CIT Group reported Q3/14 net income of $515 million, up from net income of $200 million for the year-ago quarter. CIT said net income for the three month period ended September 30, 2014 included a $375 million income tax benefit associated with the partial reversal of the valuation allowance related to the U.S. Federal deferred tax asset.

Net income for the nine month period ended September 30, 2014 was $879 million compared to $546 million for the period ended September 30, 2013.

“Our core businesses achieved solid financial performance this quarter as we made further progress in positioning CIT for future success,” said John Thain, chairman and chief executive officer. “We advanced our bank strategy through our announced acquisition of OneWest Bank, grew our earning assets, completed the acquisition of Direct Capital and made progress exiting our non-strategic portfolios. As we look towards 2015, we will continue to focus on enhancing shareholder value by growing our franchises, expanding CIT Bank, achieving our profitability targets and returning capital to our shareholders.”

Segment Highlights

Transportation & International Finance

Pre-tax earnings for the quarter were $162 million, up from $151 million in the year-ago quarter and from $148 million in the prior quarter, which included a $7 million net benefit in interest expense due to the refinancing of secured debt within the TRS.

The increase from the prior quarter reflected growth in all transportation divisions, with Aerospace and Maritime accounting for the majority of the growth. The $3.5 billion, or 22%, increase from September 30, 2013 included growth of $1.8 billion in aerospace; $1.4 billion in rail, which included the European rail acquisition in the 2014 first quarter; and $0.5 billion in maritime. New business volume was $1.3 billion and consisted of $0.6 billion of operating lease equipment, including the delivery of 7 aircraft and approximately 1,500 railcars, and the funding of $0.7 billion of finance receivables.

Provision for credit losses was $9 million, up slightly from the year-ago quarter and sequentially reflecting reserve build on new originations as charge-offs were down from both periods.

North American Commercial Finance

Pre-tax earnings for the quarter were $62 million, down from $84 million in the year-ago quarter and from $93 million in the prior quarter. The decrease from both quarters was largely attributable to higher credit costs.

Financing and leasing assets grew to $16.4 billion, up from $15.7 billion at June 30, 2014 and from $14.7 billion at September 30, 2013, reflecting the addition of approximately $550 million of loans and leases in Direct Capital reported in the Equipment Finance division, as well as solid new business volumes. Funded loan and lease volume totaled $1.6 billion, up from $1.4 billion in the year-ago quarter, and unchanged from the prior quarter.

Net finance revenue of $146 million increased from the year-ago and prior quarters, reflecting higher earning assets. Net finance margin was 3.91% compared to 4.26% in the year-ago quarter and 4.13% in the prior quarter. The decline in net finance margin from the year-ago quarter primarily reflects lower portfolio yields in Corporate Finance and Equipment Finance.

CIT Bank

Total assets were $20.3 billion at September 30, 2014, up from $18.3 billion at June 30, 2014, reflecting new business volumes and the Direct Capital acquisition, and $14.7 billion at September 30, 2013. CIT Bank funded $2.2 billion of new business volume, up 34% from the year-ago quarter and 8% sequentially.

To view the full CIT news release, click here.