 | 0.05 | % | 0.3 | 0.04 | % | 1.1 | 0.06 | % | 2.1 | 0.11 | % | ||||||||||||||||||||||||||||
North America
Banking
|
4.7 | 0.09 | % | 5.1 | 0.13 | % | 4.7 | 0.12 | % | 13.8 | 0.10 | % | 15.7 | 0.14 | % | ||||||||||||||||||||||||||||
Legacy
Consumer
Mortgages |
0.3 | 0.04 | % | | | | | 0.3 | 0.03 | % | | | |||||||||||||||||||||||||||||||
Non-Strategic
Portfolios
|
| | | | 0.7 | NM | | | 2.3 | 1.48 | % | ||||||||||||||||||||||||||||||||
Total
|
$ | 6.1 | 0.08 | % | $ | 10.7 | 0.22 | % | $ | 6.0 | 0.13 | % | $ | 22.5 | 0.13 | % | $ | 22.7 | 0.16 | % | |||||||||||||||||||||||
Net Charge-offs
(1)
|
|||||||||||||||||||||||||||||||||||||||||||
Transportation
Finance
|
$ | 0.1 | 0.01 | % | $ | 0.6 | 0.08 | % | $ | 0.7 | 0.12 | % | $ | 0.7 | 0.03 | % | $ | 0.5 | 0.03 | % | |||||||||||||||||||||||
International
Finance
|
27.1 | 19.36 | % | (3.3 | ) | (2.12 | )% | 3.2 | 1.14 | % | 25.3 | 6.26 | % | 29.5 | 2.72 | % | |||||||||||||||||||||||||||
Transportation
& International Finance |
27.2 | 2.86 | % | (2.7 | ) | (0.29 | )% | 3.9 | 0.44 | % | 26.0 | 0.96 | % | 30.0 | 1.13 | % | |||||||||||||||||||||||||||
Commercial
Banking
|
8.9 | 0.39 | % | 15.8 | 0.92 | % | 12.0 | 0.66 | % | 35.7 | 0.62 | % | 25.9 | 0.48 | % | ||||||||||||||||||||||||||||
Equipment
Finance
|
23.5 | 1.98 | % | 7.1 | 0.59 | % | 3.6 | 0.31 | % | 38.8 | 1.11 | % | 12.4 | 0.40 | % | ||||||||||||||||||||||||||||
Commercial
Services
|
0.5 | 0.08 | % | 3.3 | 0.57 | % | 0.4 | 0.07 | % | 4.0 | 0.22 | % | 2.5 | 0.15 | % | ||||||||||||||||||||||||||||
North America
Banking
|
32.9 | 0.62 | % | 26.2 | 0.66 | % | 16.0 | 0.40 | % | 78.5 | 0.60 | % | 40.8 | 0.36 | % | ||||||||||||||||||||||||||||
Legacy
Consumer
Mortgages |
1.2 | 0.12 | % | | | | | 1.2 | 0.13 | % | | | |||||||||||||||||||||||||||||||
Non-Strategic
Portfolios
|
| | | | (0.7 | ) | NM | | | 5.2 | 3.56 | % | |||||||||||||||||||||||||||||||
Total
|
$ | 61.3 | 0.86 | % | $ | 23.5 | 0.48 | % | $ | 19.2 | 0.39 | % | $ | 105.7 | 0.63 | % | $ | 76.0 | 0.53 | % |
(1)
|
TIF charge-offs related to the transfer of receivables to assets held for sale for the quarter ended September 30, 2015 totaled $26 million, and was less than $1 million each of the first two quarters. TIF charge-offs for the nine months ended September 30, 2014 included $12 million, related to the transfer of receivables to assets held for sale. NAB charge-offs for the quarters ended September 30, 2015 and June 30, 2015 included $14 million and $1 million, respectively, and $27 million year to date, related to the transfer of receivables to assets held for sale. For the quarter and nine months ended September 30, 2014, the respective amounts were $11 million and $17 million. NSP charge-offs for the nine months ended September 30, 2014 included $7 million related to the transfer of receivables to assets held for sale. |
Non-accrual and Accruing Past Due Loans
(dollars in millions)
September 30,
2015 |
December 31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Non-accrual
loans
|
||||||||||
Commercial
|
||||||||||
U.S.
|
$ | 148.7 | $ | 71.9 | ||||||
Foreign
|
66.0 | 88.6 | ||||||||
Non-accrual
loans
|
$ | 214.7 | $ | 160.5 | ||||||
Troubled Debt
Restructurings
|
||||||||||
U.S.
|
$ | 24.5 | $ | 13.8 | ||||||
Foreign
|
4.8 | 3.4 | ||||||||
Restructured
loans
|
$ | 29.3 | $ | 17.2 | ||||||
Accruing
loans past due 90 days or more
|
$ | 10.6 | $ | 10.3 |
Non-accrual Loans as a Percentage of Finance Receivables
(dollars in millions)
September 30,
2015 |
December 31,
2014 |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Transportation
Finance
|
$ | 4.7 | 0.14 | % | $ | 0.1 | | ||||||||||||
International
Finance
|
47.4 | NM | 37.1 | 5.93 | % | ||||||||||||||
Transportation
& International Finance
|
52.1 | 1.58 | % | 37.2 | 1.05 | % | |||||||||||||
Commercial
Banking
|
84.6 | 1.01 | % | 30.9 | 0.45 | % | |||||||||||||
Equipment
Finance
|
67.6 | 1.58 | % | 70.0 | 1.48 | % | |||||||||||||
Commercial Real
Estate
|
4.1 | 0.08 | % | | | ||||||||||||||
North America
Banking
|
156.3 | 0.67 | % | 100.9 | 0.63 | % | |||||||||||||
Single Family
Residential Mortgages
|
1.8 | 0.04 | % | | | ||||||||||||||
Legacy
Consumer Mortgages
|
1.8 | 0.03 | % | | | ||||||||||||||
Non-Strategic
Portfolios
|
4.5 | NM | 22.4 | NM | |||||||||||||||
Total
|
$ | 214.7 | 0.66 | % | $ | 160.5 | 0.82 | % |
Nine Months Ended September 30, 2015
|
Nine Months Ended September 30, 2014
|
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
U.S.
|
Foreign
|
Total
|
U.S.
|
Foreign
|
Total
|
||||||||||||||||||||||
Commercial:
|
|||||||||||||||||||||||||||
Interest
revenue that would have been earned at original terms
|
$ | 18.8 | $ | 7.1 | $ | 25.9 | $ | 26.9 | $ | 10.6 | $ | 37.5 | |||||||||||||||
Less:
Interest recorded
|
(2.9 | ) | (2.0 | ) | (4.9 | ) | (9.4 | ) | (3.1 | ) | (12.5 | ) | |||||||||||||||
Foregone
interest revenue
|
$ | 15.9 | $ | 5.1 | $ | 21.0 | $ | 17.5 | $ | 7.5 | $ | 25.0 |
Troubled Debt Restructurings and Modifications
(dollars in millions)
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
%
Compliant |
%
Compliant |
||||||||||||||||||
Troubled Debt Restructurings
(1)
|
|||||||||||||||||||
Commercial
|
|||||||||||||||||||
Deferral of
principal and/or interest
|
$ | 5.5 | 94 | % | $ | 6.0 | 96 | % | |||||||||||
Covenant relief
and other
|
23.8 | 83 | % | 11.2 | 83 | % | |||||||||||||
Total
TDRs
|
$ | 29.3 | 85 | % | $ | 17.2 | 88 | % | |||||||||||
Percent
non-accrual
|
86 | % | 75 | % |
%
Compliant |
%
Compliant |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Modifications
(1)
|
|||||||||||||||||||
Commercial
|
|||||||||||||||||||
Extended
maturity
|
$ | 0.2 | 100 | % | $ | 0.1 | 100 | % | |||||||||||
Covenant
relief
|
36.6 | 90 | % | 70.9 | 100 | % | |||||||||||||
Interest rate
increase/additional collateral
|
9.6 | 100 | % | 25.1 | 100 | % | |||||||||||||
Other
|
135.0 | 97 | % | 58.3 | 100 | % | |||||||||||||
Total
Modifications
|
$ | 181.4 | 96 | % | $ | 154.4 | 100 | % | |||||||||||
Percent
non-accrual
|
10 | % | 10 | % |
(1)
|
Table depicts the predominant element of each modification, which may contain several of the characteristics listed. |
Non-interest Income
(dollars in millions)
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Rental income on
operating leases
|
$ | 539.3 | $ | 531.7 | $ | 535.0 | $ | 1,601.6 | $ | 1,546.5 | |||||||||||||
Other
Income:
|
|||||||||||||||||||||||
Factoring
commissions
|
30.9 | 27.0 | 31.1 | 87.4 | 88.0 | ||||||||||||||||||
Gains on sales
of leasing equipment
|
30.7 | 21.5 | 22.0 | 84.2 | 46.4 | ||||||||||||||||||
Fee
revenues
|
28.3 | 25.3 | 23.6 | 76.2 | 67.0 | ||||||||||||||||||
Gain on
investments
|
2.0 | 3.8 | 5.3 | 6.5 | 14.4 | ||||||||||||||||||
Loss on OREO
sales
|
(3.2 | ) | | | (3.2 | ) | | ||||||||||||||||
(Loss) gains
on loan and portfolio sales
|
(14.7 | ) | 2.1 | 9.8 | (6.0 | ) | 17.8 | ||||||||||||||||
Net losses on
derivatives and foreign currency exchange
|
(20.4 | ) | (5.0 | ) | (22.8 | ) | (35.1 | ) | (21.6 | ) | |||||||||||||
Impairment on
assets held for sale
|
(23.6 | ) | (11.0 | ) | (54.1 | ) | (44.7 | ) | (69.5 | ) | |||||||||||||
Other
revenues
|
9.2 | (0.2 | ) | 9.3 | 23.8 | 46.5 | |||||||||||||||||
Total other
income
|
39.2 | 63.5 | 24.2 | 189.1 | 189.0 | ||||||||||||||||||
Total
non-interest income
|
$ | 578.5 | $ | 595.2 | $ | 559.2 | $ | 1,790.7 | $ | 1,735.5 |
Non-Interest Expenses
(dollars in millions)
Quarters
Ended
|
Nine
Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September
30,
2015 |
June
30,
2015 |
September
30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Depreciation on
operating lease equipment
|
$ | 159.1 | $ | 157.8 | $ | 156.4 | $ | 473.7 | $ | 462.5 | |||||||||||||
Maintenance and
other operating lease expenses
|
55.9 | 49.4 | 46.5 | 151.4 | 147.1 | ||||||||||||||||||
Operating
expenses:
|
|||||||||||||||||||||||
Compensation
and benefits
|
$ | 160.4 | $ | 135.6 | $ | 130.3 | $ | 442.5 | $ | 394.9 | |||||||||||||
Professional
fees
|
57.3 | 20.8 | 22.0 | 97.6 | 56.9 | ||||||||||||||||||
Technology
|
29.9 | 24.9 | 21.2 | 77.1 | 63.1 | ||||||||||||||||||
Net occupancy
expense
|
14.8 | 8.6 | 9.1 | 32.8 | 26.5 | ||||||||||||||||||
Advertising
and marketing
|
7.4 | 6.7 | 7.5 | 23.2 | 23.7 | ||||||||||||||||||
Other
|
54.0 | 36.8 | 34.8 | 126.0 | 102.7 | ||||||||||||||||||
Operating
expenses, excluding restructuring costs and intangible asset amortization
|
323.8 | 233.4 | 224.9 | 799.2 | 667.8 | ||||||||||||||||||
Provision for
severance and facilities exiting activities
|
5.1 | 1.1 | 9.2 | 5.2 | 24.7 | ||||||||||||||||||
Intangible
assets amortization
|
5.0 | 0.5 | 0.4 | 6.1 | 0.5 | ||||||||||||||||||
Total operating
expenses
|
333.9 | 235.0 | 234.5 | 810.5 | 693.0 | ||||||||||||||||||
Loss on debt
extinguishments
|
0.3 | 0.1 | | 0.4 | 0.4 | ||||||||||||||||||
Total
non-interest expenses
|
$ | 549.2 | $ | 442.3 | $ | 437.4 | $ | 1,436.0 | $ | 1,303.0 | |||||||||||||
Headcount
|
4,960 | 3,360 | 3,330 | ||||||||||||||||||||
Operating
expenses excluding restructuring costs and intangible amortization as a % of AEA
(1)
|
2.47 | % | 2.27 | % | 2.20 | % | 2.36 | % | 2.21 | % | |||||||||||||
Net efficiency
ratio
(1)
|
62.2 | % | 57.4 | % | 57.8 | % | 59.1 | % | 54.0 | % |
(1)
|
Non-GAAP measure, see reconciliation of non-GAAP to GAAP financial information. |
n
|
Compensation and benefits increased from the year-ago and prior quarters, reflecting the impact of the net increase of 1,600 employees, primarily associated with the OneWest Bank acquisition. |
n
|
Professional fees include legal and other professional fees such as tax, audit, and consulting services and increased from the year-ago and prior quarters. The increase resulted from the acquisition, including $24 million in transaction costs in addition to other integration related costs, and exits of our non-strategic portfolios. |
n
|
Technology and Net occupancy expense increased primarily due to the OneWest acquisition. |
n
|
Advertising and marketing expenses include costs associated with raising deposits. Bank advertising and marketing costs totaled $5 million, compared to $5 million in the year-ago quarter, and $4 million in the prior quarter. Year-to-date, CIT Bank advertising and marketing costs totaled $16 million in 2015 and $17 million in 2014. |
n
|
Provision for severance and facilities exiting activities reflects costs associated with various efficiency initiatives and in the quarter related primarily to the OneWest Bank acquisition. |
n
|
Amortization of intangible assets increased, reflecting the additional intangible assets recorded in the OneWest Transaction. See Note 23 Goodwill and Intangible Assets in Item 1. Consolidated Financial Statements, which displays the intangible assets by type and segment, and describes the accounting methodologies. |
n
|
Other expenses include items such as travel and entertainment, corporate insurance, FDIC assessments, office equipment and supplies costs and taxes other than income taxes. |
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Provision for
income taxes, before discrete items
|
$ | 32.6 | $ | 44.8 | $ | (0.6 | ) | $ | 119.6 | $ | 25.0 | ||||||||||||
Discrete
items
|
(592.6 | ) | (7.0 | ) | (400.6 | ) | (597.8 | ) | (394.6 | ) | |||||||||||||
(Benefit)
provision for income taxes
|
$ | (560.0 | ) | $ | 37.8 | $ | (401.2 | ) | $ | (478.2 | ) | $ | (369.6 | ) | |||||||||
Effective tax
rate
|
(409.7 | )% | 24.7 | % | (344.1 | )% | (109.4 | )% | (80.6 | )% |
n
|
$647 million tax benefit recorded in the third quarter corresponding to a reduction to the U.S. federal deferred tax asset valuation allowance after considering the impact on earnings of the OneWest acquisition to support the Companys ability to utilize the U.S. federal net operating losses, |
n
|
$28 million tax expense including interest and penalties recorded in the third quarter related to an uncertain tax position taken on certain prior year international tax returns, and |
n
|
$28 million tax expense recorded in the third quarter related to establishment of domestic and international deferred tax liabilities consequent to Managements |
|
decision to no longer assert its intent to indefinitely reinvest its unremitted earnings in China, and | |
n
|
$9 million tax benefit recorded in the prior quarter corresponding to a reduction of certain tax reserves upon the receipt of a favorable tax ruling on an uncertain tax position taken on prior years tax returns. |
n
|
Separate State filing entities remained in a three year cumulative loss. |
n
|
State NOLs expiration periods vary in time and availability |
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Earnings
Summary
|
|||||||||||||||||||||||
Interest
income
|
$ | 73.8 | $ | 69.9 | $ | 68.8 | $ | 212.1 | $ | 217.7 | |||||||||||||
Rental income on
operating leases
|
506.6 | 498.6 | 501.4 | 1,502.7 | 1,446.1 | ||||||||||||||||||
Finance
revenue
|
580.4 | 568.5 | 570.2 | 1,714.8 | 1,663.8 | ||||||||||||||||||
Interest
expense
|
(155.0 | ) | (164.9 | ) | (165.3 | ) | (488.5 | ) | (481.1 | ) | |||||||||||||
Depreciation on
operating lease equipment
|
(137.6 | ) | (136.7 | ) | (132.8 | ) | (410.4 | ) | (386.1 | ) | |||||||||||||
Maintenance and
other operating lease expenses
|
(55.9 | ) | (49.4 | ) | (46.5 | ) | (151.4 | ) | (147.1 | ) | |||||||||||||
Net finance
revenue (NFR)
|
231.9 | 217.5 | 225.6 | 664.5 | 649.5 | ||||||||||||||||||
Provision for
credit losses
|
(1.5 | ) | 0.4 | (9.1 | ) | (11.7 | ) | (29.8 | ) | ||||||||||||||
Other
income
|
22.9 | 16.6 | 18.8 | 73.8 | 36.4 | ||||||||||||||||||
Operating
expenses
|
(68.4 | ) | (77.6 | ) | (73.8 | ) | (227.8 | ) | (228.8 | ) | |||||||||||||
Income before
provision for income taxes
|
$ | 184.9 | $ | 156.9 | $ | 161.5 | $ | 498.8 | $ | 427.3 | |||||||||||||
Select
Average Balances
|
|||||||||||||||||||||||
Average finance
receivables (AFR)
|
$ | 3,806.2 | $ | 3,657.3 | $ | 3,432.7 | $ | 3,620.5 | $ | 3,535.8 | |||||||||||||
Average
operating leases (AOL)
|
$ | 14,978.2 | $ | 14,720.1 | $ | 14,712.7 | $ | 14,785.6 | $ | 14,138.2 | |||||||||||||
Average earning
assets (AEA)
|
$ | 20,068.4 | $ | 20,155.6 | $ | 19,893.7 | $ | 20,143.9 | $ | 18,969.1 | |||||||||||||
Statistical
Data
|
|||||||||||||||||||||||
Net finance
margin NFR as a % of AEA
|
4.62 | % | 4.32 | % | 4.54 | % | 4.40 | % | 4.57 | % | |||||||||||||
Net operating
lease revenue rental income, net of depreciation and maintenance and other operating lease expenses
|
$ | 313.1 | $ | 312.5 | $ | 322.1 | $ | 940.9 | $ | 912.9 | |||||||||||||
Operating lease
margin as a % of AOL
|
8.36 | % | 8.49 | % | 8.76 | % | 8.48 | % | 8.61 | % | |||||||||||||
Pretax return on
AEA
|
3.69 | % | 3.11 | % | 3.25 | % | 3.30 | % | 3.00 | % | |||||||||||||
New business
volume
|
$ | 1,236.8 | $ | 825.8 | $ | 1,326.8 | $ | 2,587.8 | $ | 3,786.1 |
n
|
NFR was up from the year-ago quarter on overall asset growth and slightly higher yields. NFR was up slightly from the prior quarter driven by financing and leasing asset growth as lower funding costs offset yield compression. See Select Segment and Division Margin Metrics table in Net Finance Revenue section. |
n
|
Gross yields (interest income plus rental income on operating leases as a percent of AEA) for the segment increased from the year-ago and prior quarters. Gross yields in Aerospace increased to 11.0% from 10.4% in the prior quarter due to increased collections, loan prepayment benefits and a decrease in the interest bearing cash balance (which is now included in Average Earning Assets), while gross yields in Rail of 14.5% were down sequentially from 14.7%, reflecting reduced utilization in energy-related railcars and portfolio growth. |
n
|
Net operating lease revenue, which is a component of NFR, decreased from the year-ago quarter, as higher rental income from growth was offset by increased depreciation and maintenance and other operating lease expenses, and was down from the prior quarter on higher maintenance and other operating lease expense. Depreciation expense increased from the year-ago quarter, reflecting higher asset balances and was relatively flat with the prior quarter. Maintenance and other operating lease expense was up from the prior quarters. Net operating lease revenue as a percentage of AOL decreased from both periods with strength in Rail offset by compression in Aerospace. |
n
|
New business volume for the quarter was $1.2 billion and consisted of $0.8 billion of operating lease equipment, including the delivery of 8 new aircraft and approximately 2,200 new railcars, and the funding of $0.4 billion of finance receivables, the majority of which was in Maritime Finance. Year-to-date, new business volume included $1.5 billion of operating lease equipment, including the delivery of 14 aircraft, approximately 4,900 railcars, and $1.1 billion of finance receivables. The first quarter 2015 volume was supplemented by a U.K. rail portfolio purchase, which added approximately 900 railcars and approximately $85 million of assets. |
n
|
Utilization was mixed compared to the prior quarter and down from a year ago. Sequentially, air utilization increased slightly to 98% of aircraft equipment leased or under a commitment at quarter-end while rail utilization declined from 98% to 97%, reflecting pressures mostly from energy related industries, a trend that is expected to continue. Utilization of both air and rail assets were down from a year ago. All of the 18 aircraft for delivery in the next 12 months and approximately 60% of the total railcar order-book have lease commitments. |
n
|
Other income primarily reflected the following: |
n
|
Gains on asset sales totaled $23 million on approximately $381 million of equipment and receivable sales, compared to $18 million of gains on approximately $194 million of asset sales in the year-ago quarter and $11 million on approximately $100 million of equipment and receivable sales in the prior quarter. Year-to-date, gains totaled $62 million on approximately $415 million of sales in 2015 and $34 million on $473 million of sales in 2014. |
n
|
Impairment charges on AHFS totaled $5 million, compared to $5 million in the year-ago quarter and $2 million in the prior quarter and predominantly related to international portfolios. Year-to-date, impairment charges were $8 million in 2015 and $16 million in 2014. |
n
|
Other income also includes a small amount of fees and other revenue derived from loan commitments, joint ventures and other business activities, as well as periodic items such as a benefit from the termination of a defaulted contract recognized in the prior quarter. |
n
|
Non-accrual loans were $52 million (1.58% of finance receivables) at September 30, 2015, compared to $58 million (1.55%) at June 30, 2015, and $42 million (1.13%) at September 30, 2014, and largely consists of assets in the international portfolio. There was a small provision for credit losses, reflecting a specific allowance for international loans, compared to a provision in the year-ago quarter and a slight benefit in the prior quarter, reflecting recoveries in China. Net charge-offs were $27 million this quarter (2.86% of finance receivables), essentially all of which relates to the transfer of the China portfolio to assets held for sale, compared to $4 million (0.44%) in the year-ago quarter and net recoveries of nearly $3 million in the prior quarter. Net charge-offs were $26 million (0.96%) and $30 million (1.13%) for the nine months ended September 30, 2015 and 2014, respectively. Essentially all of the charge-offs and the recoveries were concentrated in the international portfolio. Charge-offs for the year-ago quarter and nine months included none and $12 million, respectively, related to the transfer of receivables to assets held for sale. The respective 2015 balances were not significant. |
n
|
Operating expenses were down from the year-ago prior quarter reflecting lower employee costs. |
North America Banking Financial Data and Metrics
(dollars in millions)
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Earnings
Summary
|
|||||||||||||||||||||||
Interest
income
|
$ | 275.6 | $ | 199.0 | $ | 215.8 | $ | 670.7 | $ | 618.0 | |||||||||||||
Rental income on
operating leases
|
28.5 | 27.9 | 24.7 | 83.6 | 72.6 | ||||||||||||||||||
Finance
revenue
|
304.1 | 226.9 | 240.5 | 754.3 | 690.6 | ||||||||||||||||||
Interest
expense
|
(72.2 | ) | (73.3 | ) | (74.2 | ) | (219.6 | ) | (211.2 | ) | |||||||||||||
Depreciation on
operating lease equipment
|
(21.5 | ) | (21.1 | ) | (20.1 | ) | (63.3 | ) | (62.0 | ) | |||||||||||||
Net finance
revenue (NFR)
|
210.4 | 132.5 | 146.2 | 471.4 | 417.4 | ||||||||||||||||||
Provision for
credit losses
|
(46.9 | ) | (18.8 | ) | (29.7 | ) | (89.7 | ) | (55.5 | ) | |||||||||||||
Other
income
|
58.2 | 69.2 | 71.1 | 193.7 | 202.6 | ||||||||||||||||||
Operating
expenses
|
(185.9 | ) | (135.4 | ) | (125.9 | ) | (456.0 | ) | (367.6 | ) | |||||||||||||
Income before
provision for income taxes
|
$ | 35.8 | $ | 47.5 | $ | 61.7 | $ | 119.4 | $ | 196.9 | |||||||||||||
Select
Average Balances
|
|||||||||||||||||||||||
Average finance
receivables (AFR)
|
$ | 21,204.1 | $ | 15,854.4 | $ | 16,009.3 | $ | 17,587.4 | $ | 15,221.6 | |||||||||||||
Average earning
assets (AEA)
(1)
|
$ | 20,808.0 | $ | 15,396.7 | $ | 15,745.5 | 17,154.5 | 14,940.6 | |||||||||||||||
Statistical
Data
|
|||||||||||||||||||||||
Net finance
margin NFR as a % of AEA
|
4.04 | % | 3.44 | % | 3.71 | % | 3.66 | % | 3.72 | % | |||||||||||||
Pretax return on
AEA
|
0.69 | % | 1.23 | % | 1.57 | % | 0.93 | % | 1.76 | % | |||||||||||||
New business
volume
|
$ | 2,067.2 | $ | 1,630.5 | $ | 1,608.0 | $ | 5,051.8 | $ | 4,581.0 | |||||||||||||
Factoring
volume
|
$ | 6,773.5 | $ | 5,821.3 | $ | 6,746.7 | $ | 19,090.4 | $ | 19,300.6 |
(1)
|
AEA is lower than AFR as it is reduced by the average credit balances for factoring clients. |
n
|
NFR increased from the year-ago and prior quarters, along with the nine month period ended, as the benefit of higher average earning assets and purchase accounting accretion of $27 million was partially offset by lower portfolio yields and a lower level of loan prepayments and interest recoveries. NFM reflects similar quarterly trends, but remained relatively steady for the nine month periods. |
n
|
Gross yields were down from the year-ago quarter, mainly reflecting the impact of the acquired assets due to portfolio mix, along with continued pressures on yields, as new business yields are generally below maturing contracts. Gross yields for the sequential quarter remained relatively steady, reflecting yield stabilization in certain sectors and benefits from purchase accounting accretion. Excluding benefits from purchase accounting accretion, gross yields declined |
|
from the prior quarter. See Select Segment and Division Margin Metrics table in Net Finance Revenue section. |
n
|
Other income declined from the year-ago and prior quarters reflecting: |
n
|
Factoring commissions of $31 million, were flat with the year-ago quarter and up from the prior quarter on seasonally higher factored volumes in line with seasonal trends. Year-to-date, factoring commissions were $87 million, down slightly from 2014. |
n
|
Gains on asset sales (including receivables, equipment and investments) of $13 million, which were down from $15 million in the year-ago quarter and essentially unchanged from the prior quarters. Year-to-date, gains totaled $38 million, essentially unchanged from 2014. |
n
|
Fee revenue include fees on lines of credit and letters of credit, capital markets-related fees, agent and advisory fees, and servicing fees for the assets we sell but retain servicing. As a result of the acquisition, banking related fees expanded and includes items such as cash management fees and account fees. Fee revenue totaled $25 million, compared to $22 million in the year-ago quarter and $23 million in the prior quarter. Year-to-date, fee revenue totaled $68 million in 2015 and $57 million in 2014. |
n
|
Impairments on assets held for sale of $15 million resulted from transferring the Canada operations into assets held for sale. |
n
|
Non-accrual loans were $156 million (0.67% of finance receivables) at September 30, 2015, compared to $111 million (0.70%) at June 30, 2015, and $134 million (0.83%) at September 30, 2014. While up in amount, the lower percent is due to the additional assets acquired. There were no non-accruals on consumer accounts; non-accruals as a percent of commercial receivables was 0.70% at September 30, 2015. The $47 million provision for credit losses was up from the year-ago and prior quarters, and reflect additional new business volume and reserve build on acquired receivables. Year to date amounts also rose. Net charge-offs were $33 million (0.62% of average finance receivables) for the current quarter, compared to $16 million (0.40%) in the year-ago quarter and $26 million (0.66%) in the prior quarter. Net charge-offs include $14 million from assets transferred to held for sale in the current quarter, mostly related to the Canada portfolio, compared to $11 million in the year-ago quarter and $1 million in the prior quarter. For the nine months ended September 30, 2015 and 2014, the respective amounts were $27 million and $17 million. Net charge-offs were $79 million (0.60%) and $41 million (0.36%) for the nine months ended September 30, 2015 and 2014, respectively. |
n
|
The increases in operating expenses from the year-ago and prior quarters and year to date amounts are primarily due to the inclusion of costs related to the acquired activities of OneWest Bank. |
Legacy Consumer Mortgages Financial Data and Metrics
(dollars in millions)
Quarter Ended
September 30, 2015 |
Nine Months Ended
September 30, 2015 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Earnings
Summary
|
||||||||||
Interest income
(finance revenue)
|
$ | 62.8 | $ | 62.8 | ||||||
Interest
expense
|
(14.0 | ) | (14.0 | ) | ||||||
Net finance
revenue (NFR)
|
48.8 | 48.8 | ||||||||
Provision for
credit losses
|
(1.5 | ) | (1.5 | ) | ||||||
Other
income
|
(0.9 | ) | (0.9 | ) | ||||||
Operating
expenses
|
(16.9 | ) | (16.9 | ) | ||||||
Income before
provision for income taxes
|
$ | 29.5 | $ | 29.5 | ||||||
Select
Average Balances
|
||||||||||
Average finance
receivables (AFR)
|
$ | 3,637.0 | $ | 1,225.7 | ||||||
Average earning
assets (AEA)
|
$ | 3,912.6 | $ | 1,318.5 | ||||||
Statistical
Data
|
||||||||||
Net finance
margin NFR as a % of AEA
|
4.99 | % | 4.94 | % |
Non-Strategic Portfolios Financial Data and Metrics
(dollars in millions)
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Earnings
Summary
|
|||||||||||||||||||||||
Interest
income
|
$ | 7.2 | $ | 10.2 | $ | 20.4 | $ | 29.7 | $ | 74.4 | |||||||||||||
Rental income on
operating leases
|
4.2 | 5.2 | 8.9 | 15.3 | 27.8 | ||||||||||||||||||
Finance
revenue
|
11.4 | 15.4 | 29.3 | 45.0 | 102.2 | ||||||||||||||||||
Interest
expense
|
(6.1 | ) | (9.2 | ) | (18.6 | ) | (26.1 | ) | (66.5 | ) | |||||||||||||
Depreciation on
operating lease equipment
|
| | (3.5 | ) | | (14.4 | ) | ||||||||||||||||
Net finance
revenue (NFR)
|
5.3 | 6.2 | 7.2 | 18.9 | 21.3 | ||||||||||||||||||
Provision for
credit losses
|
| | 0.7 | | 0.4 | ||||||||||||||||||
Other
income
|
(21.8 | ) | (5.7 | ) | (47.1 | ) | (35.3 | ) | (38.8 | ) | |||||||||||||
Operating
expenses
|
(4.5 | ) | (10.9 | ) | (16.9 | ) | (27.8 | ) | (56.6 | ) | |||||||||||||
Loss before
provision for income taxes
|
$ | (21.0 | ) | $ | (10.4 | ) | $ | (56.1 | ) | $ | (44.2 | ) | $ | (73.7 | ) | ||||||||
Select
Average Balances
|
|||||||||||||||||||||||
Average finance
receivables (AFR)
|
$ | | $ | | $ | 0.1 | $ | | $ | 196.5 | |||||||||||||
Average earning
assets (AEA)
|
312.3 | 464.6 | 1,027.4 | 430.1 | 1,324.3 | ||||||||||||||||||
Statistical
Data
|
|||||||||||||||||||||||
Net finance
margin NFR as a % of AEA
|
6.79 | % | 5.34 | % | 2.80 | % | 5.86 | % | 2.14 | % | |||||||||||||
New business
volume
|
$ | 14.2 | $ | 26.4 | $ | 64.7 | $ | 78.3 | $ | 180.6 |
Corporate and Other Financial Data
(dollars in millions)
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Earnings
Summary
|
|||||||||||||||||||||||
Interest
income
|
$ | 18.3 | $ | 4.7 | $ | 3.3 | $ | 27.2 | $ | 10.2 | |||||||||||||
Interest
expense
|
(33.0 | ) | (17.8 | ) | (17.1 | ) | (68.6 | ) | (50.5 | ) | |||||||||||||
Net finance
revenue (NFR)
|
(14.7 | ) | (13.1 | ) | (13.8 | ) | (41.4 | ) | (40.3 | ) | |||||||||||||
Provision for
credit losses
|
| | (0.1 | ) | | (0.2 | ) | ||||||||||||||||
Other
income
|
(19.2 | ) | (16.6 | ) | (18.6 | ) | (42.2 | ) | (11.2 | ) | |||||||||||||
Operating
expenses
|
(58.2 | ) | (11.1 | ) | (17.9 | ) | (82.0 | ) | (40.0 | ) | |||||||||||||
Loss on debt
extinguishments
|
(0.3 | ) | (0.1 | ) | | (0.4 | ) | (0.4 | ) | ||||||||||||||
Loss before
provision for income taxes
|
$ | (92.4 | ) | $ | (40.9 | ) | $ | (50.4 | ) | $ | (166.0 | ) | $ | (92.1 | ) |
n
|
Interest income consists of interest and dividend income, primarily from investment securities and deposits held at other depository institutions. The increase in the quarter reflect additional income from the OneWest Bank acquisition and the investment portfolio now includes a Mortgage-Backed Security portfolio. |
n
|
Interest expense generally is allocated to the segments. Interest expense held in Corporate represents amounts in excess of these allocations and amounts related to excess liquidity. |
n
|
Other income primarily reflects net losses on derivatives, including the GSI facilities, and foreign currency exchange. The GSI derivative had a negative mark-to-market of $24 million for the current quarter, compared to $13 million in the year-ago quarter and $6 million for the prior quarter. The prior quarter also included $9 million related to a write-off of other receivables in connection with the favorable resolution of an uncertain tax position. |
n
|
Operating expense were elevated in the quarter reflecting closing costs and restructuring charges related to the OneWest Bank acquisition. |
September 30,
2015 |
December 31,
2014 |
% Change
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Transportation
& International Finance
|
||||||||||||||
Segment
Total
|
||||||||||||||
Loans
|
$ | 3,305.5 | $ | 3,558.9 | (7.1 | )% | ||||||||
Operating
lease equipment, net
|
15,287.3 | 14,665.2 | 4.2 | % | ||||||||||
Assets held
for sale
|
1,047.9 | 815.2 | 28.5 | % | ||||||||||
Financing and
leasing assets
|
19,640.7 | 19,039.3 | 3.2 | % | ||||||||||
Aerospace
|
||||||||||||||
Loans
|
1,705.6 | 1,796.5 | (5.1 | )% | ||||||||||
Operating
lease equipment, net
|
9,045.2 | 8,949.5 | 1.1 | % | ||||||||||
Assets held
for sale
|
102.3 | 391.6 | (73.9 | )% | ||||||||||
Financing and
leasing assets
|
10,853.1 | 11,137.6 | (2.6 | )% | ||||||||||
Rail
|
||||||||||||||
Loans
|
129.0 | 130.0 | (0.8 | )% | ||||||||||
Operating
lease equipment, net
|
6,242.1 | 5,715.2 | 9.2 | % | ||||||||||
Assets held
for sale
|
1.0 | 1.2 | (16.7 | )% | ||||||||||
Financing and
leasing assets
|
6,372.1 | 5,846.4 | 9.0 | % | ||||||||||
Maritime
Finance
|
||||||||||||||
Loans
|
1,470.9 | 1,006.7 | 46.1 | % | ||||||||||
Assets held
for sale
|
39.1 | 19.7 | 98.5 | % | ||||||||||
Financing and
leasing assets
|
1,510.0 | 1,026.4 | 47.1 | % | ||||||||||
International Finance
|
||||||||||||||
Loans
|
| 625.7 | (100.0 | )% | ||||||||||
Operating
lease equipment, net
|
| 0.5 | (100.0 | )% | ||||||||||
Assets held
for sale
|
905.5 | 402.7 | 124.9 | % | ||||||||||
Financing and
leasing assets
|
905.5 | 1,028.9 | (12.0 | )% | ||||||||||
North America
Banking
|
||||||||||||||
Segment
Total
|
||||||||||||||
Loans
|
23,501.3 | 15,936.0 | 47.5 | % | ||||||||||
Operating
lease equipment, net
|
250.9 | 265.2 | (5.4 | )% | ||||||||||
Assets held
for sale
|
990.6 | 22.8 | 4,244.7 | % | ||||||||||
Financing and
leasing assets
|
24,742.8 | 16,224.0 | 52.5 | % | ||||||||||
Commercial Banking
|
||||||||||||||
Loans
|
10,235.0 | 6,889.9 | 48.6 | % | ||||||||||
Assets held
for sale
|
413.0 | 22.8 | 1,711.4 | % | ||||||||||
Financing and
leasing assets
|
10,648.0 | 6,912.7 | 54.0 | % | ||||||||||
Commercial Real Estate
|
||||||||||||||
Loans
|
5,092.2 | 1,768.6 | 187.9 | % | ||||||||||
Financing and
leasing assets
|
5,092.2 | 1,768.6 | 187.9 | % | ||||||||||
Equipment Finance
|
||||||||||||||
Loans
|
4,290.0 | 4,717.3 | (9.1 | )% | ||||||||||
Operating
lease equipment, net
|
250.9 | 265.2 | (5.4 | )% | ||||||||||
Assets held
for sale
|
569.5 | | NM | |||||||||||
Financing and
leasing assets
|
5,110.4 | 4,982.5 | 2.6 | % | ||||||||||
Commercial Services
|
||||||||||||||
Loans and
factoring receivables
|
2,556.4 | 2,560.2 | (0.1 | )% | ||||||||||
Financing and
leasing assets
|
2,556.4 | 2,560.2 | (0.1 | )% | ||||||||||
Consumer
Banking
|
||||||||||||||
Loans
|
1,327.7 | | NM | |||||||||||
Assets held
for sale
|
8.1 | | NM | |||||||||||
Financing and
leasing assets
|
1,335.8 | | NM |
September 30,
2015 |
December 31,
2014 |
% Change
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Legacy
Consumer Mortgages
|
||||||||||||||
Segment
Total
|
||||||||||||||
Loans
|
$ | 5,599.4 | $ | | NM | |||||||||
Assets held
for sale
|
36.9 | | NM | |||||||||||
Financing and
leasing assets
|
5,636.3 | | NM | |||||||||||
Single
Family Mortgages
|
||||||||||||||
Loans
|
4,702.3 | | NM | |||||||||||
Assets held
for sale
|
21.2 | | NM | |||||||||||
Financing and
leasing assets
|
4,723.5 | | NM | |||||||||||
Reverse
Mortgages
|
||||||||||||||
Loans
|
897.1 | | NM | |||||||||||
Assets held
for sale
|
15.7 | | NM | |||||||||||
Financing and
leasing assets
|
912.8 | | NM | |||||||||||
Non-Strategic
Portfolios
|
||||||||||||||
Loans
|
| 0.1 | (100.0 | )% | ||||||||||
Assets held
for sale
|
78.9 | 380.1 | (79.2 | )% | ||||||||||
Financing and
leasing assets
|
78.9 | 380.2 | (79.2 | )% | ||||||||||
Consolidated
Totals:
|
||||||||||||||
Loans
|
$ | 32,406.2 | $ | 19,495.0 | 66.2 | % | ||||||||
Operating
lease equipment, net
|
15,538.2 | 14,930.4 | 4.1 | % | ||||||||||
Assets held
for sale
|
2,154.3 | 1,218.1 | 76.9 | % | ||||||||||
Financing and
leasing assets
|
$ | 50,098.7 | $ | 35,643.5 | 40.6 | % |
Contractual Maturities of Loans at September 30, 2015
(dollars in millions)
Commercial
|
Consumer
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
U.S.
|
Foreign
|
U.S.
|
Total
|
||||||||||||||||
Fixed-rate
|
|||||||||||||||||||
1 year or
less
|
$ | 3,762.6 | $ | 153.4 | $ | 71.6 | $ | 3,987.6 | |||||||||||
Year
2
|
1,169.9 | 21.3 | 55.0 | 1,246.2 | |||||||||||||||
Year
3
|
747.3 | 20.5 | 56.4 | 824.2 | |||||||||||||||
Year
4
|
298.0 | 96.5 | 57.8 | 452.3 | |||||||||||||||
Year
5
|
179.5 | 23.4 | 59.4 | 262.3 | |||||||||||||||
2-5
years
|
2,394.7 | 161.7 | 228.6 | 2,785.0 | |||||||||||||||
After 5
years
|
932.6 | 194.2 | 2,625.0 | 3,751.8 | |||||||||||||||
Total
fixed-rate
|
7,089.9 | 509.3 | 2,925.2 | 10,524.4 | |||||||||||||||
Adjustable-rate
|
|||||||||||||||||||
1 year or
less
|
1,877.3 | 309.6 | 89.9 | 2,276.8 | |||||||||||||||
Year
2
|
2,762.2 | 314.3 | 80.1 | 3,156.6 | |||||||||||||||
Year
3
|
3,089.4 | 362.1 | 108.4 | 3,559.9 | |||||||||||||||
Year
4
|
2,570.3 | 594.4 | 118.8 | 3,283.5 | |||||||||||||||
Year
5
|
2,129.0 | 372.4 | 123.3 | 2,624.7 | |||||||||||||||
2-5
years
|
10,550.9 | 1,643.2 | 430.6 | 12,624.7 | |||||||||||||||
After 5
years
|
3,387.9 | 523.4 | 5,155.9 | 9,067.2 | |||||||||||||||
Total
adjustable-rate
|
15,816.1 | 2,476.2 | 5,676.4 | 23,968.7 | |||||||||||||||
Total
|
$ | 22,906.0 | $ | 2,985.5 | $ | 8,601.6 | $ | 34,493.1 |
Transportation &
International Finance |
North America
Banking |
Legacy
Consumer Mortgages |
Non-Strategic
Portfolios |
Total
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at
June 30, 2015
|
$ | 19,250.5 | $ | 16,302.2 | $ | | $ | 293.0 | $ | 35,845.7 | ||||||||||||
New business
volume
|
1,236.8 | 2,067.2 | | 14.2 | 3,318.2 | |||||||||||||||||
Portfolio /
business acquisitions
|
| 7,877.6 | 5,741.1 | | 13,618.7 | |||||||||||||||||
Loan
sales
|
(42.2 | ) | (93.5 | ) | | (185.3 | ) | (321.0 | ) | |||||||||||||
Equipment
sales
|
(338.6 | ) | (59.4 | ) | | (0.6 | ) | (398.6 | ) | |||||||||||||
Depreciation
|
(137.6 | ) | (21.5 | ) | | | (159.1 | ) | ||||||||||||||
Gross
charge-offs
|
(28.3 | ) | (37.6 | ) | (1.5 | ) | | (67.4 | ) | |||||||||||||
Collections and
other
|
(299.9 | ) | (1,292.2 | ) | (103.3 | ) | (42.4 | ) | (1,737.8 | ) | ||||||||||||
Balance at
September 30, 2015
|
$ | 19,640.7 | $ | 24,742.8 | $ | 5,636.3 | $ | 78.9 | $ | 50,098.7 | ||||||||||||
Balance at
December 31, 2014
|
$ | 19,039.3 | $ | 16,224.0 | $ | | $ | 380.2 | $ | 35,643.5 | ||||||||||||
New business
volume
|
2,587.8 | 5,051.8 | | 78.3 | 7,717.9 | |||||||||||||||||
Portfolio /
business acquisitions
|
84.4 | 7,877.6 | 5,741.1 | | 13,703.1 | |||||||||||||||||
Loan
sales
|
(65.6 | ) | (200.8 | ) | | (185.6 | ) | (452.0 | ) | |||||||||||||
Equipment
sales
|
(812.7 | ) | (172.8 | ) | | (5.2 | ) | (990.7 | ) | |||||||||||||
Depreciation
|
(410.4 | ) | (63.3 | ) | | | (473.7 | ) | ||||||||||||||
Gross
charge-offs
|
(34.4 | ) | (92.3 | ) | (1.5 | ) | | (128.2 | ) | |||||||||||||
Collections and
other
|
(747.7 | ) | (3,881.4 | ) | (103.3 | ) | (188.8 | ) | (4,921.2 | ) | ||||||||||||
Balance at
September 30, 2015
|
$ | 19,640.7 | $ | 24,742.8 | $ | 5,636.3 | $ | 78.9 | $ | 50,098.7 |
New Business Volumes and Factored Volumes
(dollars in millions)
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Transportation
& International Finance
|
$ | 1,236.8 | $ | 825.8 | $ | 1,326.8 | $ | 2,587.8 | $ | 3,786.1 | |||||||||||||
North America
Banking
|
2,067.2 | 1,630.5 | 1,608.0 | 5,051.8 | 4,581.0 | ||||||||||||||||||
Non-Strategic
Portfolios
|
14.2 | 26.4 | 64.7 | 78.3 | 180.6 | ||||||||||||||||||
Total new
business volumes
|
$ | 3,318.2 | $ | 2,482.7 | $ | 2,999.5 | $ | 7,717.9 | $ | 8,547.7 | |||||||||||||
Factored
volumes
|
$ | 6,773.5 | $ | 5,821.3 | $ | 6,746.7 | $ | 19,090.4 | $ | 19,300.6 |
Loan Sales
(dollars in millions)
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Transportation
& International Finance
|
$ | 42.2 | $ | | $ | 64.2 | $ | 65.6 | $ | 124.3 | |||||||||||||
North America
Banking
|
93.5 | 36.3 | 157.2 | 200.8 | 319.9 | ||||||||||||||||||
Non-Strategic
Portfolios
|
185.3 | 0.3 | 2.9 | 185.6 | 366.4 | ||||||||||||||||||
Total
|
$ | 321.0 | $ | 36.6 | $ | 224.3 | $ | 452.0 | $ | 810.6 |
Equipment Sales
(dollars in millions)
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Transportation
& International Finance
|
$ | 338.6 | $ | 97.1 | $ | 129.5 | $ | 812.7 | $ | 349.0 | |||||||||||||
North America
Banking
|
59.4 | 55.6 | 79.0 | 172.8 | 229.4 | ||||||||||||||||||
Non-Strategic
Portfolios
|
0.6 | 1.9 | 3.3 | 5.2 | 14.6 | ||||||||||||||||||
Total
|
$ | 398.6 | $ | 154.6 | $ | 211.8 | $ | 990.7 | $ | 593.0 |
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
West
|
$ | 12,012.8 | 24.0 | % | $ | 3,183.1 | 8.9 | % | |||||||||||
Northeast
|
9,731.7 | 19.4 | % | 6,552.0 | 18.4 | % | |||||||||||||
Southeast
|
4,765.7 | 9.5 | % | 3,732.9 | 10.5 | % | |||||||||||||
Southwest
|
4,674.4 | 9.3 | % | 3,852.8 | 10.8 | % | |||||||||||||
Midwest
|
4,666.6 | 9.3 | % | 3,821.6 | 10.7 | % | |||||||||||||
Total
U.S.
|
35,851.2 | 71.5 | % | 21,142.4 | 59.3 | % | |||||||||||||
Asia /
Pacific
|
4,486.4 | 9.0 | % | 4,608.7 | 12.9 | % | |||||||||||||
Europe
|
3,146.4 | 6.3 | % | 3,296.4 | 9.3 | % | |||||||||||||
Canada
|
2,454.1 | 4.9 | % | 2,520.6 | 7.1 | % | |||||||||||||
Latin
America
|
1,414.5 | 2.8 | % | 1,651.7 | 4.6 | % | |||||||||||||
All other
countries
|
2,746.1 | 5.5 | % | 2,423.7 | 6.8 | % | |||||||||||||
Total
|
$ | 50,098.7 | 100.0 | % | $ | 35,643.5 | 100.0 | % |
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Northeast
|
$ | 8,483.1 | 19.7 | % | $ | 6,552.0 | 18.4 | % | |||||||||||
West
|
7,263.7 | 16.8 | % | 3,183.1 | 8.9 | % | |||||||||||||
Southwest
|
4,552.1 | 10.5 | % | 3,852.8 | 10.8 | % | |||||||||||||
Midwest
|
4,401.2 | 10.2 | % | 3,821.6 | 10.7 | % | |||||||||||||
Southeast
|
4,193.5 | 9.7 | % | 3,732.9 | 10.5 | % | |||||||||||||
Total
U.S.
|
28,893.6 | 66.9 | % | 21,142.4 | 59.3 | % | |||||||||||||
Asia /
Pacific
|
4,485.6 | 10.4 | % | 4,608.7 | 12.9 | % | |||||||||||||
Europe
|
3,141.4 | 7.3 | % | 3,296.4 | 9.3 | % | |||||||||||||
Canada
|
2,445.8 | 5.7 | % | 2,520.6 | 7.1 | % | |||||||||||||
Latin
America
|
1,413.5 | 3.3 | % | 1,651.7 | 4.6 | % | |||||||||||||
All other
countries
|
2,744.7 | 6.4 | % | 2,423.7 | 6.8 | % | |||||||||||||
Total
|
$ | 43,124.6 | 100.0 | % | $ | 35,643.5 | 100.0 | % |
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
State
|
|||||||||||||||||||
California
|
$ | 5,064.8 | 11.7 | % | $ | 1,488.0 | 4.2 | % | |||||||||||
Texas
|
3,840.4 | 8.9 | % | 3,261.4 | 9.1 | % | |||||||||||||
New
York
|
2,929.1 | 6.8 | % | 2,492.3 | 7.0 | % | |||||||||||||
All other
states
|
17,059.3 | 39.5 | % | 13,900.7 | 39.0 | % | |||||||||||||
Total
U.S.
|
$ | 28,893.6 | 66.9 | % | $ | 21,142.4 | 59.3 | % | |||||||||||
Country
|
|||||||||||||||||||
Canada
|
$ | 2,447.1 | 5.7 | % | $ | 2,520.6 | 7.1 | % | |||||||||||
China
|
1,011.1 | 2.3 | % | 1,043.7 | 2.9 | % | |||||||||||||
England
|
980.9 | 2.3 | % | 855.3 | 2.4 | % | |||||||||||||
Australia
|
910.5 | 2.1 | % | 1,029.1 | 2.9 | % | |||||||||||||
Mexico
|
526.2 | 1.2 | % | 670.7 | 1.9 | % | |||||||||||||
Brazil
|
510.6 | 1.2 | % | 579.5 | 1.6 | % | |||||||||||||
Philippines
|
496.4 | 1.2 | % | 511.3 | 1.4 | % | |||||||||||||
Indonesia
|
410.9 | 1.0 | % | 424.4 | 1.2 | % | |||||||||||||
All other
countries
|
6,937.3 | 16.1 | % | 6,866.5 | 19.3 | % | |||||||||||||
Total
International
|
$ | 14,231.0 | 33.1 | % | $ | 14,501.1 | 40.7 | % |
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Commercial
airlines (including regional airlines)
(1)
|
$ | 10,037.0 | 23.3 | % | $ | 10,313.7 | 28.9 | % | |||||||||||
Manufacturing
(2)
|
5,323.4 | 12.3 | % | 4,702.6 | 13.2 | % | |||||||||||||
Real
Estate
|
4,632.7 | 10.7 | % | 1,590.5 | 4.5 | % | |||||||||||||
Transportation
(3)
|
4,284.5 | 9.9 | % | 3,361.7 | 9.5 | % | |||||||||||||
Service
industries
|
3,127.6 | 7.3 | % | 2,553.6 | 7.2 | % | |||||||||||||
Retail
(4)
|
2,855.8 | 6.6 | % | 3,187.8 | 8.9 | % | |||||||||||||
Wholesale
|
2,279.9 | 5.3 | % | 1,710.3 | 4.8 | % | |||||||||||||
Energy and
utilities
|
2,124.8 | 4.9 | % | 1,513.2 | 4.2 | % | |||||||||||||
Oil and gas
extraction / services
|
1,910.5 | 4.4 | % | 1,483.4 | 4.2 | % | |||||||||||||
Finance and
insurance
|
1,355.8 | 3.2 | % | 782.9 | 2.2 | % | |||||||||||||
Healthcare
|
1,267.8 | 3.0 | % | 1,159.7 | 3.3 | % | |||||||||||||
Other (no
industry greater than 2%)
|
3,924.8 | 9.1 | % | 3,284.1 | 9.1 | % | |||||||||||||
Total
|
$ | 43,124.6 | 100.0 | % | $ | 35,643.5 | 100.0 | % |
(1)
|
Includes the Commercial Aerospace Portfolio and additional financing and leasing assets that are not commercial aircraft. |
(2)
|
At September 30, 2015, includes manufacturers of chemicals, including pharmaceuticals 2.7% and petroleum and coal, including refining 1.5%. |
(3)
|
At September 30, 2015, included rail 3.7%, maritime 3.9% and trucking and shipping 1.4%. |
(4)
|
At September 30, 2015, includes retailers of apparel 1.5% and general merchandise 1.8%. |
Commercial Aerospace Portfolio
(dollars in millions)
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net
Investment |
Number
|
Net
Investment |
Number
|
||||||||||||||||
By
Product:
|
|||||||||||||||||||
Operating
lease
(1)
|
$ | 9,118.7 | 271 | $ | 9,309.3 | 279 | |||||||||||||
Loan
|
607.7 | 55 | 635.0 | 50 | |||||||||||||||
Capital
lease
|
325.5 | 21 | 335.6 | 21 | |||||||||||||||
Total
|
$ | 10,051.9 | 347 | $ | 10,279.9 | 350 |
(1)
|
Includes operating lease equipment held for sale. |
Commercial Aerospace Operating Lease Portfolio
(dollars in millions)
(1)
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net
Investment |
Number
|
Net
Investment |
Number
|
||||||||||||||||
By
Region:
|
|||||||||||||||||||
Asia /
Pacific
|
$ | 3,381.5 | 82 | $ | 3,505.9 | 84 | |||||||||||||
Europe
|
2,106.7 | 80 | 2,239.4 | 86 | |||||||||||||||
U.S. and
Canada
|
1,943.0 | 60 | 1,802.6 | 57 | |||||||||||||||
Latin
America
|
1,022.1 | 35 | 994.9 | 37 | |||||||||||||||
Africa /
Middle East
|
665.4 | 14 | 766.5 | 15 | |||||||||||||||
Total
|
$ | 9,118.7 | 271 | $ | 9,309.3 | 279 | |||||||||||||
By
Manufacturer:
|
|||||||||||||||||||
Airbus
|
$ | 5,856.1 | 154 | $ | 5,985.5 | 160 | |||||||||||||
Boeing
|
2,643.8 | 95 | 2,711.6 | 98 | |||||||||||||||
Embraer
|
559.6 | 21 | 547.2 | 20 | |||||||||||||||
Other
|
59.2 | 1 | 65.0 | 1 | |||||||||||||||
Total
|
$ | 9,118.7 | 271 | $ | 9,309.3 | 279 | |||||||||||||
By Body
Type
(2)
:
|
|||||||||||||||||||
Narrow
body
|
$ | 5,862.2 | 220 | $ | 6,287.8 | 230 | |||||||||||||
Intermediate
|
3,196.3 | 49 | 2,955.3 | 47 | |||||||||||||||
Regional and
other
|
60.2 | 2 | 66.2 | 2 | |||||||||||||||
Total
|
$ | 9,118.7 | 271 | $ | 9,309.3 | 279 | |||||||||||||
Number of
customers
|
97 | 98 | |||||||||||||||||
Weighted average
age of fleet (years)
|
6 | 5 |
(1)
|
Includes operating lease equipment held for sale. |
(2)
|
Narrow body are single aisle design and consist primarily of Boeing 737 and 757 series, Airbus A320 series, and Embraer E170 and E190 aircraft. Intermediate body are smaller twin aisle design and consist primarily of Boeing 767 series and Airbus A330 series aircraft. Regional and Other includes aircraft and related equipment, such as engines. |
Net
Investment |
% of
Total |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Single family
residential loans
|
$ | 6,050.9 | 86.8 | % | ||||||
Multifamily
residential loans
|
0.5 | 0.0 | % | |||||||
Reverse mortgage
loans
|
912.8 | 13.1 | % | |||||||
Other
consumer
|
9.9 | 0.1 | % | |||||||
Total
loans
|
$ | 6,974.1 | 100.0 | % |
Consumer Financing and Leasing Assets Geographic Concentrations at September 30, 2015
(dollars in
millions)
Net Investment
|
% of Total
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
California
|
$ | 4,214.3 | 60.4 | % | ||||||
New
York
|
577.5 | 8.3 | % | |||||||
Florida
|
318.7 | 4.6 | % | |||||||
New
Jersey
|
186.1 | 2.7 | % | |||||||
Maryland
|
158.6 | 2.3 | % | |||||||
Other States and
Territories
(1)
|
1,518.9 | 21.7 | % | |||||||
|
$ | 6,974.1 | 100.0 | % |
(1)
|
No state or territories having total carrying value in excess of 2%. |
n
|
Strategic risk is the risk of the impact on earnings or capital arising from adverse strategic business decisions, improper implementation of strategic decisions, or lack of responsiveness to changes in the industry, including changes in the financial services industry as well as fundamental changes in the businesses in which our customers and our firm engages. |
n
|
Credit risk is the risk of loss (including the incurrence of additional expenses) when a borrower does not meet its financial obligations to the Company. Credit risk may arise from lending, leasing, and/or counterparty activities. |
n
|
Asset risk is the equipment valuation and residual risk of lease equipment owned by the Company that arises from fluctuations in the supply and demand for the underlying leased equipment. The Company is exposed to the risk that, at the end of the lease term, the value of the asset will be lower than expected, resulting in either reduced future lease income over the remaining life of the asset or a lower sale value. |
n
|
Market risk includes interest rate and foreign currency risk. Interest rate risk is the risk that fluctuations in interest rates will have an impact on the Companys net finance revenue and on the market value of the Companys assets, liabilities and derivatives. Foreign exchange risk is the risk that fluctuations in exchange rates between currencies can have an economic impact on the Companys non-dollar denominated assets and liabilities. |
n
|
Liquidity risk is the risk that the Company has an inability to maintain adequate cash resources and funding capacity to meet its obligations, including under stress scenarios. |
n
|
Capital risk is the risk that the Company does not have adequate capital to cover its risks and to support its growth and strategic objectives. |
n
|
Operational risk is the risk of financial loss, damage to the Companys reputation, or other adverse impacts resulting from inadequate or failed internal processes and systems, people or external events. |
n
|
Information Technology Risk is the risk of financial loss, damage to the Companys reputation or other adverse impacts resulting from unauthorized (malicious or accidental) disclosure, modification, or destruction of information, including cyber-crime, unintentional errors and omissions, IT disruptions due to natural or man-made disasters, or failure to exercise due care and diligence in the implementation and operation of an IT system. |
n
|
Legal and Regulatory Risk is the risk that the Company is not in compliance with applicable laws and regulations, which may result in fines, regulatory criticism or business restrictions, or damage to the Companys reputation. |
n
|
Reputational Risk is the potential that negative publicity, whether true or not, will cause a decline in the value of the Company due to changes in the customer base, costly litigation, or other revenue reductions. |
n
|
the major risks inherent to CITs business activities, as defined above; |
n
|
the Enterprise Risk Framework, which includes the policies, procedures, practices and resources used to manage and assess these risks, and the decision-making governance structure that supports it; |
n
|
the Risk Appetite and Risk Tolerance Framework, which defines the level and type of risk CIT is willing to assume in its exposures and business activities, given its business objectives, and sets limits, credit authorities, target performance metrics, underwriting standards and risk acceptance criteria used to define and guide the decision-making processes; and |
n
|
management information systems, including data, models, analytics and risk reporting, to enable adequate identification, monitoring and reporting of risks for proactive management. |
n
|
Net Interest Income Sensitivity (NII Sensitivity), which measures the net impact of hypothetical changes in interest rates on net finance revenue over a 12 month period; and |
n
|
Economic Value of Equity (EVE), which measures the net impact of these hypothetical changes on the value of equity by assessing the economic value of assets, liabilities and derivatives. |
Change to NII Sensitivity and EVE
September
30, 2015
|
June
30, 2015
|
December
31, 2014
|
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
+100 bps
|
100 bps
|
+100 bps
|
100 bps
|
+100 bps
|
100 bps
|
||||||||||||||||||||||
NII
Sensitivity
|
3.4%
|
(0.9)%
|
6.3%
|
(2.2)%
|
6.4%
|
(0.8)%
|
|||||||||||||||||||||
EVE
|
0.3%
|
(0.3)%
|
2.3%
|
(2.3)%
|
1.9%
|
(1.6)%
|
n
|
Cash totaled $8.3 billion at September 30, 2015, compared to $7.1 billion at December 31, 2014 and $5.5 million at June 30, 2015, primarily due to $4.4 billion acquired in the OneWest Transaction, partially offset by cash of $1.9 billion used to pay for the acquisition. Cash at September 30, 2015 consisted of $1.1 billion related to the bank holding company and $5.9 billion at CIT Bank, N.A. (excluding $0.1 billion of restricted cash), with the remainder comprised of cash at operating subsidiaries and other restricted balances of approximately $1.3 billion. |
n
|
Securities purchased under agreements to resell (reverse repurchase agreements) totaled $100 million at September 30, 2015, down from $650 million at December 31, 2014. CIT enters into reverse repurchase agreements in an effort to improve returns on excess liquidity. These agreements are mostly short-term securities that mature predominately within three months, and are secured by the underlying collateral, which is maintained at a third-party custodian. Interest earned on these securities is included in Interest and dividends on interest bearing deposits and investments in the statement of operations. |
September 30,
2015 |
December 31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Available-for-sale securities
|
||||||||||
Debt
securities
|
$ | 3,001.3 | $ | 1,116.5 | ||||||
Equity
securities
|
14.3 | 14.0 | ||||||||
Held-to-maturity
securities
|
||||||||||
Debt
securities
|
310.7 | 352.3 | ||||||||
Non-marketable
equity investments and other
|
292.5 | 67.5 | ||||||||
Total investment
securities
|
$ | 3,618.8 | $ | 1,550.3 |
n
|
A multi-year committed revolving credit facility that has a total commitment of $1.5 billion, of which $1.4 billion was unused at September 30, 2015; and |
n
|
Committed securitization facilities and secured bank lines totaled $4.2 billion, of which $2.3 billion was unused at September 30, 2015, provided that eligible assets are available that can be funded through these facilities. |
Funding Mix
(dollars in millions)
September 30,
2015 |
December 31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Deposits
|
63 | % | 46 | % | ||||||
Unsecured
|
21 | % | 35 | % | ||||||
Secured
Borrowings:
|
||||||||||
Structured
financings
|
10 | % | 18 | % | ||||||
FHLB
Advances
|
6 | % | 1 | % |
September 30, 2015
|
December 31, 2014
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total
|
Percent of
Total |
Total
|
Percent of
Total |
||||||||||||||||
Checking and
Savings:
|
|||||||||||||||||||
Non-interest
bearing checking
|
$ | 966.6 | 3.0 | % | $ | | | ||||||||||||
Interest
bearing checking
|
3,205.1 | 9.9 | % | | | ||||||||||||||
Money
market
|
5,367.8 | 16.6 | % | 1,873.8 | 11.8 | % | |||||||||||||
Savings
|
4,679.9 | 14.5 | % | 3,941.6 | 24.9 | % | |||||||||||||
Certificates of
Deposits
|
17,940.2 | 55.5 | % | 9,942.2 | 62.7 | % | |||||||||||||
Other
|
169.3 | 0.5 | % | 92.2 | 0.6 | % | |||||||||||||
Total
|
$ | 32,328.9 | 100.0 | % | $ | 15,849.8 | 100.0 | % |
n
|
Funding costs for similar financings based on the current market environment; |
n
|
Forecasted usage of the long-dated GSI Facilities through the final maturity date in 2028; and |
n
|
Forecasted amortization, due to principal payments on the underlying ABS, which impacts the amount of the unutilized portion. |
n
|
A fixed facility fee of 2.85% per annum times the maximum facility commitment amount, |
n
|
A variable amount based on one-month or three-month U.S.D. LIBOR times the utilized amount (effectively the adjusted qualifying borrowing base) of the total return swap, and |
n
|
A reduction in interest expense due to the recognition of the payment of any OID from GSI on the various asset-backed securities. |
Debt Ratings as of September 30, 2015
S&P
|
Fitch
|
Moodys
|
DBRS
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Issuer /
Counterparty Credit Rating
|
BB-
|
BB+
|
NR
|
BB
(High)
|
||||||||||||||
Revolving Credit
Facility Rating
|
BB-
|
BB+
|
B1
|
BBB
(Low)
|
||||||||||||||
Series C Notes /
Senior Unsecured Debt Rating
|
BB-
|
BB+
|
B1
|
BB
(High)
|
||||||||||||||
Outlook
|
Positive
|
Stable
|
Positive
|
Stable
|
Total
|
2016
|
2017
|
2018
|
2019
|
2020+
|
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Structured
financings
(2)
|
$ | 5,367.9 | $ | 1,734.9 | $ | 896.5 | $ | 680.0 | $ | 452.3 | $ | 1,604.2 | ||||||||||||||
FHLB
Advances
|
3,213.5 | 2,271.5 | 42.0 | 900.0 | | | ||||||||||||||||||||
Senior
unsecured
|
10,743.4 | | 2,992.0 | 2,200.0 | 2,750.0 | 2,801.4 | ||||||||||||||||||||
Total
borrowings
|
19,324.8 | 4,006.4 | 3,930.5 | 3,780.0 | 3,202.3 | 4,405.6 | ||||||||||||||||||||
Deposits
|
32,304.5 | 22,022.0 | 2,925.3 | 1,391.5 | 1,638.8 | 4,326.9 | ||||||||||||||||||||
Credit balances
of factoring clients
|
1,609.3 | 1,609.3 | | | | | ||||||||||||||||||||
Lease rental
expense
|
313.3 | 56.2 | 48.4 | 45.1 | 43.0 | 120.6 | ||||||||||||||||||||
Total
contractual payments
|
$ | 53,551.9 | $ | 27,693.9 | $ | 6,904.2 | $ | 5,216.6 | $ | 4,884.1 | $ | 8,853.1 |
(1)
|
Projected payments of debt interest expense and obligations relating to postretirement programs are excluded. |
(2)
|
Includes non-recourse secured borrowings, which are generally repaid in conjunction with the pledged receivable maturities. |
Total
|
2016
|
2017
|
2018
|
2019
|
2020+
|
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Financing
commitments
|
$ | 7,501.4 | $ | 1,674.7 | $ | 1,048.2 | $ | 1,407.6 | $ | 1,417.3 | $ | 1,953.6 | ||||||||||||||
Aerospace
equipment purchase commitments
(1)
|
10,313.1 | 869.0 | 776.9 | 1,856.1 | 2,591.6 | 4,219.5 | ||||||||||||||||||||
Rail and other
equipment purchase commitments
|
1,279.3 | 1,124.8 | 154.5 | | | | ||||||||||||||||||||
Letters of
credit
|
378.9 | 55.0 | 61.9 | 74.6 | 153.1 | 34.3 | ||||||||||||||||||||
Deferred
purchase agreements
|
1,791.6 | 1,791.6 | | | | | ||||||||||||||||||||
Guarantees,
acceptances and other recourse obligations
|
1.4 | 1.4 | | | | | ||||||||||||||||||||
Liabilities for
unrecognized tax obligations
(2)
|
75.4 | 30.0 | 45.4 | | | | ||||||||||||||||||||
Total
contractual commitments
|
$ | 21,341.1 | $ | 5,546.5 | $ | 2,086.9 | $ | 3,338.3 | $ | 4,162.0 | $ | 6,207.4 |
(1)
|
Aerospace commitments are net of amounts on deposit with manufacturers. |
(2)
|
The balance cannot be estimated past 2017; therefore the remaining balance is reflected in 2017. |
Declaration Date
|
Payment
Date
|
Per
Share Dividend
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|
January
|
February 28, 2015
|
$ | 0.15 | |||||||
April
|
May 29, 2015
|
$ | 0.15 | |||||||
July
|
August 28, 2015
|
$ | 0.15 | |||||||
October
|
November 30, 2015
|
$ | 0.15 |
Minimum
Capital Requirements January 1, 2019
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Tier
1
Common Equity |
Tier
1
Capital |
Total
Capital |
|||||||||||||
Stated minimum
ratios
|
4.5 | % | 6.0 | % | 8.0 | % | |||||||||
Capital
conservation buffer
|
2.5 | % | 2.5 | % | 2.5 | % | |||||||||
Effective minimum
ratios
|
7.0 | % | 8.5 | % | 10.5 | % |
CIT
|
CIT Bank
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actuals
|
Requirement
|
Actuals
|
Requirement
|
||||||||||||||||
CIT
|
|||||||||||||||||||
Capital
|
|||||||||||||||||||
CET1
|
$ | 8,780.9 | $ | 4,681.1 | |||||||||||||||
Tier
1
|
8,780.9 | 4,681.1 | |||||||||||||||||
Total
|
9,156.7 | 5,022.8 | |||||||||||||||||
Risk-weighted
assets
|
70,301.8 | 35,686.6 | |||||||||||||||||
Adjusted
quarterly average assets
|
58,283.2 | 35,073.4 | |||||||||||||||||
Capital
ratios
|
|||||||||||||||||||
CET1
|
12.5 | % | 7.0% (2) | 13.1 | % | 7.0% (2) | |||||||||||||
Tier
1
|
12.5 | % | 8.5% (2) | 13.1 | % | 8.5% (2) | |||||||||||||
Total
|
13.0 | % | 10.5% (2) | 14.1 | % | 10.5% (2) | |||||||||||||
Leverage
|
15.1 | % | 4.0% | 13.3 | % | 4.0% |
(1)
|
Basel III Final Rule calculated under the Standardized Approach on a fully phased-in basis that will be required effective January 1, 2019. |
(2)
|
Required ratios under the Basel III Final Rule include the post-transition minimum capital conservation buffer effective January 1, 2019. |
Tier 1 Capital |
Partially
Phased-in Basis September 30, 2015 |
Fully
Phased-in Basis September 30, 2015 |
December
31,
2014 |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total
stockholders equity
|
$ | 10,798.7 | $ | 10,798.7 | $ | 9,068.9 | ||||||||
Effect of certain
items in accumulated other comprehensive loss excluded from Tier 1 Capital and qualifying noncontrolling interests
|
66.0 | 66.0 | 53.0 | |||||||||||
Adjusted total
equity
|
10,864.7 | 10,864.7 | 9,121.9 | |||||||||||
Less:
Goodwill
(2)
|
(1,068.4 | ) | (1,068.4 | ) | (571.3 | ) | ||||||||
Disallowed
deferred tax assets
|
(867.4 | ) | (867.4 | ) | (416.8 | ) | ||||||||
Disallowed
intangible assets
(2)
|
(59.2 | ) | (148.0 | ) | (25.7 | ) | ||||||||
Investment in
certain subsidiaries
|
NA | NA | (36.7 | ) | ||||||||||
Other Tier 1
components
(3)
|
| | (4.1 | ) | ||||||||||
Common Equity
Tier 1 Capital
|
8,869.7 | 8,780.9 | 8,067.3 | |||||||||||
Tier 1
Capital
|
8,869.7 | 8,780.9 | 8,067.3 | |||||||||||
Tier 2
Capital
|
||||||||||||||
Qualifying
reserve for credit losses and other reserves
(4)
|
375.8 | 375.8 | 381.8 | |||||||||||
Less: Investment
in certain subsidiaries
|
NA | NA | (36.7 | ) | ||||||||||
Total qualifying
capital
|
$ | 9,245.5 | $ | 9,156.7 | $ | 8,412.4 | ||||||||
Risk-weighted
assets
|
$ | 69,610.6 | $ | 70,301.8 | $ | 55,480.9 | ||||||||
BHC
Ratios
|
||||||||||||||
Common Equity
Tier 1 Capital Ratio
|
12.7 | % | 12.5 | % | NA | |||||||||
Tier 1 Capital
Ratio
|
12.7 | % | 12.5 | % | 14.5 | % | ||||||||
Total Capital
Ratio
|
13.3 | % | 13.0 | % | 15.2 | % | ||||||||
Tier 1 Leverage
Ratio
|
15.2 | % | 15.1 | % | 17.4 | % | ||||||||
CIT Bank
Ratios
|
||||||||||||||
Common Equity
Tier 1 Capital Ratio
|
13.3 | % | 13.1 | % | NA | |||||||||
Tier 1 Capital
Ratio
|
13.3 | % | 13.1 | % | 13.0 | % | ||||||||
Total Capital
Ratio
|
14.2 | % | 14.1 | % | 14.2 | % | ||||||||
Tier 1 Leverage
Ratio
|
13.5 | % | 13.3 | % | 12.2 | % |
(1)
|
The September 30, 2015 presentations reflects the risk-based capital guidelines under Basel III, which became effective on January 1, 2015, on a partially phased-in basis, and under the fully phased-in basis. The December 31, 2014 reflects the risk-based capital guidelines under then effective Basel I. |
(2)
|
Goodwill and disallowed intangible assets adjustments also reflect the portion included within assets held for sale. |
(3)
|
Includes the Tier 1 capital charge for nonfinancial equity investments under Basel I. |
(4)
|
Other reserves represents additional credit loss reserves for unfunded lending commitments, letters of credit, and deferred purchase agreements, all of which are recorded in Other Liabilities. |
Risk-Weighted Assets
(dollars in millions)
September
30,
2015 |
December
31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Balance sheet
assets
|
$ | 68,125.5 | $ | 47,880.0 | ||||||
Risk weighting
adjustments to balance sheet assets
|
(15,244.1 | ) | (8,647.8 | ) | ||||||
Off balance sheet
items
|
16,729.2 | 16,248.7 | ||||||||
Risk-weighted
assets
|
$ | 69,610.6 | $ | 55,480.9 |
September 30,
2015 |
December 31,
2014 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Total common
stockholders equity
|
$ | 10,798.7 | $ | 9,068.9 | ||||||
Less:
Goodwill
|
(1,135.1 | ) | (571.3 | ) | ||||||
Intangible
assets
|
(201.3 | ) | (25.7 | ) | ||||||
Tangible book
value
|
$ | 9,462.3 | $ | 8,471.9 | ||||||
Book value per
share
|
$ | 53.74 | $ | 50.13 | ||||||
Tangible book
value per share
|
$ | 47.09 | $ | 46.83 |
(1)
|
Tangible book value and tangible book value per share are non-GAAP measures. |
September
30,
2015 |
December
31,
2014 |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
ASSETS:
|
|||||||||||
Cash and deposits
with banks
|
$ | 6,011.2 | $ | 3,684.9 | |||||||
Investment
securities
|
2,473.0 | 285.2 | |||||||||
Assets held for
sale
|
229.0 | 22.8 | |||||||||
Commercial
loans
|
22,671.6 | 14,982.8 | |||||||||
Consumer
loans
|
6,929.2 | | |||||||||
Allowance for
loan losses
|
(307.5 | ) | (269.5 | ) | |||||||
Operating lease
equipment, net
|
2,514.0 | 2,026.3 | |||||||||
Indemnification
Assets
|
465.0 | | |||||||||
Goodwill
|
765.8 | 167.8 | |||||||||
Intangible
assets
|
191.5 | 12.1 | |||||||||
Other
assets
|
1,127.9 | 203.6 | |||||||||
Assets of
discontinued operations
|
513.8 | | |||||||||
Total
Assets
|
$ | 43,584.5 | $ | 21,116.0 | |||||||
LIABILITIES AND EQUITY:
|
|||||||||||
Deposits
|
$ | 32,400.7 | $ | 15,877.9 | |||||||
FHLB
advances
|
3,219.0 | 254.7 | |||||||||
Borrowings
|
1,011.5 | 1,607.8 | |||||||||
Other
borrowings
|
| 303.1 | |||||||||
Other
liabilities
|
725.7 | 356.1 | |||||||||
Liabilities of
discontinued operations
|
671.9 | | |||||||||
Total
Liabilities
|
38,028.8 | 18,399.6 | |||||||||
Total
Equity
|
5,555.7 | 2,716.4 | |||||||||
Total
Liabilities and Equity
|
$ | 43,584.5 | $ | 21,116.0 | |||||||
Capital Ratios*
|
|||||||||||
Common Equity
Tier 1 Capital
|
13.1 | % | NA | ||||||||
Tier 1 Capital
Ratio
|
13.1 | % | 13.0 | % | |||||||
Total Capital
Ratio
|
14.1 | % | 14.2 | % | |||||||
Tier 1
Leverage ratio
|
13.3 | % | 12.2 | % |
*
|
The capital ratios presented above for September 30, 2015 are reflective of the fully-phased in BASEL III approach. |
Financing and Leasing Assets by Segment
(dollars in millions)
North America
Banking
|
$ | 21,329.2 | $ | 12,518.8 | ||||||
Legacy Consumer
Mortgages
|
5,636.3 | | ||||||||
Transportation
& International Finance
|
5,378.3 | 4,513.1 | ||||||||
Total
|
$ | 32,343.8 | $ | 17,031.9 |
Condensed Statements of Operations
(dollars in millions)
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Interest
income
|
$ | 366.7 | $ | 203.3 | $ | 184.5 | $ | 767.5 | $ | 512.1 | |||||||||||||
Interest
expense
|
(95.6 | ) | (76.9 | ) | (65.1 | ) | (246.6 | ) | (171.6 | ) | |||||||||||||
Net interest
revenue
|
271.1 | 126.4 | 119.4 | 520.9 | 340.5 | ||||||||||||||||||
Provision for
credit losses
|
(44.3 | ) | (21.9 | ) | (33.6 | ) | (98.3 | ) | (73.0 | ) | |||||||||||||
Net interest
revenue, after credit provision
|
226.8 | 104.5 | 85.8 | 422.6 | 267.5 | ||||||||||||||||||
Rental income on
operating leases
|
76.0 | 69.1 | 61.6 | 215.2 | 161.3 | ||||||||||||||||||
Other
income
|
33.4 | 23.8 | 23.6 | 85.9 | 73.6 | ||||||||||||||||||
Total net
revenue, net of interest expense and credit provision
|
336.2 | 197.4 | 171.0 | 723.7 | 502.4 | ||||||||||||||||||
Operating
expenses
|
(184.1 | ) | (117.3 | ) | (117.2 | ) | (401.6 | ) | (281.5 | ) | |||||||||||||
Depreciation on
operating lease equipment
|
(31.4 | ) | (29.1 | ) | (24.4 | ) | (89.1 | ) | (65.3 | ) | |||||||||||||
Maintenance and
other operating lease expenses
|
(2.5 | ) | (1.3 | ) | (2.3 | ) | (5.0 | ) | (5.9 | ) | |||||||||||||
Income before
provision for income taxes
|
118.2 | 49.7 | 27.1 | 228.0 | 149.7 | ||||||||||||||||||
Provision for
income taxes
|
(40.2 | ) | (12.1 | ) | (10.6 | ) | (77.3 | ) | (58.8 | ) | |||||||||||||
Income from
continuing operations
|
78.0 | 37.6 | 16.5 | 150.7 | 90.9 | ||||||||||||||||||
Loss on
discontinued operations
|
(3.7 | ) | | | (3.7 | ) | | ||||||||||||||||
Net
income
|
$ | 74.3 | $ | 37.6 | $ | 16.5 | $ | 147.0 | $ | 90.9 | |||||||||||||
New business
volume
|
$ | 2,535.0 | $ | 1,995.7 | $ | 2,207.4 | $ | 5,980.9 | $ | 5,917.1 |
Net Finance Revenue
(dollars in millions)
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Interest
income
|
$ | 366.7 | $ | 203.3 | $ | 184.5 | $ | 767.5 | $ | 512.1 | |||||||||||||
Rental income on
operating leases
|
76.0 | 69.1 | 61.6 | 215.2 | 161.3 | ||||||||||||||||||
Finance
revenue
|
442.7 | 272.4 | 246.1 | 982.7 | 673.4 | ||||||||||||||||||
Interest
expense
|
(95.6 | ) | (76.9 | ) | (65.1 | ) | (246.6 | ) | (171.6 | ) | |||||||||||||
Depreciation on
operating lease equipment
|
(31.4 | ) | (29.1 | ) | (24.4 | ) | (89.1 | ) | (65.3 | ) | |||||||||||||
Maintenance and
other operating lease expenses
|
(2.5 | ) | (1.3 | ) | (2.3 | ) | (5.0 | ) | (5.9 | ) | |||||||||||||
Net finance
revenue
|
$ | 313.2 | $ | 165.1 | $ | 154.3 | $ | 642.0 | $ | 430.6 | |||||||||||||
Average Earning
Assets (AEA)
|
$ | 34,125.0 | $ | 21,413.7 | $ | 19,459.2 | $ | 25,600.9 | $ | 17,688.3 | |||||||||||||
As
a % of AEA:
|
|||||||||||||||||||||||
Interest
income
|
4.30 | % | 3.80 | % | 3.79 | % | 4.00 | % | 3.86 | % | |||||||||||||
Rental income on
operating leases
|
0.89 | % | 1.29 | % | 1.27 | % | 1.12 | % | 1.22 | % | |||||||||||||
Finance
revenue
|
5.19 | % | 5.09 | % | 5.06 | % | 5.12 | % | 5.08 | % | |||||||||||||
Interest
expense
|
(1.12 | )% | (1.45 | )% | (1.34 | )% | (1.29 | )% | (1.30 | )% | |||||||||||||
Depreciation on
operating lease equipment
|
(0.37 | )% | (0.54 | )% | (0.50 | )% | (0.46 | )% | (0.49 | )% | |||||||||||||
Maintenance and
other operating lease expenses
|
(0.03 | )% | (0.02 | )% | (0.05 | )% | (0.03 | )% | (0.04 | )% | |||||||||||||
Net finance
revenue
|
3.67 | % | 3.08 | % | 3.17 | % | 3.34 | % | 3.25 | % |
Select Data
(dollars in millions)
At or for the
Quarters Ended
|
Nine Months Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Select Statement of Operations Data
|
|||||||||||||||||||||||
Net interest
revenue
|
$ | 157.4 | $ | 18.6 | $ | 33.1 | $ | 185.7 | $ | 111.0 | |||||||||||||
Provision for
credit losses
|
(49.9 | ) | (18.4 | ) | (38.2 | ) | (102.9 | ) | (85.1 | ) | |||||||||||||
Total
non-interest income
|
578.5 | 595.2 | 559.2 | 1,790.7 | 1,735.5 | ||||||||||||||||||
Total
non-interest expenses
|
(549.2 | ) | (442.3 | ) | (437.4 | ) | (1,436.0 | ) | (1,303.0 | ) | |||||||||||||
Income from
continuing operations
|
696.8 | 115.3 | 515.4 | 915.8 | 825.5 | ||||||||||||||||||
Net
income
|
693.1 | 115.3 | 514.9 | 912.1 | 879.0 | ||||||||||||||||||
Per Common Share Data
|
|||||||||||||||||||||||
Diluted income
per common share continuing operations
|
$ | 3.63 | $ | 0.66 | $ | 2.76 | $ | 5.05 | $ | 4.31 | |||||||||||||
Diluted income
per common share
|
$ | 3.61 | $ | 0.66 | $ | 2.76 | $ | 5.03 | $ | 4.59 | |||||||||||||
Book value per
common share
|
$ | 53.74 | $ | 50.91 | $ | 49.10 | |||||||||||||||||
Tangible book
value per common share
|
$ | 47.09 | $ | 47.51 | $ | 45.87 | |||||||||||||||||
Dividends
declared per common share
|
$ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.45 | $ | 0.35 | |||||||||||||
Dividend payout
ratio
|
4.1 | % | 22.8 | % | 5.4 | % | 8.9 | % | 8.1 | % | |||||||||||||
Performance Ratios
|
|||||||||||||||||||||||
Return on
average common stockholders equity
|
27.7 | % | 5.2 | % | 23.6 | % | 13.3 | % | 12.6 | % | |||||||||||||
Net finance
revenue as a percentage of average earning assets
|
3.67 | % | 3.33 | % | 3.57 | % | 3.43 | % | 3.47 | % | |||||||||||||
Return on
average continuing operations total assets
|
4.65 | % | 0.99 | % | 4.54 | % | 2.38 | % | 2.46 | % | |||||||||||||
Total ending
equity to total ending assets
|
15.9 | % | 18.9 | % | 19.4 | % | |||||||||||||||||
Balance Sheet Data
|
|||||||||||||||||||||||
Loans including
receivables pledged
|
$ | 32,406.2 | $ | 19,649.3 | $ | 19,785.8 | |||||||||||||||||
Allowance for
loan losses
|
(335.0 | ) | (350.9 | ) | (357.7 | ) | |||||||||||||||||
Operating lease
equipment, net
|
15,538.2 | 15,109.6 | 15,183.8 | ||||||||||||||||||||
Goodwill
|
1,135.1 | 565.9 | 557.3 | ||||||||||||||||||||
Total cash and
interest bearing deposits
|
8,259.9 | 5,465.3 | 6,543.5 | ||||||||||||||||||||
Investments
securities and securities purchased under agreements to resell
|
3,718.8 | 2,442.9 | | ||||||||||||||||||||
Assets of
discontinued operation
|
513.8 | | | ||||||||||||||||||||
Total
assets
|
68,125.5 | 46,657.2 | 46,481.0 | ||||||||||||||||||||
Deposits
|
32,328.9 | 17,267.8 | 14,483.2 | ||||||||||||||||||||
Borrowings
|
19,320.5 | 16,441.6 | 18,923.4 | ||||||||||||||||||||
Liabilities of
discontinued operation
|
671.9 | | | ||||||||||||||||||||
Total common
stockholders equity
|
10,798.7 | 8,807.1 | 9,005.2 | ||||||||||||||||||||
Credit Quality
|
|||||||||||||||||||||||
Non-accrual
loans as a percentage of finance receivables
|
0.66 | % | 1.01 | % | 1.02 | % | |||||||||||||||||
Net charge-offs
as a percentage of average finance receivables
|
0.86 | % | 0.48 | % | 0.39 | % | 0.63 | % | 0.53 | % | |||||||||||||
Allowance for
loan losses as a percentage of finance receivables
|
1.03 | % | 1.79 | % | 1.81 | % | |||||||||||||||||
Financial Ratios
|
|||||||||||||||||||||||
Common Equity
Tier 1 Capital Ratio
|
12.7 | % | 14.5 | % | NA | ||||||||||||||||||
Tier 1 Capital
Ratio
|
12.7 | % | 14.5 | % | 14.3 | % | |||||||||||||||||
Total Capital
Ratio
|
13.3 | % | 15.2 | % | 15.0 | % |
September 30,
2015
|
June 30, 2015
|
September 30,
2014
|
|||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Average
Balance |
Revenue /
Expense |
Average
Rate (%) |
Average
Balance |
Revenue /
Expense |
Average
Rate (%) |
Average
Balance |
Revenue /
Expense |
Average
Rate (%) |
|||||||||||||||||||||||||||||||
Interest
bearing deposits
|
$ | 5,812.4 | $ | 4.5 | 0.31 | % | $ | 4,829.4 | $ | 3.4 | 0.28 | % | $ | 5,517.4 | $ | 4.4 | 0.32 | % | |||||||||||||||||||||
Securities purchased under agreements to resell
(6)
|
387.5 | 0.6 | 0.62 | % | 675.0 | 1.0 | 0.59 | % | 275.0 | 0.4 | 0.58 | % | |||||||||||||||||||||||||||
Investments
|
2,663.2 | 18.4 | 2.76 | % | 1,510.6 | 4.6 | 1.22 | % | 860.9 | 3.6 | 1.67 | % | |||||||||||||||||||||||||||
Loans
(including held for sale)
(2)(3)
|
|||||||||||||||||||||||||||||||||||||||
U.S.
|
27,320.5 | 370.0 | 5.72 | % | 18,130.4 | 226.1 | 5.41 | % | 17,002.0 | 229.2 | 5.85 | % | |||||||||||||||||||||||||||
Non-U.S.
|
1,971.6 | 43.9 | 8.91 | % | 2,161.3 | 48.7 | 9.01 | % | 3,186.7 | 70.7 | 8.87 | % | |||||||||||||||||||||||||||
Total
loans
(2)
|
29,292.1 | 413.9 | 5.95 | % | 20,291.7 | 274.8 | 5.83 | % | 20,188.7 | 299.9 | 6.36 | % | |||||||||||||||||||||||||||
Total
interest earning assets / interest income
(2)(3)
|
38,155.2 | 437.4 | 4.77 | % | 27,306.7 | 283.8 | 4.39 | % | 26,842.0 | 308.3 | 4.83 | % | |||||||||||||||||||||||||||
Operating lease equipment, net
(including held for sale) (4) |
|||||||||||||||||||||||||||||||||||||||
U.S.
(4)
|
8,114.8 | 177.5 | 8.75 | % | 7,859.0 | 175.4 | 8.93 | % | 7,959.1 | 176.2 | 8.86 | % | |||||||||||||||||||||||||||
Non-U.S.
(4)
|
7,330.3 | 146.8 | 8.01 | % | 7,422.2 | 149.1 | 8.04 | % | 7,219.3 | 155.9 | 8.64 | % | |||||||||||||||||||||||||||
Total
operating lease equipment, net
(4)
|
15,445.1 | 324.3 | 8.40 | % | 15,281.2 | 324.5 | 8.49 | % | 15,178.4 | 332.1 | 8.75 | % | |||||||||||||||||||||||||||
Indemnification assets
|
305.6 | 0.3 | 0.39 | % | | | | | | | |||||||||||||||||||||||||||||
Total
earning assets
(2)
|
53,905.9 | 762.0 | 5.81 | % | 42,587.9 | 608.3 | 5.91 | % | 42,020.4 | 640.4 | 6.29 | % | |||||||||||||||||||||||||||
Non-interest earning assets
|
|||||||||||||||||||||||||||||||||||||||
Cash
due from banks
|
1,902.6 | 952.7 | 968.1 | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses
|
(347.9 | ) | (358.0 | ) | (345.3 | ) | |||||||||||||||||||||||||||||||||
All
other non-interest earning assets
|
4,433.4 | 3,285.5 | 2,768.3 | ||||||||||||||||||||||||||||||||||||
Assets
of discontinued operation
|
333.8 | | 0.2 | ||||||||||||||||||||||||||||||||||||
Total
Average Assets
|
$ | 60,227.8 | $ | 46,468.1 | $ | 45,411.7 | |||||||||||||||||||||||||||||||||
Borrowings
|
|||||||||||||||||||||||||||||||||||||||
Deposits
|
$ | 26,356.2 | $ | 93.1 | 1.41 | % | $ | 16,934.9 | $ | 72.2 | 1.71 | % | $ | 14,223.6 | $ | 59.2 | 1.66 | % | |||||||||||||||||||||
Borrowings
(5)
|
18,258.3 | 187.2 | 4.10 | % | 16,540.3 | 193.0 | 4.67 | % | 18,430.3 | 216.0 | 4.69 | % | |||||||||||||||||||||||||||
Total
interest-bearing liabilities
|
44,614.5 | 280.3 | 2.51 | % | 33,475.2 | 265.2 | 3.17 | % | 32,653.9 | 275.2 | 3.37 | % | |||||||||||||||||||||||||||
Non-interest bearing deposits
|
603.9 | | | ||||||||||||||||||||||||||||||||||||
Credit
balances of factoring clients
|
1,457.8 | 1,428.6 | 1,327.1 | ||||||||||||||||||||||||||||||||||||
Other
non-interest bearing liabilities
|
3,054.0 | 2,776.7 | 2,674.4 | ||||||||||||||||||||||||||||||||||||
Liabilities of discontinued operation
|
432.0 | | 0.2 | ||||||||||||||||||||||||||||||||||||
Noncontrolling interests
|
0.5 | 0.5 | 9.9 | ||||||||||||||||||||||||||||||||||||
Stockholders equity
|
10,065.1 | 8,787.1 | 8,746.2 | ||||||||||||||||||||||||||||||||||||
Total
Average Liabilities and Stockholders Equity
|
$ | 60,227.8 | $ | 46,468.1 | $ | 45,411.7 | |||||||||||||||||||||||||||||||||
Net
revenue spread
|
3.30 | % | 2.74 | % | 2.92 | % | |||||||||||||||||||||||||||||||||
Impact of
non-interest bearing sources
|
0.37 | % | 0.59 | % | 0.67 | % | |||||||||||||||||||||||||||||||||
Net
revenue/yield on earning assets
(2)
|
$ | 481.7 | 3.67 | % | $ | 343.1 | 3.33 | % | $ | 365.2 | 3.59 | % |
(1)
|
The average balances presented are derived based on month end balances during the year. Tax exempt income was not significant in any of the periods presented. Average rates are impacted by FSA accretion and amortization. |
(2)
|
The rate presented is calculated net of average credit balances for factoring clients. |
(3)
|
Non-accrual loans and related income are included in the respective categories. |
(4)
|
Operating lease rental income is a significant source of revenue; therefore, we have presented the rental revenues net of depreciation and net of Maintenance and other operating lease expenses. |
(5)
|
Interest and average rates include FSA accretion, including amounts accelerated due to redemptions or extinguishments, and accelerated original issue discount on debt extinguishment related to the GSI facility. |
(6)
|
The weighted average rate for the Securities purchased under agreements to resell is approximately 0.50% for the quarter ended September 30, 2014 based on interest income and average balances in whole dollars. |
Nine Months Ended
|
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015
|
September 30,
2014
|
||||||||||||||||||||||||||
Average
Balance |
Revenue /
Expense |
Average
Rate (%) |
Average
Balance |
Revenue /
Expense |
Average
Rate (%) |
||||||||||||||||||||||
Interest
bearing deposits
|
$ | 5,499.0 | $ | 11.9 | 0.29 | % | $ | 5,138.7 | $ | 13.5 | 0.35 | % | |||||||||||||||
Securities purchased under agreements to resell
|
535.0 | 2.3 | 0.57 | % | 110.0 | 0.4 | 0.48 | % | |||||||||||||||||||
Investments
|
1,911.3 | 26.9 | 1.88 | % | 1,850.8 | 11.7 | 0.84 | % | |||||||||||||||||||
Loans
(including held for sale)
(2)(3)
|
|||||||||||||||||||||||||||
U.S.
|
21,133.6 | 816.1 | 5.53 | % | 16,430.3 | 670.5 | 5.91 | % | |||||||||||||||||||
Non-U.S.
|
2,118.3 | 145.0 | 9.13 | % | 3,471.3 | 224.2 | 8.61 | % | |||||||||||||||||||
Total
loans
(2)
|
23,251.9 | 961.1 | 5.88 | % | 19,901.6 | 894.7 | 6.42 | % | |||||||||||||||||||
Total
interest earning assets / interest income
(2)(3)
|
31,197.2 | 1,002.2 | 4.49 | % | 27,001.1 | 920.3 | 4.78 | % | |||||||||||||||||||
Operating lease equipment, net
(including held for sale) (4) |
|||||||||||||||||||||||||||
U.S.
(4)
|
7,923.0 | 530.7 | 8.93 | % | 7,678.0 | 504.9 | 8.77 | % | |||||||||||||||||||
Non-U.S.
(4)
|
7,386.9 | 445.8 | 8.05 | % | 6,895.0 | 432.0 | 8.35 | % | |||||||||||||||||||
Total
operating lease equipment, net
(4)
|
15,309.9 | 976.5 | 8.50 | % | 14,573.0 | 936.9 | 8.57 | % | |||||||||||||||||||
Indemnification assets
|
103.0 | 0.3 | 0.39 | % | | | | ||||||||||||||||||||
Total
earning assets
(2)
|
46,610.1 | 1,979.0 | 5.85 | % | 41,574.1 | 1,857.2 | 6.15 | % | |||||||||||||||||||
Non-interest earning assets
|
|||||||||||||||||||||||||||
Cash
due from banks
|
1,282.5 | 974.5 | |||||||||||||||||||||||||
Allowance for loan losses
|
(350.4 | ) | (352.0 | ) | |||||||||||||||||||||||
All
other non-interest earning assets
|
3,726.0 | 2,577.2 | |||||||||||||||||||||||||
Assets
of discontinued operation
|
112.5 | 1,517.3 | |||||||||||||||||||||||||
Total
Average Assets
|
$ | 51,380.7 | $ | 46,291.1 | |||||||||||||||||||||||
Borrowings
|
|||||||||||||||||||||||||||
Deposits
|
$ | 19,911.2 | $ | 234.3 | 1.57 | % | $ | 13,544.9 | $ | 167.2 | 1.65 | % | |||||||||||||||
Borrowings
(5)
|
17,527.6 | 582.5 | 4.43 | % | 18,566.0 | 642.1 | 4.61 | % | |||||||||||||||||||
Total
interest-bearing liabilities
|
37,438.8 | 816.8 | 2.91 | % | 32,110.9 | 809.3 | 3.36 | % | |||||||||||||||||||
Non-interest bearing deposits
|
203.5 | | |||||||||||||||||||||||||
Credit
balances of factoring clients
|
1,467.2 | 1,311.0 | |||||||||||||||||||||||||
Other
non-interest bearing liabilities
|
2,916.4 | 2,799.5 | |||||||||||||||||||||||||
Liabilities of discontinued operation
|
145.6 | 1,296.4 | |||||||||||||||||||||||||
Noncontrolling interests
|
(1.3 | ) | 10.0 | ||||||||||||||||||||||||
Stockholders equity
|
9,210.5 | 8,763.3 | |||||||||||||||||||||||||
Total
Average Liabilities and Stockholders Equity
|
$ | 51,380.7 | $ | 46,291.1 | |||||||||||||||||||||||
Net
revenue spread
|
2.94 | % | 2.79 | % | |||||||||||||||||||||||
Impact of
non-interest bearing sources
|
0.49 | % | 0.68 | % | |||||||||||||||||||||||
Net
revenue/yield on earning assets
(2)
|
$ | 1,162.2 | 3.43 | % | $ | 1,047.9 | 3.47 | % |
(1)
|
The average balances presented are derived based on month end balances during the year. Tax exempt income was not significant in any of the years presented. Average rates are impacted by FSA accretion and amortization. |
(2)
|
The rate presented is calculated net of average credit balances for factoring clients. |
(3)
|
Non-accrual loans and related income are included in the respective categories. |
(4)
|
Operating lease rental income is a significant source of revenue; therefore, we have presented the rental revenues net of depreciation and net of Maintenance and other operating lease expenses. |
(5)
|
Interest and average rates include FSA accretion, including amounts accelerated due to redemptions or extinguishments, and accelerated original issue discount on debt extinguishment related to the GSI facility. |
Quarters
Ended
|
Nine Months
Ended
September 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September
30,
2015 |
June 30,
2015 |
September
30,
2014 |
2015
|
2014
|
|||||||||||||||||||
Total Net
Revenue
|
|||||||||||||||||||||||
Interest
income
|
$ | 437.7 | $ | 283.8 | $ | 308.3 | $ | 1,002.5 | $ | 920.3 | |||||||||||||
Rental income on
operating leases
|
539.3 | 531.7 | 535.0 | 1,601.6 | 1,546.5 | ||||||||||||||||||
Finance
revenue
|
977.0 | 815.5 | 843.3 | 2,604.1 | 2,466.8 | ||||||||||||||||||
Interest
expense
|
(280.3 | ) | (265.2 | ) | (275.2 | ) | (816.8 | ) | (809.3 | ) | |||||||||||||
Depreciation on
operating lease equipment
|
(159.1 | ) | (157.8 | ) | (156.4 | ) | (473.7 | ) | (462.5 | ) | |||||||||||||
Maintenance and
other operating lease expenses
|
(55.9 | ) | (49.4 | ) | (46.5 | ) | (151.4 | ) | (147.1 | ) | |||||||||||||
Net finance
revenue
|
481.7 | 343.1 | 365.2 | 1,162.2 | 1,047.9 | ||||||||||||||||||
Other
income
|
39.2 | 63.5 | 24.2 | 189.1 | 189.0 | ||||||||||||||||||
Total net
revenues
|
$ | 520.9 | $ | 406.6 | $ | 389.4 | $ | 1,351.3 | $ | 1,236.9 | |||||||||||||
NFR as a % of
AEA
|
3.67 | % | 3.33 | % | 3.57 | % | 3.43 | % | 3.47 | % | |||||||||||||
Net Operating
Lease Revenue
|
|||||||||||||||||||||||
Rental income on
operating leases
|
$ | 539.3 | $ | 531.7 | $ | 535.0 | $ | 1,601.6 | $ | 1,546.5 | |||||||||||||
Depreciation on
operating lease equipment
|
(159.1 | ) | (157.8 | ) | (156.4 | ) | (473.7 | ) | (462.5 | ) | |||||||||||||
Maintenance and
other operating lease expenses
|
(55.9 | ) | (49.4 | ) | (46.5 | ) | (151.4 | ) | (147.1 | ) | |||||||||||||
Net operating
lease revenue
|
$ | 324.3 | $ | 324.5 | $ | 332.1 | $ | 976.5 | $ | 936.9 |
September 30,
2015 |
December 31,
2014 |
September 30,
2014 |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Loans
|
$ | 32,406.2 | $ | 19,495.0 | $ | 19,785.8 | ||||||||
Operating lease
equipment, net
|
15,538.2 | 14,930.4 | 15,183.8 | |||||||||||
Interest bearing
deposits
|
6,606.3 | 6,241.2 | 5,322.0 | |||||||||||
Indemnification
assets
|
465.0 | | | |||||||||||
Securities
purchased under agreements to resell
|
100.0 | 650.0 | 650.0 | |||||||||||
Investment
securities
|
3,618.8 | 1,550.3 | 792.4 | |||||||||||
Assets held for
sale
|
2,154.3 | 1,218.1 | 1,102.7 | |||||||||||
Credit balances
of factoring clients
|
(1,609.3 | ) | (1,622.1 | ) | (1,433.2 | ) | ||||||||
Total earning
assets
|
$ | 59,279.5 | $ | 42,462.9 | $ | 41,403.5 | ||||||||
Average
Earning Assets (for the respective quarters)
|
$ | 52,448.1 | $ | 41,935.7 | $ | 40,973.8 |
September 30,
2015 |
December 31,
2014 |
September 30,
2014 |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total common
stockholders equity
|
$ | 10,798.7 | $ | 9,068.9 | $ | 9,005.2 | ||||||||
Less:
Goodwill
|
(1,135.1 | ) | (571.3 | ) | (557.3 | ) | ||||||||
Intangible
assets
|
(201.3 | ) | (25.7 | ) | (33.5 | ) | ||||||||
Tangible book
value
|
$ | 9,462.3 | $ | 8,471.9 | $ | 8,414.4 |
Quarters Ended
|
Nine Months Ended
September 30, |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
||||||||||||||||||
Operating
expenses
|
$ | (333.9 | ) | $ | (235.0 | ) | $ | (234.5 | ) | $ | (810.5 | ) | $ | (693.0 | ) | |||||||
Provision for
severance and facilities exiting activities
|
5.1 | 1.1 | 9.2 | 5.2 | 24.7 | |||||||||||||||||
Intangible
assets amortization
|
5.0 | 0.5 | 0.4 | 6.1 | 0.5 | |||||||||||||||||
Operating
expenses excluding restructuring costs and intangible amortization
|
$ | (323.8 | ) | $ | (233.4 | ) | $ | (224.9 | ) | $ | (799.2 | ) | $ | (667.8 | ) | |||||||
Operating
expenses excluding restructuring costs and intangible amortization as a % of AEA
|
(2.47%) | (2.27%) | (2.20%) | (2.36%) | (2.21%) | |||||||||||||||||
Total Net
Revenue
|
$ | 520.9 | $ | 406.6 | $ | 389.4 | $ | 1,351.3 | $ | 1,236.9 | ||||||||||||
Operating
expenses exclusive of restructuring costs and intangible amortization
(5)
|
$ | (323.8 | ) | $ | (233.4 | ) | $ | (224.9 | ) | $ | (799.2 | ) | $ | (667.8 | ) | |||||||
Net Efficiency
Ratio
(6)
|
62.2 | % | 57.4 | % | 57.8 | % | 59.1 | % | 54.0 | % |
Total Assets from Continuing Operations
(dollars in millions)
September 30,
2015 |
December 31,
2014 |
September 30,
2014 |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total
assets
|
$ | 68,125.5 | $ | 47,880.0 | $ | 46,481.0 | ||||||||
Assets of
discontinued operation
|
513.8 | | | |||||||||||
Total assets
from continuing operations
|
$ | 67,611.7 | $ | 47,880.0 | $ | 46,481.0 |
(1)
|
Total net revenues are the combination of net finance revenue and other income and is an aggregation of all sources of revenue for the Company. Total net revenues are used by management to monitor business performance. |
(2)
|
Total net operating lease revenues are the combination of rental income on operating leases less depreciation on operating lease equipment and maintenance and other operating lease expenses. Total net operating lease revenues are used by management to monitor portfolio performance. |
(3)
|
Earning assets are utilized in certain revenue and earnings ratios. Earning assets are net of credit balances of factoring clients. This net amount represents the amounts we fund. |
(4)
|
Tangible book value is a non-GAAP measure, which represents an adjusted common shareholders equity balance that has been reduced by goodwill and intangible assets. Tangible book value is used to compute a per common share amount, which is used to evaluate our use of equity. |
(5)
|
Operating expenses exclusive of restructuring costs and intangible amortization is a non-GAAP measure used by management to compare period over period expenses. |
(6)
|
Net efficiency ratio is a non-GAAP measurement used by management to to measure operating expenses (before restructuring costs and intangible amortization) to the level of total net revenues. |
n
|
our liquidity risk and capital management, including our capital plan, leverage, capital ratios, and credit ratings, our liquidity plan, and our plans and the potential transactions designed to enhance our liquidity and capital, and for a return of capital, |
n
|
our plans to change our funding mix and to access new sources of funding to broaden our use of deposit taking capabilities, |
n
|
our pending or potential acquisition plans, and the integration risks inherent in such acquisitions, including our recently completed acquisition of OneWest Bank, |
n
|
our credit risk management and credit quality, |
n
|
our asset/liability risk management, |
n
|
our funding, borrowing costs and net finance revenue, |
n
|
our operational risks, including success of systems enhancements and expansion of risk management and control functions, |
n
|
our mix of portfolio asset classes, including changes resulting from growth initiatives, new business initiatives, new products, acquisitions and divestitures, new business and customer retention, |
n
|
legal risks, including related to the enforceability of our agreements and to changes in laws and regulations, |
n
|
our growth rates, |
n
|
our commitments to extend credit or purchase equipment, and |
n
|
how we may be affected by legal proceedings. |
n
|
capital markets liquidity, |
n
|
risks of and/or actual economic slowdown, downturn or recession, |
n
|
industry cycles and trends, |
n
|
uncertainties associated with risk management, including credit, prepayment, asset/liability, interest rate and currency risks, |
n
|
adequacy of reserves for credit losses, |
n
|
risks inherent in changes in market interest rates and quality spreads, |
n
|
funding opportunities, deposit taking capabilities and borrowing costs, |
n
|
conditions and/or changes in funding markets and our access to such markets, including secured and unsecured term debt and the asset-backed securitization markets, |
n
|
risks of implementing new processes, procedures, and systems, including any new processes, procedures, and systems required to comply with the additional laws and regulations applicable to systematically important financial institutions, |
n
|
risks associated with the value and recoverability of leased equipment and lease residual values, |
n
|
risks of failing to achieve the projected revenue growth from new business initiatives or the projected expense reductions from efficiency improvements, |
n
|
application of fair value accounting in volatile markets, |
n
|
application of goodwill accounting in a recessionary economy, |
n
|
changes in laws or regulations governing our business and operations, or affecting our assets, including our operating lease equipment, |
n
|
changes in competitive factors, |
n
|
demographic trends, |
n
|
customer retention rates, |
n
|
risks associated with dispositions of businesses or asset portfolios, including how to replace the income associated with such businesses or portfolios and the risk of residual liabilities from such businesses or portfolios, |
n
|
risks associated with acquisitions of businesses or asset portfolios and the risks of integrating such acquisitions, including the acquisition of OneWest Bank, and |
n
|
regulatory changes and/or developments. |
Total Number
of Shares Purchased |
Average
Price Paid per Share |
Total Number of
Shares Purchased as Part of the Publicly Announced Program |
Total Dollar Amount
Purchased Under the Program |
Approximate Dollar
Value
of Shares that May Yet be Purchased Under the Program |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(dollars in millions) | (dollars in millions) | ||||||||||||||||||||
First Quarter
Purchases
|
$ | 45.43 | 7,298,793 | $ | 331.6 | ||||||||||||||||
Second Quarter
Purchases
(1)
|
$ | 45.87 | 1,329,152 | $ | 61.0 | $ | 139.0 | ||||||||||||||
Third Quarter
Purchases
|
|||||||||||||||||||||
July 1
31, 2015
(1)
|
1,976,144 | $ | 46.19 | 1,976,144 | $ | 91.3 | |||||||||||||||
August 1
31, 2015
(1)
|
1,027,749 | $ | 46.48 | 1,027,749 | $ | 47.7 | |||||||||||||||
September 1
30, 2015
(1)
|
| $ | | | $ | | |||||||||||||||
|
3,003,893 | $ | 46.28 | 3,003,893 | $ | 139.0 | |||||||||||||||
Year to date
September 30, 2015
(1)
|
11,631,838 | $ | 531.6 | $ | |
(1)
|
Share repurchased are subject to a $200 million total. |
2.1
|
Agreement and Plan of Merger, by and among CIT Group Inc., IMB HoldCo LLC, Carbon Merger Sub LLC and JCF III HoldCo I L.P., dated as of July
21, 2014 (incorporated by reference to Exhibit 2.1 to Form 8-K filed July 25, 2014).
|
|||
2.2
|
Amendment No. 1, dated as of July 21, 2015, to the Agreement and Plan of Merger, by and among CIT Group Inc., IMB HoldCo I L.P., Carbon Merger
Sub LLC and JCF III HoldCo I L.P., dated as of July 21, 2014 (incorporated by reference to Exhibit 2.1 to Form 8-K filed July 27,
2015).
|
|||
3.1
|
Third
Amended and Restated Certificate of Incorporation of the Company, dated December 8, 2009 (incorporated by reference to Exhibit 3.1 to Form 8-K filed
December 9, 2009).
|
|||
3.2
|
Amended and Restated By-laws of the Company, as amended through July 15, 2014 (incorporated by reference to Exhibit 99.1 to Form 8-K filed
July 16, 2014).
|
|||
4.1
|
Indenture dated as of January 20, 2006 between CIT Group Inc. and The Bank of New York Mellon (as successor to JPMorgan Chase Bank N.A.) for
the issuance of senior debt securities (incorporated by reference to Exhibit 4.3 to Form S-3 filed January 20, 2006).
|
|||
4.2
|
First
Supplemental Indenture dated as of February 13, 2007 between CIT Group Inc. and The Bank of New York Mellon (as successor to JPMorgan Chase Bank N.A.)
for the issuance of senior debt securities (incorporated by reference to Exhibit 4.1 to Form 8-K filed on February 13, 2007).
|
|||
4.3
|
Third
Supplemental Indenture dated as of October 1, 2009, between CIT Group Inc. and The Bank of New York Mellon (as successor to JPMorgan Chase Bank N.A.)
relating to senior debt securities (incorporated by reference to Exhibit 4.4 to Form 8-K filed on October 7, 2009).
|
|||
4.4
|
Fourth Supplemental Indenture dated as of October 16, 2009 between CIT Group Inc. and The Bank of New York Mellon (as successor to JPMorgan
Chase Bank N.A.) relating to senior debt securities (incorporated by reference to Exhibit 4.1 to Form 8-K filed October 19, 2009).
|
4.5
|
Framework Agreement, dated July 11, 2008, among ABN AMRO Bank N.V., as arranger, Madeleine Leasing Limited, as initial borrower, CIT Aerospace
International, as initial head lessee, and CIT Group Inc., as guarantor, as amended by the Deed of Amendment, dated July 19, 2010, among The Royal Bank
of Scotland N.V. (f/k/a ABN AMRO Bank N.V.), as arranger, Madeleine Leasing Limited, as initial borrower, CIT Aerospace International, as initial head
lessee, and CIT Group Inc., as guarantor, as supplemented by Letter Agreement No. 1 of 2010, dated July 19, 2010, among The Royal Bank of Scotland
N.V., as arranger, CIT Aerospace International, as head lessee, and CIT Group Inc., as guarantor, as amended and supplemented by the Accession Deed,
dated July 21, 2010, among The Royal Bank of Scotland N.V., as arranger, Madeleine Leasing Limited, as original borrower, and Jessica Leasing Limited,
as acceding party, as supplemented by Letter Agreement No. 2 of 2010, dated July 29, 2010, among The Royal Bank of Scotland N.V., as arranger, CIT
Aerospace International, as head lessee, and CIT Group Inc., as guarantor, relating to certain Export Credit Agency sponsored secured financings of
aircraft and related assets (incorporated by reference to Exhibit 4.11 to Form 10-K filed March 10, 2011).
|
|||
4.6
|
Form
of All Parties Agreement among CIT Aerospace International, as head lessee, Madeleine Leasing Limited, as borrower and lessor, CIT Group Inc., as
guarantor, various financial institutions, as original ECA lenders, ABN AMRO Bank N.V., Paris Branch, as French national agent, ABN AMRO Bank N.V.,
Niederlassung Deutschland, as German national agent, ABN AMRO Bank N.V., London Branch, as British national agent, ABN AMRO Bank N.V., London Branch,
as ECA facility agent, ABN AMRO Bank N.V., London Branch, as security trustee, and CIT Aerospace International, as servicing agent, relating to certain
Export Credit Agency sponsored secured financings of aircraft and related assets during the 2008 and 2009 fiscal years (incorporated by reference to
Exhibit 4.12 to Form 10-K filed March 10, 2011).
|
|||
4.7
|
Form
of ECA Loan Agreement among Madeleine Leasing Limited, as borrower, various financial institutions, as original ECA lenders, ABN AMRO Bank N.V., Paris
Branch, as French national agent, ABN AMRO Bank N.V., Niederlassung Deutschland, as German national agent, ABN AMRO Bank N.V., London Branch, as
British national agent, ABN AMRO Bank N.V., London Branch, as ECA facility agent, ABN AMRO Bank N.V., London Branch, as security trustee, and CIT
Aerospace International, as servicing agent, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets
during the 2008 and 2009 fiscal years (incorporated by reference to Exhibit 4.13 to Form 10-K filed March 10, 2011).
|
|||
4.8
|
Form
of Aircraft Head Lease between Madeleine Leasing Limited, as lessor, and CIT Aerospace International, as head lessee, relating to certain Export Credit
Agency sponsored secured financings of aircraft and related assets during the 2008 and 2009 fiscal years (incorporated by reference to Exhibit 4.14 to
Form 10-K filed March 10, 2011).
|
|||
4.9
|
Form
of Proceeds and Intercreditor Deed among Madeleine Leasing Limited, as borrower and lessor, various financial institutions, ABN AMRO Bank N.V., Paris
Branch, as French national agent, ABN AMRO Bank N.V., Niederlassung Deutschland, as German national agent, ABN AMRO Bank N.V., London Branch, as
British national agent, ABN AMRO Bank N.V., London Branch, as ECA facility agent, ABN AMRO Bank N.V., London Branch, as security trustee, relating to
certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2008 and 2009 fiscal years (incorporated by
reference to Exhibit 4.15 to Form 10-K filed March 10, 2011).
|
|||
4.10
|
Form
of All Parties Agreement among CIT Aerospace International, as head lessee, Jessica Leasing Limited, as borrower and lessor, CIT Group Inc., as
guarantor, various financial institutions, as original ECA lenders, Citibank International plc, as French national agent, Citibank International plc,
as German national agent, Citibank International plc, as British national agent, The Royal Bank of Scotland N.V., London Branch, as ECA facility agent,
The Royal Bank of Scotland N.V., London Branch, as security trustee, CIT Aerospace International, as servicing agent, and Citibank, N.A., as
administrative agent, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2010 fiscal year
(incorporated by reference to Exhibit 4.16 to Form 10-K filed March 10, 2011).
|
4.11
|
Form
of ECA Loan Agreement among Jessica Leasing Limited, as borrower, various financial institutions, as original ECA lenders, Citibank International plc,
as French national agent, Citibank International plc, as German national agent, Citibank International plc, as British national agent, The Royal Bank
of Scotland N.V., London Branch, as ECA facility agent, The Royal Bank of Scotland N.V., London Branch, as security trustee, and Citibank, N.A., as
administrative agent, relating to certain Export Credit Agency sponsored secured financings of aircraft and related assets during the 2010 fiscal year
(incorporated by reference to Exhibit 4.17 to Form 10-K filed March 10, 2011).
|
|||
4.12
|
Form
of Aircraft Head Lease between Jessica Leasing Limited, as lessor, and CIT Aerospace International, as head lessee, relating to certain Export Credit
Agency sponsored secured financings of aircraft and related assets during the 2010 fiscal year (incorporated by reference to Exhibit 4.18 to Form 10-K
filed March 10, 2011).
|
|||
4.13
|
Form
of Proceeds and Intercreditor Deed among Jessica Leasing Limited, as borrower and lessor, various financial institutions, as original ECA lenders,
Citibank International plc, as French national agent, Citibank International plc, as German national agent, Citibank International plc, as British
national agent, The Royal Bank of Scotland N.V., London Branch, as ECA facility agent, The Royal Bank of Scotland N.V., London Branch, as security
trustee, and Citibank, N.A., as administrative agent, relating to certain Export Credit Agency sponsored secured financings of aircraft and related
assets during the 2010 fiscal year (incorporated by reference to Exhibit 4.19 to Form 10-K filed March 10, 2011).
|
|||
4.14
|
Indenture, dated as of March 30, 2011, between CIT Group Inc. and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference
to Exhibit 4.1 to Form 8-K filed June 30, 2011).
|
|||
4.15
|
First
Supplemental Indenture, dated as of March 30, 2011, between CIT Group Inc., the Guarantors named therein, and Deutsche Bank Trust Company Americas, as
trustee (including the Form of 5.250% Note due 2014 and the Form of 6.625% Note due 2018) (incorporated by reference to Exhibit 4.2 to Form 8-K filed
June 30, 2011).
|
|||
4.16
|
Third
Supplemental Indenture, dated as of February 7, 2012, between CIT Group Inc., the Guarantors named therein, and Deutsche Bank Trust Company Americas,
as trustee (including the Form of Notes) (incorporated by reference to Exhibit 4.4 of Form 8-K dated February 13, 2012).
|
|||
4.17
|
Registration Rights Agreement, dated as of February 7, 2012, among CIT Group Inc., the Guarantors named therein, and JP Morgan Securities LLC,
as representative for the initial purchasers named therein (incorporated by reference to Exhibit 10.1 of Form 8-K dated February 13,
2012).
|
|||
4.18
|
Amended and Restated Revolving Credit and Guaranty Agreement, dated as of January 27, 2014 among CIT Group Inc., certain subsidiaries of CIT
Group Inc., as Guarantors, the Lenders party thereto from time to time and Bank of America, N.A., as Administrative Agent and L/C Issuer (incorporated
by reference to Exhibit 10.1 to Form 8-K filed January 28, 2014).
|
|||
4.19
|
Indenture, dated as of March 15, 2012, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust
Company Americas, as paying agent, security registrar and authenticating agent (incorporated by reference to Exhibit 4.1 of Form 8-K filed March 16,
2012).
|
|||
4.20
|
First
Supplemental Indenture, dated as of March 15, 2012, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust
Company Americas, as paying agent, security registrar and authenticating agent (including the Form of 5.25% Senior Unsecured Note due 2018)
(incorporated by reference to Exhibit 4.2 of Form 8-K filed March 16, 2012).
|
|||
4.21
|
Second Supplemental Indenture, dated as of May 4, 2012, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche
Bank Trust Company Americas, as paying agent, security registrar and authenticating agent (including the Form of 5.000% Senior Unsecured Note due 2017
and the Form of 5.375% Senior Unsecured Note due 2020) (incorporated by reference to Exhibit 4.2 of Form 8-K filed May 4, 2012).
|
|||
4.22
|
Third
Supplemental Indenture, dated as of August 3, 2012, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche Bank Trust
Company Americas, as paying agent, security registrar and authenticating agent (including the Form of 4.25% Senior Unsecured Note due 2017 and the Form
of 5.00% Senior Unsecured Note due 2022) (incorporated by reference to Exhibit 4.2 to Form 8-K filed August 3, 2012).
|
4.23
|
Fourth Supplemental Indenture, dated as of August 1, 2013, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and
Deutsche Bank Trust Company Americas, as paying agent, security registrar and authenticating agent (including the Form of 5.00% Senior Unsecured Note
due 2023) (incorporated by reference to Exhibit 4.2 to Form 8-K filed August 1, 2013).
|
|||
4.24
|
Fifth
Supplemental Indenture, dated as of February 19, 2014, among CIT Group Inc., Wilmington Trust, National Association, as trustee, and Deutsche Bank
Trust Company Americas, as paying agent, security registrar and authenticating agent (including the Form of 3.875% Senior Unsecured Note due 2019)
(incorporated by reference to Exhibit 4.2 to Form 8-K filed February 19, 2014).
|
|||
10.1*
|
Amended and Restated CIT Group Inc. Long-Term Incentive Plan (as amended and restated effective December 10, 2009) (incorporated by reference
to Exhibit 4.1 to Form S-8 filed January 11, 2010).
|
|||
10.2*
|
CIT
Group Inc. Supplemental Retirement Plan (As Amended and Restated Effective as of January 1, 2008) (incorporated by reference to Exhibit 10.27 to Form
10-Q filed May 12, 2008).
|
|||
10.3*
|
CIT
Group Inc. Supplemental Savings Plan (As Amended and Restated Effective as of January 1, 2008) (incorporated by reference to Exhibit 10.28 to Form 10-Q
filed May 12, 2008).
|
|||
10.4*
|
New
Executive Retirement Plan of CIT Group Inc. (As Amended and Restated as of January 1, 2008) (incorporated by reference to Exhibit 10.29 to Form 10-Q
filed May 12, 2008).
|
|||
10.5*
|
Form
of CIT Group Inc. Long-term Incentive Plan Stock Option Award Agreement (One Year Vesting) (incorporated by reference to Exhibit 10.35 to Form 10-Q
filed August 9, 2010).
|
|||
10.6*
|
Form
of CIT Group Inc. Long-term Incentive Plan Stock Option Award Agreement (Three Year Vesting) (incorporated by reference to Exhibit 10.36 to Form 10-Q
filed August 9, 2010).
|
|||
10.7*
|
Form
of CIT Group Inc. Long-term Incentive Plan Restricted Stock Unit Director Award Agreement (Initial Grant) (incorporated by reference to Exhibit 10.39
to Form 10-Q filed August 9, 2010).
|
|||
10.8*
|
Form
of CIT Group Inc. Long-term Incentive Plan Restricted Stock Unit Director Award Agreement (Annual Grant) (incorporated by reference to Exhibit 10.40 to
Form 10-Q filed August 9, 2010).
|
|||
10.9*
|
Amended and Restated Employment Agreement, dated as of May 7, 2008, between CIT Group Inc. and C. Jeffrey Knittel (incorporated by reference
to Exhibit 10.35 to Form 10-K filed March 2, 2009).
|
|||
10.10*
|
Amendment to Employment Agreement, dated December 22, 2008, between CIT Group Inc. and C. Jeffrey Knittel (incorporated by reference to
Exhibit 10.37 to Form 10-K filed March 2, 2009).
|
|||
10.11**
|
Airbus A320 NEO Family Aircraft Purchase Agreement, dated as of July 28, 2011, between Airbus S.A.S. and C.I.T. Leasing Corporation
(incorporated by reference to Exhibit 10.35 of Form 10-Q/A filed February 1, 2012).
|
|||
10.12**
|
Amended and Restated Confirmation, dated June 28, 2012, between CIT TRS Funding B.V. and Goldman Sachs International, and Credit Support Annex
and ISDA Master Agreement and Schedule, each dated October 26, 2011, between CIT TRS Funding B.V. and Goldman Sachs International, evidencing a $625
billion securities based financing facility (incorporated by reference to Exhibit 10.32 to Form 10-Q filed August 9, 2012).
|
|||
10.13**
|
Third
Amended and Restated Confirmation, dated June 28, 2012, between CIT Financial Ltd. and Goldman Sachs International, and Amended and Restated ISDA
Master Agreement Schedule, dated October 26, 2011 between CIT Financial Ltd. and Goldman Sachs International, evidencing a $1.5 billion securities
based financing facility (incorporated by reference to Exhibit 10.33 to Form 10-Q filed August 9, 2012).
|
|||
10.14**
|
ISDA
Master Agreement and Credit Support Annex, each dated June 6, 2008, between CIT Financial Ltd. and Goldman Sachs International related to a $1.5
billion securities based financing facility (incorporated by reference to Exhibit 10.34 to Form 10-Q filed August 11, 2008).
|
|||
10.15
|
Form
of CIT Group Inc. Long-Term Incentive Plan Performance Stock Unit Award Agreement (with Good Reason) (incorporated by reference to Exhibit 10.36 to
Form 10-Q filed May 10, 2012).
|
|||
10.16
|
Form
of CIT Group Inc. Long-Term Incentive Plan Performance Stock Unit Award Agreement (without Good Reason) (incorporated by reference to Exhibit 10.37 to
Form 10-Q filed May 10, 2012).
|
10.17*
|
Assignment and Extension of Employment Agreement, dated February 6, 2013, by and among CIT Group Inc., C. Jeffrey Knittel and C.I.T. Leasing
Corporation (incorporated by reference to Exhibit 10.34 to Form 10-Q filed November 6, 2013).
|
|||
10.18*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.36 to Form 10-K filed March
1, 2013).
|
|||
10.19*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (Executives with Employment Agreements) (incorporated by reference to
Exhibit 10.37 to Form 10-K filed March 1, 2013).
|
|||
10.20*
|
CIT
Employee Severance Plan (Effective as of November 6, 2013) (incorporated by reference to Exhibit 10.37 in Form 10-Q filed November 6,
2013).
|
|||
10.21
|
Stockholders Agreement, by and among CIT Group Inc. and the parties listed on the signature pages thereto, dated as of July 21, 2014
(incorporated by reference to Exhibit 10.1 to Form 8-K filed July 25, 2014).
|
|||
10.22*
|
Retention Letter Agreement, dated July 21, 2014, between CIT Group Inc. and Nelson Chai and Attached Restricted Stock Unit Award Agreement
(incorporated by reference to Exhibit 10.4 to Form 8-K filed July 25, 2014).
|
|||
10.23*
|
Extension to Term of Employment Agreement, dated January 2, 2014, between CIT Group Inc. and C. Jeffrey Knittel (incorporated by reference to
Exhibit 10.33 to Form 10-Q filed August 6, 2014).
|
|||
10.24*
|
Amendment to Employment Agreement, dated January 16, 2015, between CIT Group Inc. and C. Jeffrey Knittel (incorporated by reference to Exhibit
10.29 to Form 10-K filed February 20, 2015).
|
|||
10.25*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (with Performance Based Vesting) (2013) (incorporated by reference to
Exhibit 10.30 to Form 10-K filed February 20, 2015).
|
|||
10.26*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (with Performance Based Vesting) (2013) (Executives with Employment
Agreements) (incorporated by reference to Exhibit 10.31 to Form 10-K filed February 20, 2015).
|
|||
10.27*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (with Performance Based Vesting) (2014) (incorporated by reference to
Exhibit 10.32 to Form 10-K filed February 20, 2015).
|
|||
10.28*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement (with Performance Based Vesting) (Executives with Employment
Agreements) (2014) (incorporated by reference to Exhibit 10.33 to Form 10-K filed February 20, 2015).
|
|||
10.29*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2013) (incorporated by reference to Exhibit 10.30 to Form 10-Q filed
August 5, 2015).
|
|||
10.30*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2013) (Executives with Employment Agreements) (incorporated by
reference to Exhibit 10.31 to Form 10-Q filed August 5, 2015).
|
|||
10.31*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2014) (Executives with Employment Agreements) (incorporated by
reference to Exhibit 10.32 to Form 10-Q filed August 5, 2015).
|
|||
10.32*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2014) (incorporated by reference to Exhibit 10.33 to Form 10-Q filed
August 5, 2015).
|
|||
10.33*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2015) (with ROTCE and Credit Provision Performance Measures)
(incorporated by reference to Exhibit 10.34 to Form 10-Q filed August 5, 2015).
|
|||
10.34*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2015) (with ROTCE and Credit Provision Performance Measures)
(Executives with Employment Agreements) (incorporated by reference to Exhibit 10.35 to Form 10-Q filed August 5, 2015).
|
|||
10.35*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2015) (with Average Earnings per Share and Average Pre-Tax Return on
Assets Performance Measures) (incorporated by reference to Exhibit 10.36 to Form 10-Q filed August 5, 2015).
|
10.36*
|
Form
of CIT Group Inc. Long-Term Incentive Plan Performance Share Unit Award Agreement (2015) (with Average Earnings per Share and Average Pre-Tax Return on
Assets Performance Measures) (Executives with Employment Agreements) (incorporated by reference to Exhibit 10.37 to Form 10-Q filed August 5,
2015).
|
|||
10.37*
|
Retention Letter Agreement, dated July 21, 2014, between CIT Group Inc. and Steven T. Mnuchin (incorporated by reference to Exhibit 10.2 to
Form 8-K filed July 25, 2014).
|
|||
10.38*
|
Retention Letter Agreement, dated July 21, 2014, between CIT Group Inc. and Joseph Otting and Attached Restricted Stock Award Agreements
(incorporated by reference to Exhibit 10.3 to Form 8-K filed July 25, 2014).
|
|||
10.39*
|
Offer
Letter, dated October 27, 2015, between CIT Group Inc. and Ellan R. Alemany, including Attached Exhibits.
|
|||
12.1
|
CIT
Group Inc. and Subsidiaries Computation of Ratio of Earnings to Fixed Charges.
|
|||
31.1
|
Certification of John A. Thain pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Commission, as promulgated pursuant to
Section 13(a) of the Securities Exchange Act and Section 302 of the Sarbanes-Oxley Act of 2002.
|
|||
31.2
|
Certification of Scott T. Parker pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Commission, as promulgated pursuant to
Section 13(a) of the Securities Exchange Act and Section 302 of the Sarbanes-Oxley Act of 2002.
|
|||
32.1***
|
Certification of John A. Thain pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|||
32.2***
|
Certification of Scott T. Parker pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|||
101.INS
|
XBRL
Instance Document (Includes the following financial information included in the Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated
Balance Sheets, (iii) the Consolidated Statements of Stockholders Equity, (iv) Consolidated Statements of Comprehensive Income (Loss), (v) the
Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
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101.SCH
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Taxonomy Extension Schema Document.
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101.CAL
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Taxonomy Extension Calculation Linkbase Document.
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101.LAB
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Taxonomy Extension Label Linkbase Document.
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101.PRE
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Taxonomy Extension Presentation Linkbase Document.
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101.DEF
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Taxonomy Extension Definition Linkbase Document.
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Indicates a management contract or compensatory plan or arrangement. |
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Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission as part of an application for granting confidential treatment pursuant to the Securities Exchange Act of 1934, as amended. |
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This information is furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any filing under the Securities Act of 1933. |
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November 13,
2015
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CIT
GROUP INC.
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/s/ E. Carol Hayles
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E.
Carol Hayles
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Executive Vice President and Chief Financial Officer
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EXHIBIT 10.39
Robert J. Ingato
Executive Vice President,
General Counsel and Secretary
October 23, 2015
Ellen R. Alemany
11 Reimer Road
Scarsdale, NY 10583
Dear Ellen:
We are pleased to offer you full-time employment with CIT Group Inc. (“ CIT ”). Subject to the terms and conditions below, this offer letter will be effective on the first day of your employment which is anticipated to be November 1, 2015 (the “ Effective Date ”).
Positions and Reporting . As of the Effective Date, you will serve as Vice Chairman of CIT, initially responsible for working with the current Chairman and Chief Executive Officer of CIT on the transition of his responsibilities to you. Effective April 1, 2016, your title will change to Chief Executive Officer of CIT and you will also begin to serve as Chairman of the Board of Directors of CIT Bank, N.A. (“ CIT Bank ”). In each of the foregoing positions, you will report only and directly to the Boards of Directors of CIT (the “ Board ”) and CIT Bank, respectively.
Total Target Compensation . Your initial annualized base salary rate will be eight hundred thousand dollars ($800,000). In addition, for performance year 2015, you will have a target short-term incentive (“ STI ”) of two hundred thousand dollars ($200,000) payable in cash. The actual payout of the STI for performance year 2015 will be based on your performance against integration-related objectives. For performance year 2016, you will have a total target compensation equal in value to six million five hundred thousand dollars ($6,500,000), consisting of your annualized base salary of eight hundred thousand dollars ($800,000), a STI of one million two hundred thousand dollars ($1,200,000) payable in cash, and a target long-term incentive (“ LTI ”) of four million five hundred thousand dollars ($4,500,000) (the “ 2016 Total Target Compensation ”) payable in a form and manner approved by the Board and currently anticipated to be equity-based. The actual payout of the STI and LTI for performance years 2016 and thereafter will be based on, among other things, your performance relative to objectives established by the Board and CIT’s results, and shall be in such amounts as are approved by the Board. For performance years 2017 and beyond, you will have a total target compensation no less than ninety percent (90%) of the 2016 Total Target Compensation, which will be allocated among cash and equity-based awards in the form and manner determined by the Board, provided that your annualized base salary will not be less than eight hundred thousand dollars ($800,000) (the “ Total Target Compensation ”).
The grant, payment and/or settlement of the incentive awards described above are subject to the terms and conditions of the applicable Award Agreements and the related policies and plans under which such awards are granted as well as any applicable laws and regulations, and are contingent upon you being employed by CIT in good standing on the respective payment date and vesting date, as applicable. If your employment with CIT terminates at any time, for any reason, the compensation and benefits outlined in this offer letter will cease to be in effect as of your last day of employment, except (i) as expressly provided below in this offer letter concerning severance; (ii) as expressly provided under any equity-based award agreements; or (iii) with respect to any payments or benefits that were vested on your last day of employment pursuant to the terms of the CIT employee benefit plans in which you participated.
CIT Group Inc. | tel: 973-740-5664 | |
1 CIT Drive | robert.ingato@cit.com | |
Livingston, New Jersey 07039 |
Ellen R. Alemany | |
Page 2 of 4 |
RSU Award . CIT will grant you a one-time equity-based award with an initial grant value equal to two million seven hundred thousand dollars ($2,700,000) in the form of Restricted Stock Units (“ RSUs ”), subject to the terms and conditions of an Award Agreement (in the form attached hereto as Exhibit A ) and the related policies and plans under which such awards are granted as well as any applicable laws and regulations. The RSUs will be granted as of the close of business on the day following the public release of CIT’s 3 rd Quarter 2015 earnings (the “ Grant Date ”). The number of RSUs to be awarded will be determined based on the closing price of CIT’s common stock that is trading on the New York Stock Exchange on the Grant Date. The RSUs will vest on a pro rata basis on each of March 8, 2016, March 8, 2017 and March 8, 2018. The RSUs are not included in the calculation of retirement, severance, or other benefits.
Employee Benefits . Upon commencement of your employment, you will be eligible for health and welfare benefits as well as paid vacation, holidays and personal days in accordance with applicable CIT plans and policies, which may be amended from time to time. CIT also will provide you with a car and driver to facilitate your travel beginning on April 1, 2016.
Severance . If you incur an Eligible Termination of Employment (as defined in Appendix A hereto), CIT will pay you an amount equal to (i) your annualized base salary plus (ii) a Severance Bonus (as calculated below) multiplied by a fraction, the numerator of which is the number of full and partial months worked during the year in which your employment is terminated and the denominator of which is 12; provided, however, if your termination date is on or after January 1 of a year, but prior to the time that the STI, if any, for the year preceding such termination date is paid, the numerator with respect to the STI shall be increased by the number of months you were employed in the year preceding your termination date. For purposes of the prior sentence, the “Severance Bonus” shall be equal to, the sum of your STI and LTI, to the extent such LTI has not yet been awarded, for the year in which your employment is terminated or, if such targets have not yet been established, the targets for the year immediately preceding your termination date (“ Severance Amount ”). The foregoing notwithstanding, if the amount that would be payable to you under the CIT Employee Severance Plan as in effect from time to time (the “ Severance Plan ”), based on participation at the Executive Management Committee level, is greater than the Severance Amount described above, you will instead be paid the amount payable under the Severance Plan but in accordance with the terms and conditions of this offer letter. Any such severance payments are contingent upon your execution and non-revocation of a confidential separation agreement and general release in the form customarily used by CIT under the Severance Plan (the “ Release ”), which Release must be signed by you and returned to the Company within forty-five (45) days of your date of termination and become effective in accordance with its terms. The applicable severance payment will be paid to you within thirty days after the Release becomes effective unless the 45-day period for your review and execution of the Release spans two calendar years, in which case you will be paid in the later calendar year. To the extent you are paid a severance payment in accordance with the terms of this offer letter, you will not be eligible for, and will not receive, any payments or benefits under the Severance Plan.
Employment Screening and Required Agreements . This offer of employment is contingent upon (i) you passing, to CIT’s satisfaction, all requisite pre- and post-employment background and other checks as well as a drug screen; and (ii) you executing the Non-Competition, Non-Solicitation, Confidentiality and Non-Disparagement Agreement attached hereto as Exhibit B and Arbitration Agreement attached hereto as Exhibit C .
Ellen R. Alemany | |
Page 3 of 4 |
Miscellaneous .
CIT and you intend that the benefits and payments described in this offer letter will comply with the requirements of section 409A of the Internal Revenue Code of 1986, as amended, and the regulations, guidance and other interpretative authority issued thereunder to the extent subject thereto (“ Section 409A ”), and that this letter will be interpreted and construed consistent with that intent. You agree that CIT may delay any payment or portion thereof that may be due to you in accordance with the payment timing requirements of Section 409A.
As part of your employment with CIT, you agree to abide by all of CIT’s policies and procedures as they presently exist, and as they are amended from time to time.
Notwithstanding anything contained in this offer letter, the nature of your employment remains “at-will.” This means that either you or CIT may terminate your employment at any time, for any or no reason, and with or without cause or prior notice.
This offer letter and the appendix and agreements annexed hereto together set forth the full and complete agreement regarding the terms of your employment with CIT and supersede any and all prior oral or written communications. To the extent there is any inconsistency between this offer letter and any applicable plans, this letter will govern. This offer letter is governed by the laws of the State of New York, without giving effect to any conflicts of laws provisions.
Your signature below indicates that you understand and agree to the terms set forth in this offer letter. If you do not return signed originals of this offer letter and the aforementioned agreements to me within such five calendar day period, this offer will become void and expire.
Sincerely,
/s/ Robert J. Ingato
Robert J. Ingato
I HAVE READ AND UNDERSTAND THE FOREGOING OFFER LETTER AND AGREE TO ACCEPT EMPLOYMENT ON THESE TERMS.
/s/ Ellen R. Alemany |
10/26/15 |
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Ellen R. Alemany | Date |
Ellen R. Alemany | |
Page 4 of 4 |
Appendix A
The following definitions shall be incorporated by reference in the offer letter:
Eligible Termination of Employment . (a) CIT’s involuntary termination of your employment other than for Cause, or (b) a Good Reason Termination.
Good Reason Termination . Your voluntary termination of your employment for Good Reason; provided, however, that a Termination for Good Reason shall not occur unless (a) you have provided CIT with written notice specifying in detail the alleged condition of Good Reason within thirty days of the existence of such condition; (b) CIT has failed to cure such alleged condition within ninety days following its receipt of such written notice; and (c) if the Board has determined that CIT has failed to cure such alleged condition, you initiate a separation from service within five days following the end of such ninety-day cure period.
Good Reason . Without your consent, (i) a material reduction in your job duties, responsibilities, titles or positions (except a temporary reduction while you are physically or mentally incapacitated); or (ii) a ten percent (10%) or greater reduction in your Total Target Compensation (as defined in the offer letter); or (iii) your reassignment to a work location that is more than fifty miles from your immediately preceding work location and which increases the distance you have to commute to work by more than fifty miles.
Cause . For purpose of this offer letter, “Cause” means: (i) the commission of a misdemeanor involving moral turpitude or a felony; (ii) your acts or omissions that cause or may reasonably be expected to cause material injury to CIT or it affiliates, vendors, customers, or business partners or is intended to result in personal gain; (iii) your substantial and continuing neglect of your job responsibilities (including unauthorized excess absenteeism) after having been put on notice of the deficiency(ies) and given a reasonable time to cure; (iv) your failure to comply with, or violation of, CIT’s Code of Business Conduct; (v) your acts or omissions, whether or not performed in the workplace, which preclude your employment by CIT or CIT Bank by virtue of Section 19 of the Federal Deposit Insurance Act; or (vi) your violation of any federal or state securities or banking laws or regulations or the rules and regulations of any securities exchange or association of which you or CIT is a member.
EXHIBIT A
CIT Group Inc.
Long-Term Incentive Plan
Restricted Stock Unit Award Agreement
“ Participant ”: | <<Participant Name>> |
“ Date of Award ”: | <<Grant Date>> |
“ Number of RSUs Granted ”: | <<Shares Granted>> |
Effective as of the Date of Award, this Award Agreement sets forth the grant of Restricted Stock Units (“ RSUs ”) by CIT Group Inc., a Delaware corporation (the “ Company ”), to the Participant, pursuant to the provisions of the Amended and Restated CIT Group Inc. Long-Term Incentive Plan (the “ Plan ”). This Award Agreement memorializes the terms and conditions as approved by the Compensation Committee of the Board (the “ Committee ”). All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein.
The parties hereto agree as follows:
(A) | Grant of RSUs . The Company hereby grants to the Participant the Number of RSUs Granted, effective as of the Date of Award and subject to the terms and conditions of the Plan and this Award Agreement. Each RSU represents the unsecured right to receive one Share in the future following the vesting of the RSU in accordance with this Award Agreement. The Participant shall not be required to pay any additional consideration for the issuance of the Shares upon settlement of the RSUs. |
(B) | Vesting and Settlement of RSUs . |
(1) | Subject to (A) the Participant’s continued employment with the Company and/or its Affiliates (the “Company Group”) from the Date of Award until the applicable Vesting Date (as defined below), (B) Section (B)(2) and (C) compliance with, and subject to, the terms and conditions of this Award Agreement, one-third (33 1/3%) of the RSUs shall vest on March 8, 2016, March 8, 2017, and March 8, 2018 (each a “Vesting Date”). |
(2) | Each vested RSU shall be settled through the delivery of one Share within thirty (30) days following the applicable Vesting Date (a “Settlement Date”), provided that any fractional Share shall vest and be settled on the last Vesting Date and Settlement Date, respectively, and provided further than the Settlement Date may be delayed, in the sole discretion of the Committee and in accordance with applicable law (including Section 409A (as defined below)), if the Committee is considering whether Sections (B)(2) and/or (L) apply to the Participant. |
(3) | The Shares delivered to the Participant on the applicable Settlement Date (or such date determined in accordance with Section (C) or (D)) shall not be subject to transfer restrictions and shall be fully paid, non-assessable and registered in the Participant’s name. |
(4) | If, after the Date of Award and prior to the applicable Vesting Date, dividends with respect to Shares are declared or paid by the Company, the Participant shall be credited with, and entitled to receive, dividend equivalents in an amount, without interest, equal to the cumulative dividends declared or paid on a Share, if any, during such period multiplied by the number of unvested RSUs. Unless otherwise determined by the Committee, dividend equivalents paid in cash shall not be reinvested in Shares and shall remain uninvested. The dividend equivalents credited in respect of vested RSUs shall be paid in cash or Shares, as applicable, on the Settlement Date. |
(5) | Except for Participants who are tax residents of Canada, in the sole discretion of the Committee and notwithstanding any other provision of this Award Agreement to the contrary, in lieu of the delivery of Shares, the RSUs and any dividend equivalents payable in Shares may be settled through a payment in cash equal to the Fair Market Value of the applicable number of Shares, determined on the applicable Vesting Date or, in the case of settlement in accordance with Section (C)(1) or (D), the date of the Participant’s “Separation from Service” (within the meaning of the Committee’s established methodology for determining “Separation from Service” for purposes of Section 409A) or the date of Disability, as applicable. Settlement under this Section (B)(6) shall be made at the time specified under Sections (B)(3), (B)(5), (C)(1), (C)(2), (C)(3) or (D), as applicable. |
(C) | Separation from Service . |
(1) | If, after the Date of Award and prior to an applicable Settlement Date, the Participant incurs a Disability (as defined below) or a Separation from Service from the Company Group due to death, each RSU, to the extent unvested, shall vest immediately and shall settle through the delivery of one Share within thirty (30) days following the Participant’s Disability or Separation from Service due to death. The Participant (or the Participant’s beneficiary or legal representative, if applicable) shall also be entitled to receive all credited and unpaid dividend equivalents at the time the RSUs are settled in accordance with this Section (C)(1). “Disability” shall have the same meaning as defined in the Company’s applicable long-term disability plan or policy last in effect prior to the first date the Participant suffers from such Disability; provided , however , for a Participant that is a US taxpayer at any time during the period the |
RSUs vest and become settled hereunder and to the extent a “Disability” event does not also constitute a “Disability” as defined in Section 409A, such Disability event shall not constitute a Disability for purposes of this Section (C)(1).
(2) | If, after the Date of Award and prior to an applicable Settlement Date, the Participant incurs a Separation from Service due to the Participant’s Retirement (as defined below) or initiated by the Company without Cause (as defined below and including, for the avoidance of doubt, in connection with a sale of a business unit), and, subject to the terms and conditions of the Plan and this Award Agreement, including Section (L) below, the RSUs (and any credited and unpaid dividend equivalents), to the extent unvested as of such Separation from Service, shall continue to vest and be settled on the applicable Vesting Date and Settlement Date in accordance with Sections (B)(1), (B)(2) and (B)(3) above, unless such continued vesting and settlement of RSUs (and dividend equivalents) following the Participant’s Separation from Service is prohibited or limited by applicable law and/or regulation. “Retirement” is defined as the Participant’s election to retire upon or after (A) attaining age 55 with at least 11 years of service with the Company Group, or (B) attaining age 65 with at least 5 years of service with the Company Group, in each case as determined in accordance with the Company Group’s policies and procedures. “Cause” means any of the following: (i) the commission of a misdemeanor involving moral turpitude or a felony; (ii) the Participant’s act or omission that causes or may reasonably be expected to cause material injury to the Company Group, its vendors, customers, business partners or affiliates or that results or is intended to result in personal gain at the expense of the Company Group, its vendors, customers, business partners or affiliates; (iii) the Participant’s substantial and continuing neglect of his or her job responsibilities for the Company Group (including excessive unauthorized absenteeism); (iv) the Participant’s failure to comply with, or violation of, the Company Group’s Code of Business Conduct; (v) the Participant’s act or omission, whether or not performed in the workplace, that precludes the Participant’s employment with any member of the Company Group by virtue of Section 19 of the Federal Deposit Insurance Act; and (vi) the Participant’s violation of any federal or state securities or banking laws, any rules or regulations issued pursuant to such laws, or the rules and regulations of any securities or exchange or association of which the Participant or member of the Company Group is a member. |
(3) | If, after April 1, 2016 and prior to an applicable Settlement Date, the Participant incurs a Separation from Service due to the Participant’s Good Reason Termination (as defined below), and, subject to the terms and conditions of the Plan and this Award Agreement, including Section (L) below, the RSUs (and any credited and unpaid dividend equivalents), to the extent unvested as of such Separation from Service, shall continue to vest and be settled on the applicable Vesting Date and Settlement Date in accordance with Sections (B)(1), (B)(2) and (B)(3) above, unless such continued vesting and settlement of RSUs (and dividend equivalents) following the Participant’s Separation from Service is prohibited or limited by applicable law and/or regulation. “Good Reason Termination” is defined as the Participant’s voluntary termination of his or her employment with the Company for Good Reason; provided, however, that a Good Reason Termination shall not occur unless (a) the Participant has provided the Company with written notice specifying in detail the alleged condition of Good Reason within thirty days of the existence of such condition; (b) the Company has failed to cure such alleged condition within ninety days following the Company’s receipt of such written notice; and (c) if the Committee has determined that the Company has failed to cure such alleged condition, the Participant initiates a separation from service within five days following the end of such ninety-day cure period. “Good Reason” is defined as, without the Participant’s consent, (i) a material reduction in the Participant’s job duties, responsibilities, title or position (except a temporary reduction while the Participant is physically or mentally incapacitated); or (ii) a ten percent (10%) or greater reduction in the Participant’s 2016 Total Target Compensation or Total Target Compensation (as such terms are defined in the Participant’s executed offer letter with the Company); or (iii) the Participant’s reassignment to a work location that is more than fifty miles from the Participant’s immediately preceding work location and which increases the distance the Participant has to commute to work by more than fifty miles. |
(4) | If, prior to an applicable Vesting Date, the Participant’s employment with the Company Group terminates for any reason other than as set forth in Section (C)(1), (C)(2), (C)(3) or (D), the unvested RSUs shall be cancelled immediately and the Participant shall immediately forfeit any rights to, and shall not be entitled to receive any payments with respect to, the RSUs including, without limitation, dividend equivalents pursuant to Section (B)(5). |
(D) | Change of Control . |
(1) | Notwithstanding any provision contained in the Plan or this Award Agreement to the contrary, if, prior to an applicable Settlement Date, a Change of Control occurs and within two years of such Change of Control the Participant incurs a Separation from Service (i) due to the Participant’s Retirement, (ii) initiated by the Company without Cause or (iii) due to the Participant’s “Good Reason Termination” (as defined above), the RSUs (and any credited and unpaid dividend equivalents), to the extent unvested, shall vest upon such Separation from Service and be settled within thirty (30) days following such Separation from Service, unless such accelerated vesting and settlement of RSUs (and dividend equivalents) following the Participant’s Separation from Service is prohibited or limited by applicable law and/or regulation. |
(E) | Transferability . The RSUs are not transferable other than by last will and testament, by the laws of descent and distribution pursuant to a domestic relations order, or as otherwise permitted under Section 12 of the Plan. |
(F) | Incorporation of Plan . The Plan includes terms and conditions governing all Awards granted thereunder and is incorporated into this Award Agreement by reference unless specifically stated herein. This Award Agreement and the rights of the Participant hereunder are subject to the terms and conditions of the Plan, as amended from time to time and as supplemented by this Award Agreement, and to such rules and regulations as the Committee may adopt under the Plan. If there is any inconsistency between the terms of this Award Agreement and the terms of the Plan, the Plan’s terms shall supersede and replace the conflicting terms of this Award Agreement. |
(G) | No Entitlements . |
(1) | Neither the Plan nor the Award Agreement confer on the Participant any right or entitlement to receive compensation, including, without limitation, any base salary or incentive compensation, in any specific amount for any future fiscal year (including, without limitation, any grants of future Awards under the Plan), nor impact in any way the Company Group’s determination of the amount, if any, of the Participant’s base salary or incentive compensation. This Award of RSUs made under this Award Agreement is completely independent of any other Awards or grants and is made at the sole discretion of the Company. The RSUs do not constitute salary, wages, regular compensation, recurrent compensation, pensionable compensation or contractual compensation for the year of grant or any prior or later years and shall not be included in, nor have any effect on or be deemed earned in any respect, in connection with the determination of employment-related rights or benefits under law or any employee benefit plan or similar arrangement provided by the Company Group (including, without limitation, severance, termination of employment and pension benefits), unless otherwise specifically provided for under the terms of such plan or arrangement or by the Company Group. The benefits provided pursuant to the RSUs are in no way secured, guaranteed or warranted by the Company Group. |
(2) | The RSUs are awarded to the Participant by virtue of the Participant’s employment with, and services performed for, the Company Group. The Plan or the Award Agreement does not constitute an employment agreement. Nothing in the Plan or the Award Agreement shall modify the terms of the Participant’s employment, including, without limitation, the Participant’s status as an “at will” employee of the Company Group, if applicable. |
(3) | Subject to any applicable employment agreement, the Company reserves the right to change the terms and conditions of the Participant’s employment, including the division, subsidiary or department in which the Participant is employed. None of the Plan or the Award Agreement, the grant of RSUs, nor any action taken or omitted to be taken under the Plan or the Award Agreement shall be deemed to create or confer on the Participant any right to be retained in the employ of the Company Group, or to interfere with or to limit in any way the right of the Company Group to terminate the Participant’s employment at any time. Moreover, the Separation from Service provisions set forth in Section (C) or (D), as applicable, only apply to the treatment of the RSUs in the specified circumstances and shall not otherwise affect the Participant’s employment relationship. By accepting this Award Agreement, the Participant waives any and all rights to compensation or damages in consequence of the termination of the Participant’s office or employment for any reason whatsoever to the extent such rights arise or may arise from the Participant’s ceasing to have rights under, or be entitled to receive payment in respect of, any unvested RSUs that are cancelled or forfeited as a result of such termination, or from the loss or diminution in value of such rights or entitlements, including by reason of the operation of the terms of the Plan, this Award Agreement or the provisions of any statute or law to taxation. This waiver applies whether or not such termination amounts to a wrongful discharge or unfair dismissal. |
(H) | No Rights as a Stockholder . The Participant will have no rights as a stockholder with respect to Shares covered by this Award Agreement (including voting rights) until the date the Participant or his nominee becomes the holder of record of such Shares on an applicable Settlement Date or as provided in Section (C) or (D), if applicable. |
(I) | Securities Representation . The grant of the RSUs and issuance of Shares upon vesting of the RSUs shall be subject to, and in compliance with, all applicable requirements of federal, state or foreign securities law. No Shares may be issued hereunder if the issuance of such Shares would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Shares may then be listed. As a condition to the settlement of the RSUs, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation. |
The Shares are being issued to the Participant and this Award Agreement is being made by the Company in reliance upon the following express representations and warranties of the Participant. The Participant acknowledges, represents and warrants that:
(1) | He or she has been advised that he or she may be an “affiliate” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “ Act ”), and in this connection the Company is relying in part on his or her representations set forth in this section (I)(1); and |
(2) | If he or she is deemed an affiliate within the meaning of Rule 144 of the Act, the Shares must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such Shares and the Company is under no obligation to register the Shares (or to file a “re-offer prospectus”). |
(3) | If he or she is deemed an affiliate within the meaning of Rule 144 of the Act, he or she understands that the exemption from registration under Rule 144 will not be available unless (i) a public trading market then exists for the Shares of the Company, (ii) adequate information concerning the Company is then available to the public, and (iii) other terms and conditions of Rule 144 or any exemption therefrom are complied with; and that any sale of the Shares may be made only in limited amounts in accordance with such terms and conditions. |
(J) | Notices . Any notice or communication given hereunder shall be in writing and shall be deemed to have been duly given when delivered in person or mailed by certified mail, postage and fees prepaid, or internationally recognized express mail service, as follows: |
If to the Company, to:
CIT Group Inc.
1 CIT Drive
Livingston, New Jersey 07039
Attention: Senior Vice President, Compensation and Benefits
If to the Participant, to the address on file with the Company Group.
(K) | Transfer of Personal Data . In order to facilitate the administration of this Award, it will be necessary for the Company Group to collect, hold, and process certain personal information about the Participant. As a condition of accepting this Award, the Participant authorizes, agrees and unambiguously consents to the Company Group collecting, using, disclosing, holding and processing personal data and transferring such data to third parties (collectively, the “ Data Recipients ”) for the primary purpose of the Participant’s participation in, and the general administration of, the Plan and to the transmission by the Company Group of any personal data information related to the RSUs awarded under this Award Agreement, as required in connection with the Participant’s participation in the Plan (including, without limitation, the administration of the Plan) out of the Participant’s home country and including to countries with less data protection than the data protection provided by the Participant’s home country. This authorization and consent is freely given by the Participant. The Participant acknowledges that he/she has been informed that upon request, the Company will provide the name or title and contact information for an officer or employee of the Company Group who is able to answer questions about the collection, use and disclosure of personal data information. |
(1) | The Data Recipients will treat the Participant’s personal data as private and confidential and will not disclose such data for purposes other than the management and administration of this Award and will take reasonable measures to keep the Participant’s personal data private, confidential, accurate and current. |
(2) | Where the transfer is to a destination outside the country to which the Participant is employed, or outside the European Economic Area for Participants employed by the Company Group in the United Kingdom or Ireland, the Company shall take reasonable steps to ensure that the Participant’s personal data continues to be adequately protected and securely held. By accepting this Award, the Participant acknowledges that personal information about the Participant may be transferred to a country that does not offer the same level of data protection as the country in which the Participant is employed. |
(L) | Cancellation; Recoupment; Related Matters . |
(1) | In the event of a material restatement of the Company’s financial statements, the Committee (or its designee) shall review those facts and circumstances underlying the restatement that the Committee (or its designee) determines in its sole discretion as relevant (which may include, without limitation, the Participant’s status and responsibility within the organization, any potential wrongdoing by the Participant and whether the restatement was the result of negligence, intentional or gross misconduct or other conduct, including any acts or failures to act, detrimental to the Company insofar as it caused material financial or reputational harm to the Company or its business activities), and the Committee (or its designee), in its sole discretion, may direct the Company (i) to cancel any outstanding RSUs (whether or not vested), and the Participant shall forfeit any rights to such cancelled RSUs and / or (ii) to recover from the Participant an amount equal to the Fair Market Value (determined as of the Settlement Date) of the net number of Shares distributed to the Participant pursuant to this Award Agreement within the 12 months immediately preceding the Committee’s determination. |
(2) | In the event that the Committee (or its designee), in its sole discretion, determines that this grant of RSUs was based, in whole or in part, on materially inaccurate financial or performance metrics for any period preceding the granting of this Award, whether or not a financial restatement is required and whether or not the Participant was responsible for the inaccuracy, then the Committee (or its designee), in its sole discretion, may direct the Company (i) to cancel any outstanding RSUs (whether or not vested), and the Participant shall forfeit any rights to such cancelled RSUs, and / or (ii) to recover from the Participant an amount equal to the Fair Market Value (determined as of the Settlement Date) of the net number of Shares distributed to the Participant pursuant to this Award Agreement within the 12 months immediately preceding the Committee’s determination. |
(3) | In the event the Committee (or its designee), in its sole discretion, determines at any time that the Participant has engaged in “Detrimental Conduct” (as defined below), or violated any of the Company Policies (as defined below), during the Participant’s employment, including if such determination is made following the Participant’s termination of |
employment, then the Committee (or its designee), in its sole discretion, may direct the Company (i) to cancel any outstanding RSUs (whether or not vested), and the Participant shall forfeit any rights to such cancelled RSUs and / or (ii) to recover from the Participant an amount equal to the Fair Market Value (determined as of the Settlement Date) of the net number of Shares distributed to the Participant pursuant to this Award Agreement within the 12 months immediately preceding the Committee’s determination. “Detrimental Conduct” shall mean: (i) any conduct that would constitute “cause” under the Participant’s employment agreement or similar agreement with the Company or its Affiliates, if any, or if the Participant’s employment has terminated and the Committee discovers thereafter that the Participant’s employment could have or should have been terminated for Cause; or (ii) fraud, gross negligence, or other wrongdoing or malfeasance. “Company Policies” shall mean the Company policies and procedures in effect from time to time, including, without limitation, policies and procedures with respect to the Company’s “Regulatory Credit Classifications” (as defined in the Company’s Annual Report on Form 10-K filed with the Securities Exchange Commission on March 1, 2013 (the “Form 10-K”)), and as amended from time to time, and any credit risk policies and procedures in effect from time to time.
(4) | Notwithstanding anything contained in the Plan or this Award Agreement to the contrary, to the extent that the Company is required by law to include any additional recoupment, recovery or forfeiture provisions to outstanding Awards, then such additional provisions shall also apply to this Award Agreement as if they had been included as of the Date of Award and in the manner determined by the Committee in its sole discretion. |
(5) | The remedies provided for in this Award Agreement shall be cumulative and not exclusive, and the Participant agrees and acknowledges that the enforcement by the Company of its rights hereunder shall not in any manner impair, restrict or limit the right of the Company to seek injunctive and other equitable or legal relief under applicable law or the terms of any other agreement between the Company and the Participant. |
(M) | Miscellaneous . |
(1) | It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which shall be binding upon the Participant. |
(2) | The Board may at any time, or from time to time, terminate, amend, modify or suspend the Plan, and the Board or the Committee may amend or modify this Award Agreement at any time; provided , however , that, except as provided herein, no termination, amendment, modification or suspension shall materially and adversely alter or impair the rights of the Participant under this Award Agreement, without the Participant’s written consent. |
(3) | This Award Agreement is intended to comply with, or be exempt from, Section 409A of the Code and the regulations and guidance promulgated thereunder (“Section 409A”), and accordingly, to the maximum extent permitted, this Award Agreement shall be interpreted in a manner intended to be in compliance therewith. In no event whatsoever shall the Company Group be liable for any additional tax, interest or penalty that may be imposed on the Participant by Section 409A or any damages for failing to comply with Section 409A. If any provision of the Plan or the Award Agreement would, in the sole discretion of the Committee, result or likely result in the imposition on the Participant, a beneficiary or any other person of additional taxes or a penalty tax under Section 409A, the Committee may modify the terms of the Plan or the Award Agreement, without the consent of the Participant, beneficiary or such other person, in the manner that the Committee, in its sole discretion, may determine to be necessary or advisable to avoid the imposition of such penalty tax. Notwithstanding anything to the contrary in the Plan or the Award Agreement, to the extent that the Participant is a “Specified Employee” (within the meaning of the Committee’s established methodology for determining “Specified Employees” for purposes of Section 409A), payment or distribution of any amounts with respect to the RSUs that are subject to Section 409A will be made as soon as practicable following the first business day of the seventh month following the Participant’s Separation from Service from the Company Group or, if earlier, the date of the Participant’s death. |
(4) | Delivery of the Shares underlying the RSUs or payment in cash (if permitted pursuant to Section (B)(6)) upon settlement is subject to the Participant satisfying all applicable federal, state, provincial, local, domestic and foreign taxes and other statutory obligations (including, without limitation, the Participant’s FICA obligation, National Insurance Contributions or Canada Pension Plan contributions, as applicable), provided, that any Participant that is subject to tax regulation in the United Kingdom or Ireland shall also be subject to the provisions of Exhibit B attached hereto, if applicable. The Company shall have the power and the right to (i) deduct or withhold from all amounts payable to the Participant pursuant to the RSUs or otherwise, or (ii) require the Participant to remit to the Company, an amount sufficient to satisfy any applicable taxes required by law. The Company may permit or require the Participant to satisfy, in whole or in part, the tax obligations by withholding Shares that would otherwise be received upon settlement of the RSUs. |
(5) | The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing Shares issued pursuant to this Award Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing Shares acquired pursuant to this Award Agreement in the possession of the Participant. |
(6) | This Award Agreement shall be subject to all applicable laws, rules, guidelines and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required, or the Committee determines are advisable, including but not limited to any applicable laws or the rules, codes or guidelines of any statutory or regulatory body in any jurisdiction relating to the remuneration of any Participant (in each case as may be in force from time to time). The Participant agrees to take all steps the Company determines are necessary to comply with all applicable provisions of federal, state and foreign securities law in exercising his or her rights under this Award Agreement. |
(7) | Nothing in the Plan or this Agreement should be construed as providing the Participant with financial, tax, legal or other advice with respect to the RSUs. The Company recommends that the Participant consult with his or her financial, tax, legal and other advisors to provide advice in connection with the RSUs. |
(8) | All obligations of the Company under the Plan and this Award Agreement, with respect to the Awards, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. |
(9) | To the extent not preempted by federal law, this Award Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware. |
(10) | This Award Agreement may be executed in one or more counterparts, all of which taken together shall constitute one contract. |
(11) | The Participant agrees that the Company may, to the extent permitted by applicable law and as provided for in Section 17(g) of the Plan, retain for itself securities or funds otherwise payable to the Participant pursuant to this Award Agreement, or any other Award Agreement under the Plan, to satisfy any obligation or debt that the Participant owes the Company or its affiliates under any Award Agreement, the Plan or otherwise; provided that the Company may not retain such funds or securities and set off such obligations or liabilities until such time as they would otherwise be distributable to the Participant, and to the extent that Section 409A is applicable, such offset shall not exceed the maximum offset then permitted under Section 409A. |
(12) | The Participant acknowledges that if he or she moves to another country during the term of this Award Agreement, additional terms and conditions may apply and as provided for in Section 17(f) of the Plan and the Company reserves the right to impose other requirements to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Award Agreement. The Participant agrees to sign any additional agreements or undertaking that may be necessary to accomplish the foregoing. |
(13) | The Participant acknowledges that he or she has reviewed the Company Policies, understands the Company Policies and agrees to be subject to the Company Policies that are applicable to the Participant, including, without limitation, the Regulatory Credit Classifications and any credit risk policies in effect from time to time. |
(14) | The Participant acknowledges that the Company is subject to certain regulatory restrictions that may, under certain circumstances, prohibit the accelerated vesting and distribution of any unvested RSUs as a result of, or following, a Participant’s Separation from Service. |
(15) | The Participant acknowledges that his or her participation in the Plan as a result of this Award Agreement is further good and valuable consideration for the Participant’s obligations under any non-competition, non-solicitation, confidentiality or similar agreement between the Participant and the Company. |
(16) | Neither this Award Agreement or the Shares that may be awarded hereunder represent any right to the payment of earned wages, and the rights of the Participant with respect to any Shares remains fully contingent and subject to the vesting and other terms and conditions of this Award Agreement. |
(17) | Any cash payment made pursuant to Section (B)(5) or (B)(6) of this Award Agreement shall be calculated, where necessary, by reference to the prevailing U.S. dollar exchange rate on the proposed payment date (as determined by the Committee in its sole discretion). |
(N) | Acceptance of Award . By accepting this Award of RSUs, the Participant is agreeing to all of the terms contained in this Award Agreement, including the non-competition and non-solicitation provision attached hereto as Exhibit A and tax provisions attached hereto as Exhibit B (if applicable). The Participant may accept this Award by indicating acceptance by e-mail or such other electronic means as the Company may designate in writing or by signing this Award Agreement if the Company does not require acceptance by email or such other electronic means. If the Participant desires to refuse the Award, the Participant must notify the Company in writing. Such notification should be sent to CIT Group Inc., Attention: Senior Vice President, Compensation and Benefits, 1 CIT Drive, Livingston, New Jersey 07039, no later than thirty (30) days after the Date of Award. If the Participant declines the Award, it will be cancelled as of the Date of Award. |
IN WITNESS WHEREOF , this Award Agreement (including any exhibits attached hereto) has been executed by the Company by one of its duly authorized officers as of the Date of Award.
CIT Group Inc. | |
Accepted and Agreed : | |
<<Electronic Signature>> | |
<<Acceptance Date>> | |
EXHIBIT A
Non-Competition and Non-Solicitation Provisions
All capitalized terms shall have the meanings ascribed to them in the Award Agreement, unless specifically set forth otherwise herein.
1. Non-Competition following Retirement . Following Participant’s Retirement through each Settlement Date, Participant shall not , without the Company Group’s prior written consent, engage directly or indirectly in any Competing Business whether as an employer, officer, director, owner, stockholder, employee, partner, member, joint venturer or consultant. The Committee (or its designee) may, in its sole discretion, require Participant to submit on or prior to each Vesting Date an affidavit certifying that Participant has not breached this non-competition restriction, and may condition vesting and settlement of all unvested RSUs on the timely receipt of such affidavit. The geographic reach of this non-competition restriction shall be the territory which is co-extensive with the Company Group’s business and the Participant’s responsibilities in the last twenty-four (24) months of employment. Nothing in this non-competition restriction prevents Participant from owning not more than 2% of the equity of a publicly traded entity. For the avoidance of doubt, this non-competition restriction shall not apply to a termination of employment for any reason other than Participant’s Retirement.
2. Non-Solicitation of Customers and Clients . During employment with the Company Group and for one year thereafter, the Participant shall not , directly or indirectly, (i) solicit for any Competing Business any client of the Company Group or any specifically identified prospective client of the Company Group, or (ii) cause a client or any specifically identified prospective client of the Company Group to terminate or diminish its business with the Company Group. These restrictions shall apply only to clients of the Company Group or specifically identified prospective clients of the Company Group which the Participant solicited, with which the Participant maintained a business relationship for the Company Group, or about which the Participant obtained Confidential Information on behalf of the Company Group, in the last twenty-four (24) months of employment with the Company Group.
3. Non-Solicitation of Employees. During employment with the Company Group and for one year thereafter, the Participant shall not , directly or indirectly, (i) solicit, recruit, induce or otherwise encourage any Company Group employees to end their employment with the Company Group or to engage in any Competing Business; or (ii) hire or retain as an independent consultant/contractor, on behalf of any Competing Business, any person who was employed with the Company Group within the preceding six months.
4. Definitions.
(a) “ Competing Business ” means any person or entity that competes with the Company Group in the sale, marketing, production, distribution, research or development of Competing Products in the same markets.
(b) “ Competing Products ” means any product or service in existence or under development that competes with any product or service of the Company Group about which the Participant obtained Confidential Information or for which the Participant provided advisory services or had sales, origination, marketing, production, distribution, research or development responsibilities in the last twenty-four (24) months of employment with the Company Group.
(c) " Confidential Information " means information in print, audio, visual, digital, electronically-stored or any other form, which the Company Group has acquired and keeps confidential or that is not otherwise known publicly or to the Company Group’s competitors, which includes but is not limited to the Company Group’s trade secrets, business or marketing plans and strategies, prices and rates, financial data, personnel records, client lists and contact information, client accounts, profit margins, analyses, research and developments, know how, methodologies, designs, inventions, innovations, processes, security and proprietary technology.
EXHIBIT B
Applicable Foreign Tax Provisions
All capitalized terms shall have the meanings ascribed to them in the Award Agreement, unless specifically set forth otherwise herein.
United Kingdom:
The Participant shall also, if requested by the Company, enter into any tax or National Insurance Contributions agreement or election the Company deems necessary, including, without limitation, any election under Section 431 of the Income Tax (Earnings and Pensions) Act 2003 in respect of the acquisition of the RSUs or the Shares issued thereunder.
Ireland:
In a case where the Company or an Affiliate or any other person (the “ Relevant Person ”) is obliged to (or would suffer a disadvantage if they were not to) account for any tax (in any jurisdiction) by virtue of the receipt of any benefit under this Award Agreement or the Plan (whether in cash or Shares) or for any pay related social insurance contributions that are payable or assessable (which, unless the Committee determines otherwise when this Award was made, shall not include employer’s pay related social insurance contributions in Ireland) (together, the “ Tax Liability ”), the Participant (or his personal representatives) must either:
(1) | make a payment to the Relevant Person of an amount equal to the Tax Liability; or |
(2) | enter into arrangements acceptable to the Relevant Person to secure that such a payment is made (whether by authorizing the sale of some or all of the Shares on his or her behalf and the payment to the Relevant Person of the relevant amount out of the proceeds of sale or otherwise); |
and in this regard the Participant (or his or her personal representatives) shall do all such things and execute such documents as the Relevant Person may reasonably require in connection with the satisfaction of the Tax Liability.
Exhibit B
CIT NON-COMPETITION, NON-SOLICITATION, CONFIDENTIALITY AND NON-DISPARAGEMENT AGREEMENT
This CIT Non-Competition, Non-Solicitation, Confidentiality and Non-Disparagement Agreement (“Agreement”) is entered into between ELLEN R. ALEMANY (“Employee”) and CIT GROUP INC. (“CIT Group”), including its parent entities, subsidiaries and affiliates within the CIT Group family of companies (and its or their successors and assigns) (collectively, “CIT” or the "Company”).
1. At-Will Employment. Employment with CIT is at-will which means that either CIT or Employee may terminate the employment relationship at any time, for any or no reason, with or without cause or prior notice. Nothing in this Agreement alters Employee's status as an at-will Employee or creates a contract of employment for any specific period of time or with respect to any other term or condition of employment.
2. Nature of CIT’s Business. CIT provides commercial and consumer financing, lending, leasing, factoring, banking, and advisory services to a wide variety of industries and customers throughout the United States of America and elsewhere around the globe.
3. Access to Confidential Information. Employee understands and agrees that CIT’s business depends on the preservation of its (i) Confidential Information (as defined in Section 5(b) below); (ii) relationships with customers, clients and borrowers (which shall include any individual or entity who obtains or requests a financial product, program or service from CIT) (collectively "Client" or "Clients"); and (iii) personnel. Employee acknowledges that Employee has been or will be employed by the Company as part of its senior executive team and has had or will have access to Confidential Information and a range of existing and prospective Client relationships and opportunities on a both a national and global level and will benefit from compensation and benefit opportunities provided by the Company.
4. Consideration. In consideration of: (i) Employee's employment with CIT on an at-will basis; (ii) a grant of Restricted Stock Units, having an initial grant value of two million seven hundred thousand dollars ($2,700,000); (iii) Employee's access to Confidential Information and existing and prospective Client relationships; (iv) compensation and employment benefits and opportunities offered by CIT; (v) specialized training provided by CIT; (vi) the mutual covenants and agreements contained herein; and/or (vii) other good and valuable consideration. Employee promises to abide by the obligations set forth in this Agreement.
Non-Competition, Non-Solicitation, Confidentiality and Non-Disparagement Agreement
5. Confidential Information.
(a) | Protection of Confidential Information. In the course of employment, Employee will be provided access to and/or develop valuable Confidential Information owned by CIT as well as Confidential Information owned by CIT’s Clients, licensors, vendors, suppliers, franchisors, referral sources, or other business partners or third parties (collectively “Third Party” or “Third Parties”). Employee agrees at all times during the term of employment and thereafter to hold in strict confidence Confidential Information owned by CIT and/or any Third Party. Employee further agrees not to access, copy, disclose, distribute, misappropriate, remove, store, transmit or use, directly or indirectly, in whole or in part, any Confidential Information owned by CIT or any Third Party except as (i) necessary in the ordinary course of the Employee's duties for CIT; (ii) required by applicable law; or (iii) authorized in writing by an employee who is an Executive Vice President or higher level employee of CIT. During and after employment with CIT, Employee will take all reasonable measures to protect Confidential Information owned by CIT or any Third Party from any unauthorized use or disclosure. |
(b) | Definition of Confidential Information. Employee agrees that "Confidential Information" means both tangible and intangible information owned by CIT or a Third Party which is in print, audio, visual, digital, electronically-stored or any other form that (i) has been developed or acquired by CIT; (ii) constitutes a trade secret or is proprietary in nature; (iii) is not otherwise known publicly or to CIT’s competitors; and (iv) is kept confidential by CIT. Confidential Information includes, but is not limited to: |
(i) | Board of Director presentations and materials; business, financial, advertising or marketing opportunities, proposals, presentations, plans, budgets, strategies or methods; financial information including forecasts/projections, budgets, data, financial statements and tax returns; financial management and accounting policies and procedures; risk, credit and pricing policies, procedures and terms; prices and rates; profit margins; secondary marketing and hedging models; loan, lease and other financial program applications and supporting documents and information; operations and procedure manuals, materials, policies and memoranda; software programs; source code; data models; production reports; security and proprietary technology; analyses; research and developments; know how; methodologies; designs; |
Non-Competition, Non-Solicitation, Confidentiality and Non-Disparagement Agreement
inventions; innovations; processes; patents; and other business, financial or technical information, improvements, ideas and concepts, whether or not patentable or whether or not copyrightable;
(ii) | information regarding prospective, existing or former Clients or other Third Parties, including: |
a. | the identities and contact information of the Third Parties and/or their key decision makers; Third Party financial and account information, credit worthiness, business plans, forecasts/projections, financial statements, tax returns, trade secrets/patents and potential transactions; CIT’s analysis of such Third Parties; the particular needs and/or preferences of Third Parties and CIT’s strategies for satisfying those needs and preferences; the existence and terms of any agreements, contracts or programs with Third Parties; |
b. | the name, address, email address, telephone number, Social Security number, driver’s license number, employer, place of employment, mother’s maiden name, wage information, income, account number, loan number, account balance, and payment history, transaction or loss history, overdraft history, credit card numbers, debit or ATM card numbers, personal identification number, password, credit history and credit score, information obtained from a consumer or commercial credit reporting agency, information regarding transactions and experiences and creditworthiness, financial transaction data or other data which can be reasonably linked to such information; and |
c. | any other information relating to Third Parties. |
(iii) | information regarding former, existing or potential loans, leases or other financial products or programs, including revenues, costs and profitability; |
(iv) | information regarding proprietary integrated distribution networks and technology platforms, including any customizations or improvements made to commercially available hardware or software products, and any networks and technology platforms developed for any franchise financing programs or other lending programs or finance and |
Non-Competition, Non-Solicitation, Confidentiality and Non-Disparagement Agreement
lease products, including network architecture and software code;
(v) | information regarding employees, directors, officers, agents, independent contractors, consultants and/or other forms of contingent workers, including their skills and abilities, assignments, and performance (other than information involving wages, benefits, other terms and conditions of employment or protected concerted activity); |
(vi) | information regarding, or used in, employee training; |
(vii) | information regarding past, present or potential mergers, acquisitions, divestitures and other transactions, whether or not the transaction was completed; |
(viii) | information regarding CIT stock or assets; and |
(ix) | information marked “Confidential” or “Restricted.” |
(c) | Questions regarding Confidential Information. The foregoing are only examples of CIT’s Confidential Information. If Employee is uncertain as to whether any particular information or material constitutes Confidential Information, Employee shall ask Employee’s manager or, if Employee is no longer employed by CIT, CIT’s General Counsel, prior to use or disclosure. |
(d) | Continuing Obligations with respect to Confidential Information. Confidential information includes such information disclosed to Employee prior to the execution of this Agreement, and shall continue until a specific item of Confidential Information either becomes public knowledge or independently comes into the possession of Employee in a lawful manner unrelated to Employee’s employment with CIT. Employee agrees that Confidential Information does not cease to be confidential if disclosed to a Third Party or other person or entity through any confidentiality agreement or similar protection, as long as the information is not voluntarily made public by CIT. Further, at all times during employment, Employee shall promptly advise Employee’s Human Resources representative and CIT’s Law Department of any known or suspected unauthorized (intentional or unintentional) use or disclosure of CIT’s Confidential Information. |
(e) | Former Employer Information. Employee agrees that Employee will not, during Employee’s employment with CIT, improperly use or disclose any proprietary information or trade secrets of any former |
Non-Competition, Non-Solicitation, Confidentiality and Non-Disparagement Agreement
employer or other person or entity and that Employee will not bring onto the premises of CIT any unpublished or published documents containing confidential or proprietary info r mation belonging to any such employer, person, or entity unless consented to in writing by such employer, person, or entity.
(f) | National Labor Relations Act Exclusion. Nothing contained in this Agreement is intended to prohibit communications regarding wages, benefits, or other terms and conditions of employment, or that otherwise are legally protected under the National Labor Relations Act (if and only to the extent applicable), or under any applicable state or federal law. |
6. Inventions and Other Developments. With regard to any and all inventions or developments that relate to the Company’s business, involve the use of CIT information or property, or that Employee develops or acquires within the scope of Employee’s employment by the Company (“Developments”):
(a) | All Developments and related records or information in any form shall become and remain the exclusive property of the Company and, to the extent Employee has any rights thereto, Employee hereby assigns all such rights, title, and interest to the Company. All copyrightable Developments shall be deemed "works made for hire" under the U.S. Copyright Act for CIT's benefit. |
(b) | Upon request, Employee, whether during or after Employee’s employment by the Company, shall execute, acknowledge and deliver to the Company all assignments and other documents which the Company deems necessary to: (a) vest the Company with full and exclusive right, title, and interest to the Developments, and (b) enable the Company to file and prosecute an application for, or acquire, maintain or enforce, all letters of patent, mask work, trademark registrations (including domain names), and copyrights covering the Developments. |
(c) | If CIT is unable for any reason to secure Employee’s signature to apply for or to pursue an application for registration or other protection of any Developments and intellectual property rights assigned to CIT, then Employee hereby irrevocably designates and appoints CIT and its duly authorized officers and agents as Employee’s agent and attorney in fact, to act for and on Employee’s behalf to execute and file any such applications, to do all other lawfully permitted acts to further the prosecution and issuance of letters of patent, mask work, trademark registrations (including domain names) and copyrights and any acts necessary to obtain and enforce the full benefits, enjoyment, rights and title, with the same |
Non-Competition, Non-Solicitation, Confidentiality and Non-Disparagement Agreement
legal force and effect as if executed by Employee. Employee hereby waives and quitclaims to CIT any and all claims, of any nature whatsoever, which Employee now has or may hereafter have for infringement of any patents, mask works, trademark registrations (including domain names) and copyrights resulting from any such application for letters of patent, mask work, trademark registrations (including domain names) and copyright registrations assigned hereunder to CIT.
7. Prior Inventions and Other Developments. Employee represents that there are no inventions or developments, whether or not patented, copyrighted or trademarked, which Employee conceived or created solely or jointly prior to employment with CIT and which Employee intends to exclude from this Agreement, except as appended hereto.
8. Exit Interview. Employee shall, if requested, participate in an exit interview, identify future business or employment plans, describe the nature of those plans, and reaffirm in writing Employee’s obligations set forth in this Agreement.
9. Notice of New Employment or Business. For one (1) year after employment with CIT, Employee shall (i) promptly notify CIT in writing of any new employment or business engagement, including the name and address of the entity and the nature of Employee’s new duties; (ii) promptly notify all recruiters, employment agencies, employment consultants, prospective employers and/or prospective business partners of Employee’s restrictions under this Agreement; and (iii) permit CIT to notify any person, with whom Employee enters into an employment or other business relationship, of Employee’s obligations under this Agreement.
10. Non-Competition. During employment with CIT and for one (1) year thereafter, Employee shall not , without CIT's prior written consent, compete with CIT by engaging, in a competitive capacity, either directly or indirectly, in any Competing Business whether as an employee, employer, director, officer, owner, stockholder, partner, member, joint venturer, independent contractor, consultant, or other contingent worker. The geographic reach of this non-competition restriction shall be worldwide and Employee acknowledges and agrees that Employee’s work was both national and global in scope. For purposes of this Agreement,
(a) | “Competing Business” is any person or entity that competes with CIT in the sale, marketing, production, distribution, research or development of Competing Products in the same markets; and |
(b) | “Competing Products” are any products or services in existence or under development that compete with any products or services of CIT about which Employee obtained Confidential Information or for which Employee provided advisory services or had sales, origination, marketing, production, distribution, research or development responsibilities in the last twenty-four (24) months of employment with CIT. |
Non-Competition, Non-Solicitation, Confidentiality and Non-Disparagement Agreement
11. Non-Solicitation of Customers and Clients. During employment with CIT and for one (1) year thereafter, Employee shall not , directly or indirectly: (i) solicit for any Competing Business any Client of CIT or any specifically identified prospective Client of CIT; or (ii) cause a Client or any specifically identified prospective Client of CIT to terminate or diminish its business with CIT. These restrictions shall apply only to Clients of CIT or specifically identified prospective Clients of CIT whom Employee solicited, with whom Employee maintained a business relationship for CIT, or about which Employee obtained Confidential Information on behalf of CIT, in Employee’s last twenty-four (24) months of employment with CIT.
12. Non-Inducement of Employees. During employment with CIT and for one (1) year thereafter, Employee shall not , directly or indirectly: (i) solicit, recruit, induce or otherwise encourage CIT employees to end their employment with CIT; or (ii) hire or retain as an employee, independent consultant/contractor or other contingent worker any person who was employed with CIT within the preceding six (6) months.
13. Minimum Restriction Necessary; Severability. The parties hereto intend to restrict the activities of Employee only to the extent necessary for the protection of the Company’s legitimate business interests. If a court of competent jurisdiction should determine that any of the geographic, durational or other provisions of this Agreement are unenforceable because of the scope of such provision, such court may, in its discretion, modify such provisions in a manner to render them enforceable to the fullest extent provided under applicable law, and such provisions, as modified, shall be fully enforceable as though set forth herein. Any such modification shall not affect the other provisions or clauses of this Agreement in any respect. The invalidity or unenforceability of any provision or clause of this Agreement shall not affect the continued validity or enforceability of any other provisions or clauses hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision or clause were omitted.
14. Extended Duration for Violations and During Lawsuit. Employee agrees that the duration of the non-competition, non-solicitation and non-inducement obligations set forth in Sections 10-12 of this Agreement (the "Restrictions") shall be extended by, and their expirations tolled during, the period of time in which Employee is in breach of those Restrictions. Employee further agrees that the duration of the Restrictions in this Agreement shall be extended and their expirations tolled upon the filing of any lawsuit challenging the validity or enforceability of the Agreement until the lawsuit is finally resolved and all rights of appeal have expired. Asserting any claims against CIT will not relieve Employee of the Restrictions or constitute a defense to enforcement of this Agreement, unless otherwise provided by law. The purpose of this section is to ensure that CIT receives the full one (1) year of protection from unfair competition upon which CIT has relied in entering into this Agreement and that Employee does not benefit from any breach or challenge.
Non-Competition, Non-Solicitation, Confidentiality and Non-Disparagement Agreement
15. Notification to New Employer. Employee acknowledges and consents that if Employee leaves CIT’s employment and is employed by a new employer, CIT may notify any such new employer of Employee’s obligations under this Agreement, and that such notification will not be deemed a tortious interference with Employee’s new employment.
16. Company’s Remedies. The parties agree that the services to be rendered by Employee are special and unique in nature, as well as national and global in scope and responsibility. Employee hereby acknowledges and agrees that: (i) any breach or violation of this Agreement would result in irreparable injury to the Company; and (ii) the enforcement of a remedy by way of injunction would not prevent Employee from earning a living. Employee further acknowledges and agrees that Employee’s breach of any of the Restrictions will not be adequately compensated by monetary damages alone and that, in the event of a breach, CIT shall be entitled to: (i) preliminary and permanent injunctive relief in addition to any other legal or equitable remedies available to CIT; (ii) an equitable accounting of all profits or benefits arising out of such violation or breach; and (iii) direct, incidental, and consequential damages to CIT arising from the violation or breach. These rights and remedies shall be cumulative and in addition to any and all other rights and remedies to which CIT may be entitled. If Employee is found to have breached this Agreement or CIT is successful in obtaining a court order prohibiting Employee from violating this Agreement, CIT will be entitled to collect from Employee its damages and reasonable attorneys’ fees incurred by CIT in seeking to enforce this Agreement.
17. Non - Disparagement. During employment with CIT and for one (1) year thereafter, Employee shall not , directly or indirectly, disparage, publicly criticize or take any action that would damage the reputation of the Company or any of its officers, directors, employees, agents or representatives.
18. Scope of Restrictions. Employee acknowledges and agrees that the Restrictions and other obligations placed on Employee in this Agreement are reasonable and necessary to protect and preserve CIT's legitimate business interests.
19. Choice of Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws.
20. General Terms. This Agreement shall not supersede, replace or diminish Employee’s common law obligations to CIT as Employee’s current or former employer. Employee's obligations under this Agreement shall survive separation of Employee's employment with CIT for any reason. This Agreement will inure to the benefit of CIT, its successors and assigns without Employee’s further approval or consent. However, Employee may not assign this Agreement or delegate any responsibilities thereunder. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. No waiver of any rights under this Agreement shall be effective unless expressed in writing by the party to be charged. The waiver by CIT of a breach of any provision of this Agreement shall not
Non-Competition, Non-Solicitation, Confidentiality and Non-Disparagement Agreement
operate or be construed as a waiver of any subsequent breach. Except as expressly permitted herein, this Agreement may be amended or modified only by a written agreement executed by the Employee and a duly authorized representative of CIT or CIT’s successor. This Agreement supersedes all prior agreements, promises, and representations, whether oral or written, express or implied, to the extent they contradict or conflict with the provisions hereof. This Agreement shall be construed in accordance with the intent of the parties, as expressed herein, and not strictly for or against either party.
Non-Competition, Non-Solicitation, Confidentiality and Non-Disparagement Agreement
EMPLOYEE UNDERSTANDS THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. EMPLOYEE HAS READ THIS AGREEMENT CAREFULLY, HAS BEEN GIVEN A REASONABLE PERIOD OF TIME TO CONSIDER IT, HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL TO THE EXTENT EMPLOYEE WISHES TO DO SO, AND IS SATISFIED THAT EMPLOYEE UNDERSTANDS IT COMPLETELY.
CIT GROUP INC.
By: | ||
Name: | ||
Title: | ||
Dated: | ||
ELLEN R. ALEMANY:
Print Name: | ||
Dated: |
Exhibit C
MUTUAL AGREEMENT TO ARBITRATE CLAIMS
This Mutual Agreement to Arbitrate Claims (“Agreement”) is entered into between ELLEN R. ALEMANY (“Employee”) and CIT GROUP INC. (“CIT”) (“Employer”), including its parent entities, subsidiaries and affiliates within the CIT family of companies (and its or their successors and assigns) and its or their current or former officers, directors, employees, agents and representatives (collectively, the “Company”).
1. Agreement to Arbitrate. Employee is encouraged to raise any questions and concerns Employee may have with respect to the Company with Employee’s manager or Human Resources representative, senior management of Employee’s Business or Functional Unit, Employment Practices by calling (973) 740-5160, or the Law Department so that the Company has an opportunity to address Employee’s questions and concerns. Nevertheless, Employee and the Company recognize that differences may arise between them either during or following Employee’s employment with the Company, and that those differences may or may not be related to employment of Employee. Employee and the Company agree that such differences must be resolved through final and binding arbitration pursuant to this Agreement and that, by entering into this Agreement, they anticipate gaining the benefits of a speedy, impartial and conclusive dispute-resolution procedure. Employee and the Company further agree that the arbitration will be held under the auspices of the sponsoring organization, Judicial Arbitration & Mediation Services (“JAMS”) by one Arbitrator selected in accordance with the procedures set forth in Section 8, subsection (c) below. Any party may be represented by an attorney or other representative selected by the party.
2. Consideration. Employee and the Company agree that the mutual promises by each to arbitrate their respective differences, rather than litigate them before courts or other bodies, as well as Employee’s employment or continued employment by the Company, provide sufficient consideration for this Agreement.
3. Claims Covered by this Agreement.
(a) | Subject to Section 4 below, Employee and the Company mutually consent to the resolution by final and binding arbitration of all demands, controversies, complaints, causes of action, claims or liabilities of any kind (“Claims”), whether past, present or future, and whether or not arising out of Employee’s employment (or termination thereof), that the Company may have against Employee or Employee may have against any of the following: (i) the Employer; (ii) the Employer’s current or former parent entities, subsidiaries or affiliates within the CIT family of companies; (iii) the Employer’s current or former officers, directors, employees, agents or representatives in their capacity as such or otherwise; (iv) the Company; (v) the Company’s current or former parent entities, subsidiaries or affiliates within the CIT family of companies; (vi) the Company’s current or former officers, directors, employees, agents or representatives in their capacity as such or otherwise; (vii) the Company’s benefit plans or the plans’ sponsors, fiduciaries, administrators, affiliates or agents, and/or (viii) all successors and assigns of any of them. |
(b) | The Claims covered by this Agreement include, but are not limited to, Claims for: |
Exhibit C
(i) | wages or other compensation due; |
(ii) | breach of any contract or covenant (whether express or implied); |
(iii) | defamation, fraud, tortious interference or any other tort; |
(iv) | wrongful termination; |
(v) | discrimination or harassment (including, but not limited to, those Claims based on color, race, national origin, religion, sex, sexual orientation, age, marital status, physical or mental disability or handicap, or medical condition); |
(vi) | bullying or abusive conduct; |
(vii) | retaliation; |
(viii) | benefits (except Claims under a pension, severance or other employee benefit plan that either (1) specifies that its claims procedure shall culminate in an arbitration procedure different from this one, or (2) is underwritten by a commercial insurer which decides claims); and |
(ix) | violation of any federal, state, or other governmental law, statute, regulation, ordinance, policy or Constitution. |
4. Claims Not Covered by this Agreement.
(a) | Nothing in this Agreement shall be construed as preventing Employee from filing a: |
(i) | Claim for workers’ compensation or unemployment compensation benefits; or |
(ii) | Claim or charge with the Equal Employment Opportunity Commission or similar state fair employment practices agency, or an administrative charge within the jurisdiction of the National Labor Relations Board, except that any such Claim or charge that is not, or cannot be, resolved administratively through such agency shall be subject to this Agreement. |
(b) | This Agreement also does not cover Claims by Employee or the Company for temporary restraining orders or preliminary injunctions (“temporary equitable relief”) in cases in which such temporary equitable relief would be otherwise authorized by law. Such resort to temporary equitable relief shall be pending and in aid of arbitration only and, in such cases, the trial on the merits of the action will occur in front of, and will be decided by, the Arbitrator, who will have the same ability to order legal or equitable remedies as would a court of general jurisdiction. |
Exhibit C
(c) | Further, any Claim that cannot be arbitrated under applicable federal, state or local law cannot be arbitrated under this Agreement. |
5. Individual Action . Neither the Arbitrator, nor a court, may consolidate in arbitration the Claims of any applicant, employee or former employee of the Company with Employee’s Claim(s) or the Claims of any other company with the Company’s Claim(s). In addition, Employee’s Claims against the Company may only be brought in Employee’s individual capacity and may not be brought in any purported class, collective or representative proceeding. Likewise, the Company’s Claims may only be brought against Employee in the capacity of the Company and may not be brought in any purported class, collective or representative proceeding. This means that the Arbitrator may not hear any Claims that Employee may have against the Company as a class action or a collective action. The arbitrated Claims will be comprised solely of Employee’s Claims against the Company and/or any Claims the Company may have against Employee, and will not include the Claims of any other person or company.
6. Notice of Claims and Time Limits for Commencing Arbitration.
(a) | The aggrieved party must give written notice of any Claim to JAMS and to the other party no later than the expiration of the statute of limitations (deadline for filing) that the law prescribes for the Claim. Otherwise, the Claim shall be void and deemed waived. The aggrieved party is encouraged to give written notice of any Claim as soon as possible after the event or events in dispute so that arbitration of any differences may take place promptly. |
(b) | The written notice shall identify and describe the nature of all Claims asserted, the facts upon which such Claims are based and the relief or remedy sought. The notice shall be sent to the other party by certified or registered mail, return receipt requested. |
(c) | Written notice to the Employee will be sent to the last address recorded in Employee’s personnel file. Written notice to the Company, its current or former officers, directors, employees, agents or representatives, shall be sent to the Company’s General Counsel at the Company’s then-current address. |
7. Place of Arbitration. The arbitration shall take place in the state in which Employee was last employed by the Company. Neither Employee, nor the Company, will participate in an arbitration that purports to determine the parties’ respective rights if the arbitration is held outside of that state, absent an express, written agreement signed by both Employee and the General Counsel of the Company (or the General Counsel’s designee).
8. Arbitration Procedure.
(a) | Except as provided in this Agreement, the arbitration shall be conducted in |
Exhibit C
accordance with JAMS’ then-current employment arbitration rules/procedures. The JAMS rules may be found at this web site: http://www.jamsadr.com/rules-employment-arbitration/. Please check this box if Employee wants the Company to provide a copy.
(b) | The Arbitrator shall be an attorney with extensive experience in employment law or such other area(s) of substantive law indicated by the Claims and licensed to practice law in the state in which the arbitration is convened. |
(c) | The Arbitrator shall be selected as follows. JAMS shall give each party a list of eleven (11) arbitrators drawn from its panel of employment dispute arbitrators. Each party shall have ten (10) calendar days from the postmark date on the list to strike all names on the list it deems unacceptable. If only one common name remains on the lists of all parties, that individual shall be designated as the Arbitrator. If more than one common name remains on the lists of all parties, the parties shall strike names alternately from the list of common names until only one remains. The party who did not initiate the Claim shall strike first. If no common name exists on the lists of all parties, JAMS shall furnish an additional list of eleven (11) arbitrators from which the parties shall strike alternately, with the party initiating the Claim striking first, until only one name remains. That person shall be designated as the Arbitrator. If any party declines to participate in the Arbitrator-selection process, that party shall be deemed to have agreed to any of the arbitrators listed. |
(d) | Each party has the right to make requests for production of documents to any party and to subpoena documents relevant to the case from third parties. Each party also has the right to take depositions of one fact witness and any expert witness designated by another party. Requests for additional discovery or depositions may be made to the Arbitrator. The Arbitrator may grant an order for additional discovery and/or depositions if the Arbitrator finds that the party requires it to adequately arbitrate a Claim, taking into account the parties’ mutual desire to have a speedy, cost-effective dispute-resolution mechanism. |
(e) | Each party has the right to subpoena documents and witnesses for the arbitration hearing. |
(f) | At least 30 days before the commencement of the arbitration hearing, the parties must exchange lists of witnesses, including any experts, and copies of all exhibits intended to be used at the arbitration. |
(g) | The Arbitrator shall have jurisdiction to hear and rule on pre-hearing disputes and is authorized to hold pre-hearing conferences by telephone or in person, as the Arbitrator deems advisable. The Arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. |
Exhibit C
(h) | Either party, at its expense, may arrange and pay for the cost of a court reporter or videographer to provide a stenographic or video record of proceedings. |
(i) | Should any party refuse or neglect to appear for, or participate in, the arbitration hearing, the Arbitrator has the authority to decide the dispute based upon whatever evidence is presented. |
(j) | Either party, upon request at the close of hearing, shall be permitted to file a post-hearing brief. The time for filing such a brief will be set by the Arbitrator. |
(k) | The Arbitrator shall render a written award and opinion in the form typically rendered in employment arbitrations no later than thirty (30) days from the date the arbitration hearing concludes or the post-hearing briefs (if requested) are received, whichever is later. The opinion shall include the factual and legal basis for the award. |
9. Arbitration Fees and Costs. The Company is responsible for paying any filing fee and the fees and costs of the Arbitrator; provided, however, that if Employee is the party initiating the Claim, Employee will contribute an amount equal to the filing fee for initiating a Claim in the court of general jurisdiction in the state in which Employee is (or was last) employed by the Company. Each party shall pay in the first instance its own litigation costs and attorneys’ fees, if any. However, if any party prevails on a statutory Claim which affords the prevailing party attorneys’ fees and litigation costs, or if there is a written agreement providing for attorneys’ fees and/or litigation costs, the Arbitrator may award reasonable attorneys’ fees and/or litigation costs to the prevailing party, applying the same standards a court would apply under the law applicable to the Claim(s).
10. Reconsideration and Review. Either party has the right, within twenty (20) days of issuance of the Arbitrator’s opinion, to file with the Arbitrator (and the Arbitrator shall have jurisdiction to consider and rule upon) a motion to reconsider (accompanied by a supporting brief), and the other party shall have twenty (20) days from the date of the motion to respond. The Arbitrator thereupon shall reconsider the issues raised by the motion and promptly either confirm or change the decision.
11. Appeal. Either party may file an appeal of the arbitration award in accordance with the JAMS Optional Arbitration Appeal Procedure (the “Appeal Procedure”). Any such appeal shall be conducted by a three person appeal panel in accordance with the Appeal Procedure. The appeal panel will apply the same standard of review as the applicable (based on the location in which the Claim arose) Circuit Court of Appeal would on an appeal from a federal district court raising the same legal and/or factual issues. The appeal panel will issue a written explanation of its decision. Unless otherwise agreed by the parties and the appeal panel, the appeal shall be conducted at the place of the original arbitration.
12. Governing Procedure/Law.
(a) | Except as provided in this Agreement, the Federal Arbitration Act shall |
Exhibit C
govern the interpretation, enforcement and all proceedings pursuant to this Agreement. To the extent that the Federal Arbitration Act is inapplicable, or held not to require arbitration of a particular Claim or Claims, state law pertaining to agreements to arbitrate shall apply.
(b) | The Arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state in which the Claim arose, or federal law, or both, as applicable to the Claim(s) asserted. The Arbitrator is without jurisdiction to apply any different substantive law or law of remedies. The Federal Rules of Evidence shall apply. |
13. Enforcement of this Agreement. Either party may bring an action in any court of competent jurisdiction to compel arbitration under this Agreement and to enforce an arbitration award.
14. Small Claims Court. Either Employee or the Company may elect to pursue a Claim in small claims court, rather than arbitration, where the amount in dispute falls within the then-current jurisdictional limit of the small claims court. Such an action shall take place in the state in which Employee is (or was last) employed by the Company. Neither Employee, nor the Company, may participate in a small claims court action that purports to determine their respective rights if the action is held outside of that state, absent an express, written agreement by both Employee and the General Counsel of the Company (or the General Counsel’s designee).
15. Authority to Resolve Disputes Regarding This Agreement. Except as set forth in Section 14 above, the Arbitrator, and not a court, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement, including any contention that all or any part of this Agreement is void or voidable.
16. Interstate Commerce. The Company and Employee understand and agree that the Company is engaged in transactions involving interstate commerce.
17. Requirements for Revocation. This Agreement to arbitrate shall survive the termination of Employee’s employment and the expiration of any benefit plan. It can only be revoked by a writing that specifically states an intent to revoke this Agreement and is signed by Employee as well as the Company’s General Counsel (or the General Counsel’s designee).
18. Sole and Entire Agreement. This is the complete agreement of the parties on the subject of arbitration of disputes (except for any arbitration agreement in connection with any pension, severance or other employee benefit plan, which shall remain in effect). This Agreement supersedes any prior or contemporaneous oral or written understandings on the subject. No party is relying on any representations, oral or written, on the subject of the effect, enforceability or meaning of this Agreement, except as specifically set forth in this Agreement.
19. Construction and Severability. If any provision of this Agreement is adjudged to be void or otherwise unenforceable, in whole or in part, such adjudication shall not affect the
Exhibit C
validity of the remainder of the Agreement. All other provisions shall remain in full force and effect based on the parties’ mutual intent to create a binding agreement to arbitrate their disputes.
20. Voluntary Agreement.
(a) | EMPLOYEE AND THE COMPANY BOTH ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ THIS AGREEMENT, THAT THEY UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN EMPLOYEE AND THE COMPANY RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED IN IT, AND THAT THEY HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OR EMPLOYEE OTHER THAN THOSE CONTAINED IN THIS AGREEMENT ITSELF. |
(b) | EMPLOYEE AND THE COMPANY UNDERSTAND THAT, BY SIGNING THIS AGREEMENT, EACH ARE GIVING UP THEIR RIGHT TO A JURY TRIAL. |
(c) | EMPLOYEE AND THE COMPANY FURTHER ACKNOWLEDGE THAT EACH HAS BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH PRIVATE LEGAL COUNSEL AND HAS AVAILED THEMSELVES OF THAT OPPORTUNITY TO THE EXTENT THAT THEY WISH TO DO SO. |
ELLEN R. ALEMANY: | CIT GROUP INC.: | ||
By: | |||
Print Name of Employee | Title of Representative | ||
Date | Date |
At or For the Quarters Ended
|
Nine Months Ended
September 30, |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
2015
|
2014
|
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Earnings:
|
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Net
income
|
$ | 693.1 | $ | 115.3 | $ | 514.9 | $ | 912.1 | $ | 879.0 | |||||||||||||
(Benefit)
Provision for income taxes continuing operations
|
(560.0 | ) | 37.8 | (401.2 | ) | (478.2 | ) | (369.6 | ) | ||||||||||||||
Loss (income)
from discontinued operation, net of taxes
|
3.7 | | 0.5 | 3.7 | (53.5 | ) | |||||||||||||||||
Income from
continuing operations, before (benefit) provision for income taxes
|
136.8 | 153.1 | 114.2 | 437.6 | 455.9 | ||||||||||||||||||
Fixed
Charges:
|
|||||||||||||||||||||||
Interest and
debt expenses on indebtedness
|
280.3 | 265.2 | 275.2 | 816.8 | 809.3 | ||||||||||||||||||
Interest
factor: one-third of rentals on real and personal properties
|
3.4 | 2.0 | 1.8 | 7.2 | 5.3 | ||||||||||||||||||
Total fixed
charges for computation of ratio
|
283.7 | 267.2 | 277.0 | 824.0 | 814.6 | ||||||||||||||||||
Total earnings
before provision for income taxes and fixed charges and noncontrolling interests
|
$ | 420.5 | $ | 420.3 | $ | 391.2 | $ | 1,261.6 | $ | 1,270.5 | |||||||||||||
Ratios of
earnings to fixed charges
|
1.48 | x | 1.57 | x | 1.41 | x | 1.53 | x | 1.56 | x |
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/s/ John A. Thain
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John A. Thain
Chairman and Chief Executive Officer CIT Group Inc. |
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/s/ E. Carol Hayles
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E.
Carol Hayles
Executive Vice President and Chief Financial Officer CIT Group Inc. |
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/s/ John A. Thain
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John A. Thain
Chairman and Chief Executive Officer CIT Group Inc. |
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/s/ E. Carol Hayles
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E.
Carol Hayles
Executive Vice President and Chief Financial Officer CIT Group Inc. |