CIT Group 4Q interest income fell to $754 million
CIT Group (CIT) said new business volumes, cost cutting and continued stabilization of credit trends helped it turn a profit in the fourth quarter. The small- and mid-size business lender, which went through bankruptcy in late 2009, earned $75 million, or 37 cents a share, for the three months ended Dec. 31. Results for the quarter includes restructuring charges, tax benefits and increased debt prepayment fees. CIT said fourth-quarter earnings also benefited from so-called fresh-start accounting items totaling $289 million. It did not provide results for the comparable fourth quarter of 2009. Fourth-quarter interest income fell some 10% to $754 million from $838.1 million in the third quarter. The provision for credit losses increased to $182.4 million for the fourth quarter from $165.1 million for the previous quarter. CIT also restated results for the first three quarters of 2010 after detecting an accounting error. For the full year, the company earned $517 million, or $2.58 a share. CIT expects 2011 results to reflect significantly reduced benefits from fresh-start accounting, "as expectations for asset repayments slow and voluntary Series A debt redemptions result in both prepayment fees" and fresh-start-related costs because the debt is carried at a discount. Chairman and Chief Executive John Thain said he's pleased with the firm's results for 2010. "We’ve completed the build out of our senior management team, eliminated more than $7 billion of high-cost debt, sold more than $5 billion of assets, and funded more than $4.5 billion in new business," Thain said. "We will continue to serve the small business and middle market sectors, the engines of economic growth in the U.S., as we remain focused on increasing the value of our franchise." Write to Jason Philyaw.