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CIT Group (CIT) Beats on Q2 Earnings as Revenues Improve Y/Y
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CIT Group Inc.’s second-quarter 2021 adjusted earnings per share of $2.09 outpaced the Zacks Consensus Estimate of $1.24 by a considerable margin. In the prior-year quarter, the company had incurred adjusted loss of 62 cents per share.
Results benefited from substantial reserve releases, improvement in revenues and lower expenses. Further, the balance sheet position remained strong.
After considering noteworthy items, net income available to common shareholders (GAAP basis) was $215 million or $2.14 per share against net loss of $98 million or 99 cents per share incurred in the year-ago quarter.
Revenues Rise, Expenses Down
Total net revenues (non-GAAP) were $477.6 million, up 16.3% year over year.
Net interest revenues were $266.3 million, growing 9% year over year.
Total non-interest income was $348.9 million, up 15%. The rise was due to an improvement in other non-interest income.
Net finance margin improved 31 basis points year over year to 2.45%.
Operating expenses (excluding noteworthy items and intangible asset amortization) were $249.1 million, down 15.5%.
Credit Quality Improves
The company recorded net provision benefit of $72.2 million against provision of $223.6 million in the year-earlier quarter. Net charge-offs were $26 million, plunging 84.7%.
Non-accrual loans declined 1.3% year over year to $549 million.
Balance Sheet Strong, Capital Ratios Improve
As of Jun 30, 2021, average interest-bearing cash and investment securities amounted to $10.83 billion, comprising $5.58 billion in interest-bearing cash, and $5.25 billion in investment securities and securities purchased under the agreement to resell.
As of Jun 30, 2021, Common Equity Tier 1 and Total Capital ratios (as calculated under the fully phased-in Regulatory Capital Rules) were 11.6% and 15.0%, respectively, compared with 10.0% and 13.2% at the end of the prior-year quarter.
Our View
CIT Group’s efforts to diversify revenues, strategic expansion initiatives and a strong balance sheet position are expected to support growth. The company has entered an all-stock merger deal with First Citizens BancShares, Inc., which is expected to close in the third quarter.
Hancock Whitney Corporation’s (HWC - Free Report) second-quarter 2021 adjusted earnings per share of $1.37 surpassed the Zacks Consensus Estimate of $1.15. The bottom line improved significantly from the prior-year quarter’s loss of $1.36.
Associated Banc-Corp’s (ASB - Free Report) second-quarter 2021 earnings of 56 cents per share surpassed the Zacks Consensus Estimate of 52 cents. The bottom line improved significantly from adjusted earnings of 26 cents in the prior-year quarter.
Bank OZK’s (OZK - Free Report) second-quarter 2021 earnings per share of $1.16 easily surpassed the Zacks Consensus Estimate of 94 cents. In the year-earlier quarter, the company recorded earnings of 39 cents.
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CIT Group (CIT) Beats on Q2 Earnings as Revenues Improve Y/Y
CIT Group Inc.’s second-quarter 2021 adjusted earnings per share of $2.09 outpaced the Zacks Consensus Estimate of $1.24 by a considerable margin. In the prior-year quarter, the company had incurred adjusted loss of 62 cents per share.
Results benefited from substantial reserve releases, improvement in revenues and lower expenses. Further, the balance sheet position remained strong.
After considering noteworthy items, net income available to common shareholders (GAAP basis) was $215 million or $2.14 per share against net loss of $98 million or 99 cents per share incurred in the year-ago quarter.
Revenues Rise, Expenses Down
Total net revenues (non-GAAP) were $477.6 million, up 16.3% year over year.
Net interest revenues were $266.3 million, growing 9% year over year.
Total non-interest income was $348.9 million, up 15%. The rise was due to an improvement in other non-interest income.
Net finance margin improved 31 basis points year over year to 2.45%.
Operating expenses (excluding noteworthy items and intangible asset amortization) were $249.1 million, down 15.5%.
Credit Quality Improves
The company recorded net provision benefit of $72.2 million against provision of $223.6 million in the year-earlier quarter. Net charge-offs were $26 million, plunging 84.7%.
Non-accrual loans declined 1.3% year over year to $549 million.
Balance Sheet Strong, Capital Ratios Improve
As of Jun 30, 2021, average interest-bearing cash and investment securities amounted to $10.83 billion, comprising $5.58 billion in interest-bearing cash, and $5.25 billion in investment securities and securities purchased under the agreement to resell.
As of Jun 30, 2021, Common Equity Tier 1 and Total Capital ratios (as calculated under the fully phased-in Regulatory Capital Rules) were 11.6% and 15.0%, respectively, compared with 10.0% and 13.2% at the end of the prior-year quarter.
Our View
CIT Group’s efforts to diversify revenues, strategic expansion initiatives and a strong balance sheet position are expected to support growth. The company has entered an all-stock merger deal with First Citizens BancShares, Inc., which is expected to close in the third quarter.
CIT Group Inc. Price, Consensus and EPS Surprise
CIT Group Inc. price-consensus-eps-surprise-chart | CIT Group Inc. Quote
Currently, CIT Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Hancock Whitney Corporation’s (HWC - Free Report) second-quarter 2021 adjusted earnings per share of $1.37 surpassed the Zacks Consensus Estimate of $1.15. The bottom line improved significantly from the prior-year quarter’s loss of $1.36.
Associated Banc-Corp’s (ASB - Free Report) second-quarter 2021 earnings of 56 cents per share surpassed the Zacks Consensus Estimate of 52 cents. The bottom line improved significantly from adjusted earnings of 26 cents in the prior-year quarter.
Bank OZK’s (OZK - Free Report) second-quarter 2021 earnings per share of $1.16 easily surpassed the Zacks Consensus Estimate of 94 cents. In the year-earlier quarter, the company recorded earnings of 39 cents.