CIT GROUP INC. (NYSE:CIT) Files An 8-K Other EventsItem 8.01 Other Events
On October 6, 2017, CIT Group Inc., a Delaware corporation (the “Company” or “CIT”) issued a press release announcing that CIT Bank, N.A. has agreed to sell Financial Freedom, its reverse mortgage servicing business, which is reported in discontinued operations, and a portfolio of approximately $900 million of reverse mortgage whole loans, including other real estate owned, as of June 30, 2017, which is reported in continuing operations, to an undisclosed buyer (the “Transaction”). The terms of the Transaction have not been disclosed. The Transaction is expected to close in the second quarter of 2018 and is subject to customary closing conditions, including the approval of certain government agencies and the consent of private investors related to the reverse mortgage servicing business. A copy of the press release is attached as Exhibit 99.1 and incorporated herein by reference.
In connection with the Transaction, CIT anticipates it will recognize a pre-tax charge of approximately $40 to $50 million in the third quarter of 2017. At closing, CIT anticipates it will recognize a pre-tax net gain currently estimated to be approximately $25 to $35 million. These amounts are prior to any incremental indemnification liabilities the Company may record. The agreement between the Company and the buyer contains representations and warranties and certain indemnifications to allocate risks between the parties, subject to certain caps and limitations.
Section 9 – Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
Forward-Looking Statements
This Form 8-K contains forward-looking statements within the meaning of applicable federal securities laws that are based upon our current expectations and assumptions concerning future events, which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. The words “expect,” “anticipate,” “estimate,” “forecast,” “initiative,” “objective,” “plan,” “goal,” “project,” “outlook,” “priorities,” “target,” “intend,” “evaluate,” “pursue,” “commence,” “seek,” “may,” “would,” “could,” “should,” “believe,” “potential,” “continue,” or the negative of any of those words or similar expressions is intended to identify forward-looking statements. All statements contained in this Form 8-K, other than statements of historical fact, including without limitation, statements about our plans, strategies, prospects and expectations regarding future events and our financial performance, are forward-looking statements that involve certain risks and uncertainties. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results, and our actual results may differ materially. Important factors that could cause our actual results to be materially different from our expectations include, among others, the risk that (i) the Company does not receive regulatory or other consents or approvals on a timely basis or approvals are subject to conditions that are not anticipated, (ii) modifications to the
terms of the transaction may be required in order to obtain or satisfy such approvals or conditions, (iii) the transaction does not close or there are changes in the anticipated timing for closing the transaction, (iv) there are difficulties, delays or unexpected costs in separating the reverse mortgage business from the consumer banking business of the Company, (v) business disruption during the pendency of or following the transaction, including diversion of management time, (vi) CIT is unsuccessful in implementing its strategy and business plan, (vii) CIT is unable to react to and address key business and regulatory issues, (viii) CIT is unable to achieve the projected revenue growth from its new business initiatives or the projected expense reductions from efficiency improvements, or (ix) CIT becomes subject to liquidity constraints and higher funding costs. We describe these and other risks that could affect our results in Item 1A, “Risk Factors,” of our latest Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the Securities and Exchange Commission. Accordingly, you should not place undue reliance on the forward-looking statements contained in this Form 8-K. These forward-looking statements speak only as of the date on which the statements were made. CIT undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except where expressly required by law.
CIT GROUP INC ExhibitEX-99.1 2 e75990ex99-1.htm PRESS RELEASE Exhibit 99.1 CIT Reaches Agreement to Sell Financial Freedom and Reverse Mortgage Portfolio Pasadena,…To view the full exhibit click here
About CIT GROUP INC. (NYSE:CIT)
CIT Group Inc. (CIT) is a bank holding company. The Company, together with its subsidiaries, provides financing, leasing and advisory services to middle market companies in a range of industries in North America, and equipment financing and leasing solutions to the transportation industry around the world. The Company’s segments include North America Banking (NAB), including Commercial Real Estate, Commercial Banking and Consumer Banking divisions; Transportation & International Finance (TIF), including Aerospace, Rail, Maritime Finance and International Finance divisions, and Legacy Consumer Mortgages (LCM), which includes single-family residential mortgage (SFR) loans and reverse mortgage loans. CIT products and services include account receivables collection; equipment leases; acquisition and expansion financing; factoring services; financial risk management; asset management and servicing; asset-based loans; insurance services; credit protection; debt restructuring, and deposits.
