Quarterly profit at CIT Group plunged after the in Livingston, N.J., company recorded $167 million in charges tied to its discontinued reverse-mortgage servicing unit.
The $66.7 billion-asset company said in a press release Thursday that it earned $14.1 million, which was a significant decline from the $115.3 million it reported a year earlier. Earnings per share of 90 cents were 13 cents higher than the average estimate of analysts polled by Bloomberg.
The big charge stemmed from ongoing issues with CIT's Financial Freedom business, which the company inherited from its
CIT earlier this year
Ellen Alemany, CIT's chairman and chief executive, said in the release that she was "disappointed" by the Financial Freedom charges.
Net interest income was $212.8 million, compared to $18.6 million last year. The loan-loss provision rose 52%, to $28.1 million. The net finance margin expanded by 32 basis points, to 3.65%.
Fee income rose by 13%, to $673.6 million, on gains from the sale of leasing equipment and gains on derivatives.
Noninterest expenses rose 31%, to $582.9 million, on higher salary expenses and professional fees.