NEW YORK (AP) -- Commercial lender CIT Group Inc. said Tuesday it turned a profit in the first quarter, reversing a loss in the year-ago quarter that was the result of taking a hefty charge.
CIT Group has worked to strengthen its balance sheet following its bankruptcy reorganization in late 2009. In the first quarter of 2012, CIT Group took a charge of $620 million to prepay high-cost debt. The moves, along with currently low interest rates, have reduced its debt costs.
The New York company, which lends mainly to small and mid-sized businesses, posted earnings of $162.6 million, or 81 cents per share, for the three months ended March 31. A year ago, it reported a loss of $427 million, or $2.13 per share.
Analysts were expecting a larger profit of 88 cents per share, according to FactSet.
The company said its net interest income, or earnings from loans and deposits, fell 17 percent to $355.8 million and noninterest income, which comes from fees and other items, fell 26 percent to $515 million.
Total loans rose to $22.1 billion, up from $20.5 billion last year, helped in part by acquisitions.
Net charge-offs, or loans written off as uncollectible, fell to $10 million from $22 million a year earlier. Loans considered past due fell 39 percent to $294 million, from $482 million last year.
That drop, plus gains related to portfolio growth, enabled the company set aside a lower amount, $20 million, to cover sour loans. Last year, its provision was $43 million.
Shares of CIT Group declined 98 cents, or 2.4 percent, to $40.47 in morning trading.
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