UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934	☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended June 30, 2021
	For the quarterly period ended September 30, 2021

Commission File Number: 001-31369

CIT GROUP INC.

(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		65-1051192 (IRS Employer Identification Number)
11 West 42nd Street New York, New York (Address of Registrant’s principal executive offices)		10036 (Zip Code)
11 West 42nd Street, New York, New York (Address of Registrant’s principal executive offices)		10036 (Zip Code)
(212) 461-5200 (Registrant’s telephone number)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CIT	New York Stock Exchange
5.625% Non-Cumulative Perpetual Preferred Stock, Series B, par value $0.01 per share	CITPRB	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of ‘large accelerated filer,’ ‘accelerated filer’, ‘smaller reporting company’ and ‘emerging growth company’ in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of ~~July~~October 22, 2021, there were 99,~~144~~169,~~200~~700 shares of the registrant’s common stock outstanding.

Table of Contents

CONTENTS

Part One — Financial Information:

Item 1.	Financial Statements	2
	Condensed Consolidated Balance Sheets (Unaudited)	2
	Condensed Consolidated Statements of Operations (Unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
	and
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	38
Item 4.	Controls and Procedures	77

Part Two — Other Information:

Item 1.	Legal Proceedings	78
Item 1A.	Risk Factors	78
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	78
Item 4.	Mine Safety Disclosures	78
Item 6.	Exhibits	79
Signatures		81

Table of Contents

Part One — Financial Information

Item 1. Financial Statements

CIT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (dollars in millions — except share data)

	June 30,			December 31,
	September 30,			December 31,
	2021			2020
Assets
Cash and due from banks, including restricted balances of $25.4 at June 30, 2021 and $41.7 at December 31, 2020 (see Note 8 for amounts pledged)	$	146.6		$	174.6
Cash and due from banks, including restricted balances of $34.2 at September 30, 2021 and $41.7 at December 31, 2020 (see Note 8 for amounts pledged)	$	169.7		$	174.6
Interest bearing cash, including restricted balances of $47.3 at June 30, 2021 and $2.6 at December 31, 2020 (see Note 8 for amounts pledged)		5,134.1			3,837.1
Interest bearing cash, including restricted balances of $59.4 at September 30, 2021 and $2.6 at December 31, 2020 (see Note 8 for amounts pledged)		4,428.8			3,837.1
Securities purchased under agreement to resell		~~150~~100.0			150.0
Investment securities (see Notes 6 and 8 for amounts pledged)		5,~~295~~775.82			6,889.0
Assets held for sale		5195.58			721.2
Loans (see Note 8 for amounts pledged)		33,~~711~~461.10			36,144.6
Allowance for credit losses		(~~850~~790.64	)		(1,063.8	)
Total loans, net of allowance for credit losses		32,~~860~~670.56			35,080.8
Operating lease equipment, net (see Note 8 for amounts pledged)		7,~~781~~937.85			7,836.6
Bank-owned life insurance		1,~~185~~193.24			1,168.8
Other assets, including $302.1 at June 30, 2021 and $431.6 at December 31, 2020, at fair value		2,098.2			2,248.5
Other assets, including $268.5 at September 30, 2021 and $431.6 at December 31, 2020 at fair value		2,049.0			2,248.5
Total Assets	$	54,~~703~~420.70		$	58,106.6
Liabilities
Deposits	$	4140,~~271~~237.03		$	43,071.6
Credit balances of factoring clients		1,~~530~~556.56			1,719.9
Other liabilities, including $71.7 at June 30, 2021 and $79.2 at December 31, 2020, at fair value		1,622.3			1,754.9
Other liabilities, including $77.9 at September 30, 2021 and $79.2 at December 31, 2020 at fair value		2,203.9			1,754.9
Borrowings, including $0.0 at June 30, 2021 and $500.0 at December 31, 2020 contractually due within twelve months		4,244.1			5,837.3
Borrowings, including $1,147.0 at September 30, 2021 and $500.0 at December 31, 2020 contractually due within twelve months		4,247.6			5,837.3
Total Liabilities		48,~~667~~245.94			52,383.7
Stockholders’ Equity
Preferred Stock: $0.01 par value, 100,000,000 shares authorized, 8,325,000 shares issued and outstanding at June 30, 2021 and December 31, 2020		525.0			525.0
Preferred Stock: $0.01 par value, 100,000,000 shares authorized, 8,325,000 shares issued and outstanding at September 30, 2021 and December 31, 2020		525.0			525.0
Common Stock: $0.01 par value, 600,000,000 shares authorized
Issued: 164,106,299 at June 30, 2021 and 163,309,861 at December 31, 2020		1.6			1.6
Issued: 164,134,157 at September 30, 2021 and 163,309,861 at December 31, 2020		1.6			1.6
Outstanding: 99,143,345 at June 30, 2021 and 98,609,395 at December 31, 2020
Outstanding: 99,167,023 at September 30, 2021 and 98,609,395 at December 31, 2020
Paid-in capital		6,~~922~~930.51			6,892.0
Retained earnings		12,~~873~~011.70			1,428.3
Accumulated other comprehensive income (loss)		(~~115~~121.42	)		35.7
Treasury stock: 64,962,954 shares at June 30, 2021 and 64,700,466 shares at December 31, 2020 at cost		(3,171.6	)		(3,159.7	)
Treasury stock: 64,967,134 shares at September 30, 2021 and 64,700,466 shares at December 31, 2020 at cost		(3,171.9	)		(3,159.7	)
Total Common Stockholders’ Equity		5,~~510~~649.86			5,197.9
Total Equity		6,~~035~~174.86			5,722.9
Total Liabilities and Equity	$	54,~~703~~420.70		$	58,106.6

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

CIT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (dollars in millions — except per share data)

Quarters Ended June 30,

Six Months Ended June 30,

Quarters Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Interest income

Interest and fees on loans

~~355~~341.79

~~417~~395.28

~~719~~1,061.76

~~884~~1,280.86

Other interest and dividends

17.49

2927.75

4159.54

75103.72

Interest income

~~373~~359.18

~~446~~423.93

~~761~~1,121.20

~~960~~1,383.58

Interest expense

Interest on deposits

5047.73

~~138~~103.32

~~111~~159.92

~~294~~398.91

Interest on borrowings

5655.17

6462.23

~~114~~170.52

~~133~~195.36

Interest expense

~~106~~103.80

~~202~~165.5

~~226~~329.4

~~428~~593.27

Net interest revenue

~~266~~256.38

~~244~~257.48

~~534~~791.86

~~532~~790.31

Provision for credit losses

(7267.21

)

~~223~~63.63

(~~189~~256.67

)

~~737~~800.58

Net interest revenue, after credit provision

~~338~~323.59

20194.85

~~724~~1,048.43

(~~205~~10.27

)

Non-interest income

Rental income on operating leases

~~188~~186.2

~~200~~201.93

~~382~~569.91

~~410~~612.70

Other non-interest income

~~160~~124.7

~~102~~146.60

~~390~~515.63

~~233~~379.2

Total non-interest income

~~348~~310.9

~~303~~347.53

~~773~~1,084.54

~~643~~991.92

Total revenue, net of interest expense and credit provision

~~687~~634.48

~~324~~541.38

12,~~497~~132.97

~~438~~980.75

Non-interest expenses

Depreciation on operating lease equipment

8285.81

8182.15

~~167~~252.56

~~159~~241.49

Maintenance and other operating lease expenses

5450.85

5648.16

~~106~~156.49

~~109~~158.73

Operating expenses

~~251~~268.2

~~360~~295.45

~~525~~793.24

~~694~~990.83

Goodwill impairment

-—

344.7

(Gain) loss on debt extinguishment and deposit redemption

-—

~~(14.8~~—

)

0.1

(14.8

)

Total non-interest expenses

~~388~~403.8

~~482~~426.86

~~799~~1,203.20

1,~~293~~720.84

Income (loss) before provision (benefit) for income taxes

~~298~~231.60

~~(158~~115.52

)

~~698~~929.7

(~~855~~739.19

)

Provision (benefit) for income taxes

7155.75

~~(73~~29.25

)

~~168~~223.05

(~~145~~116.50

)

Net income (loss)

~~226~~175.95

(85.37

)

~~530~~706.72

(~~709~~623.69

)

Preferred stock dividends

122.38

1517.19

1618.19

Net income (loss) available to common shareholders

~~214~~172.67

~~(97~~82.69

)

~~515~~688.63

(~~725~~642.78

)

Income (loss) per common share

Basic

21.1774

(0.9984

)

56.2195

(76.3954

)

Diluted

21.1472

(0.9984

)

56.1789

(76.3954

)

Average number of common shares (thousands)

Basic

99,~~110~~168

98,~~438~~523

9899,~~961~~031

98,~~263~~350

Diluted

100,~~340~~432

98,~~438~~556

99,~~708~~950

98,~~263~~350

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

CIT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(dollars in millions)

	Quarters Ended June 30,						Six Months Ended June 30,
	Quarters Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Net income (loss)	$	~~226~~175.95		$	(85.37	)	$	~~530~~706.72		$	(~~709~~623.69	)
Other comprehensive (loss) income, net of tax
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		-10.3			(0.16	)		(010.12	)		(1.0.4	)
Net unrealized (losses) gains on available for sale securities		32(16.45	)		(120.01	)		(~~151~~168.72	)		~~116~~95.09
Changes in benefit plans net gains and prior service (cost)/credit		0.4			0.1			01.71			23.90
Other comprehensive (loss) income, net of tax	$	32(5.8	)	$	(119.04	)	$	(~~151~~156.19	)	$	~~117~~98.95
Comprehensive income (loss)	$	~~259~~169.7		$	~~(86~~66.3	)	$	~~379~~549.63		$	(~~591~~525.74	)

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

CIT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (dollars in millions)

	Preferred Stock		Common Stock		Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock, at Cost			Total Equity
March 31, 2021	$	525.0	$	1.6	$	6,914.3		$	1,694.5		$	(148.2	)	$	(3,171.5	)	$	5,815.7
June 30, 2021	$	525.0	$	1.6	$	6,922.5		$	1,873.7		$	(115.4	)	$	(3,171.6	)	$	6,035.8
Net income		—		—	—				~~226~~175.95			—			—			~~226~~175.95
Other comprehensive income, net of tax		—		—		—			—			32.8			—			32.8
Other comprehensive loss, net of tax		—		—		—			—			(5.8	)		—			(5.8	)
Dividends paid ($0.35 per common share and $29.00 per preferred A share and $0.35 per preferred B share)		—		—	—				(47.7	)		—			—			(47.7	)
Dividends paid ($0.35 per common share and $0.35 per preferred B share)		—		—	—				(38.2	)		—			—			(38.2	)
Amortization of stock compensation expenses		—		—		76.27			—			—			(0.13	)		76.14
Employee stock purchase plan		—		—		1.0.9		—				—			—			1.0.9
June 30, 2021	$	525.0	$	1.6	$	6,922.5		$	1,873.7		$	(115.4	)	$	(3,171.6	)	$	6,035.8
September 30, 2021	$	525.0	$	1.6	$	6,930.1		$	2,011.0		$	(121.2	)	$	(3,171.9	)	$	6,174.6
March 31, 2020	$	525.0	$	1.6	$	6,873.3		$	1,552.1		$	66.8		$	(3,158.0	)	$	5,860.8
June 30, 2020	$	525.0	$	1.6	$	6,885.5		$	1,419.4		$	65.8		$	(3,158.0	)	$	5,739.3
Net loss		—		—		—			(85.3	)		—			—			(85.3	)
Net income		—		—		—			85.7			—			—			85.7
Other comprehensive loss, net of tax	—		—		—			—				(119.04	)	—				(119.04	)
Dividends paid ($0.35 per common share and $29.00 per preferred A share and $0.35 per preferred B share)		—		—		—			(47.4	)		—			—			(47.4	)
Dividends paid ($0.35 per common share and $0.35 per preferred B share)		—		—		—			(38.0	)		—			—			(38.0	)
Amortization of stock compensation expenses		—		—		11(4.16	)		—			—			—(0.2	)		11(4.18	)
Employee stock purchase plan		—		—		1.12			—			—			—			1.12
June 30, 2020	$	525.0	$	1.6	$	6,885.5		$	1,419.4		$	65.8		$	(3,158.0	)	$	5,739.3
September 30, 2020	$	525.0	$	1.6	$	6,882.1		$	1,467.1		$	46.4		$	(3,158.2	)	$	5,764.0
December 31, 2020	$	525.0	$	1.6	$	6,892.0		$	1,428.3		$	35.7		$	(3,159.7	)	$	5,722.9
Net income		—		—		—			~~530~~706.72			—			—			~~530~~706.72
Other comprehensive loss, net of tax		—		—		—			—			(~~151~~156.19	)		—			(~~151~~156.19	)
Dividends paid ($0.70 per common share and $29.00 per preferred A share and $0.70 per preferred B share)		—		—		—			(85.3	)		—			—			(85.3	)
Dividends paid ($1.05 per common share and $29.00 per preferred A share and $1.05 per preferred B share)		—		—		—			(123.5	)		—			—			(123.5	)
Amortization of stock compensation expenses		—		—		2835.52			—			—			(1112.92	)		1623.60
Employee stock purchase plan		—		—		2.09			—			—			—			2.09
June 30, 2021	$	525.0	$	1.6	$	6,922.5		$	1,873.7		$	(115.4	)	$	(3,171.6	)	$	6,035.8
September 30, 2021	$	525.0	$	1.6	$	6,930.1		$	2,011.0		$	(121.2	)	$	(3,171.9	)	$	6,174.6
December 31, 2019	$	525.0	$	1.6	$	6,853.7		$	2,307.6		$	(52.1	)	$	(3,296.8	)	$	6,339.0
Adoption of ASU 2016-13		—		—		—			(82.4	)		—			—			(82.4	)
Net loss		—		—		—			(~~709~~623.69	)		—			—			(~~709~~623.69	)
Other comprehensive loss, net of tax		—		—		—			—			117.9			—			117.9
Other comprehensive income, net of tax		—		—		—			—			98.5			—			98.5
Dividends paid ($0.70 per common share and $29.00 per preferred A share and $0.83 per preferred B share)		—		—		—			(86.1	)		—			—			(86.1	)
Dividends paid ($1.05 per common share and $29.00 per preferred A share and $1.18 per preferred B share)		—		—		—			(124.1	)		—			—			(124.1	)
Issuance of common stock - acquisition		—		—		—			(10.1	)		—			151.3			141.2
Amortization of stock compensation expenses		—		—		2925.93			—			—			(12.57	)		1712.46
Employee stock purchase plan		—		—		13.91			—			—			—			13.91
June 30, 2020	$	525.0	$	1.6	$	6,885.5		$	1,419.4		$	65.8		$	(3,158.0	)	$	5,739.3
September 30, 2020	$	525.0	$	1.6	$	6,882.1		$	1,467.1		$	46.4		$	(3,158.2	)	$	5,764.0

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

CIT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (dollars in millions)

	Six Months Ended June 30,
	Nine Months Ended September 30,
	2021			2020
Cash Flows from Operations
Net income (loss)	$	~~530~~706.72		$	(~~709~~623.69	)
Adjustments to reconcile net income (loss) to net cash flows from operations:
(Benefit) provision for credit losses		(~~189~~256.67	)		~~737~~800.58
Depreciation on operating lease equipment		~~167~~252.56			~~159~~241.49
Amortization of stock compensation expenses		2835.52			2925.93
Net gain on asset sales and impairments on assets held for sale		(~~229~~284.16	)		(85150.02	)
Loss on debt extinguishment and deposit redemption		0.1			(14.8	)
Provision for deferred income taxes		148.0			(127.2	)
Provision (benefit) for deferred income taxes		193.4			(115.9	)
Increase (decrease) in loans held for sale		0.4			(51.7	)
Increase in loans held for sale		(24.5	)		(25.4	)
Goodwill impairment		—			344.7
Decrease (increase) in other assets		~~227~~240.90			(~~383~~285.58	)
Decrease in other liabilities		(~~267~~286.96	)		(7444.49	)
Other operating activities		4272.02			4752.17
Net cash flows provided by (used in) operations		458.5			(127.6	)
Net cash flows provided by operations		647.3			204.5
Cash Flows from Investing Activities
Changes in loans, net		12,~~868~~009.02			(~~595~~203.76	)
Purchases of investment securities and securities purchased under agreement to resell		(2,~~247~~643.43	)		(24,~~283~~147.98	)
Proceeds from sales and maturities of investment securities and securities purchased under agreement to resell		34,~~673~~185.47			56,~~500~~619.69
Proceeds from asset and receivable sales		1,~~283~~505.70			~~243~~494.35
Purchases of assets to be leased and other equipment		(~~275~~550.69	)		(~~685~~857.37	)
Proceeds from sale of OREO, net of repurchases		1.36			911.09
Purchase of bank owned life insurance		—			(100.0	)
Acquisition, net of cash received		—			(~~727~~720.1	)
Other investing activities		—5.6			(6967.04	)
Net cash flows provided by investing activities		4,~~303~~512.49			1,~~291~~029.97
Cash Flows from Financing Activities
Proceeds from the issuance of term debt and FHLB advances		~~603~~604.58			2,204.18
Repayments of term debt and FHLB advances		(2,~~204~~212.75	)		(1,~~368~~675.89	)
Net (decrease) increase in deposits		(12,~~801~~835.1	)		32,~~689~~581.36
Dividends paid		(85123.35	)		(86124.1	)
Other financing activities		(67.30	)		(~~203~~199.71	)
Net cash flows (used in) provided by financing activities		(34,~~493~~573.93	)		42,~~234~~787.83
Effect of exchange rate changes on cash, cash equivalents and restricted cash		1.(0.1	)		(41.45	)
Increase (decrease) in cash, cash equivalents and restricted cash		~~1,269~~586.08			54,~~394~~020.70
Cash, cash equivalents and restricted cash beginning of period		4,011.7			2,685.6
Cash, cash equivalents and restricted cash end of period	$	54,~~280~~598.75		$	86,~~080~~705.36
Supplementary Cash Flow Disclosures
Interest paid	$	(~~221~~355.80	)	$	(~~425~~630.31	)
Federal, foreign, state and local income taxes (paid) refunded, net		(812.64	)		172.1
Supplementary Non Cash Flow Disclosure
Transfer of assets from held for investment to held for sale	$	~~357~~495.05			65190.78
Transfer of assets from held for sale to held for investment		1011.82			1825.57
Transfers of assets to OREO		24.23			0.3
Commitments extended during the period on affordable housing investment credits		6580.4			5284.19
Issuance of common stock - acquisition		—			141.2

The following tables shows a reconciliation of cash, cash equivalents and restricted cash on the Balance Sheet to that presented in the above Statements of Cash Flow.

	Six Months Ended June 30,
	Nine Months Ended September 30,
	2021		2020
Cash and due from banks, including restricted balances of $25.4 and $23.7 at June 30, 2021 and 2020, respectively	$	146.6	$	181.6
Cash and due from banks, including restricted balances of $34.2 and $27.8 at September 30, 2021 and 2020, respectively	$	169.7	$	175.7
Interest-bearing cash, including restricted balances of $47.3 and $2.0 at June 30, 2021 and 2020, respectively		5,134.1		7,898.7
Interest-bearing cash, including restricted balances of $59.4 and $2.0 at September 30, 2021 and 2020, respectively		4,428.8		6,529.9
Total cash, cash equivalents, and restricted cash shown in the Statement of Cash Flows	$	54,~~280~~598.75	$	86,~~080~~705.36

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

CIT Group Inc. and Subsidiaries – Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 — BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CIT Group Inc. is a bank holding company ("BHC") and a financial holding company ("FHC"). CIT Group Inc., together with its subsidiaries (collectively "we", "our", "CIT" or the "Company"), is regulated by the Board of Governors of the Federal Reserve System ("FRB") and the Federal Reserve Bank of New York ("FRBNY") under the U.S. Bank Holding Company Act of 1956, as amended. CIT was formed in 1908 and provides financing, leasing and advisory services, principally to middle-market companies in a wide variety of industries, primarily in North America.

We also provide banking and related services to commercial and individual customers through our banking subsidiary, CIT Bank, N.A. ("CIT Bank" or the "Bank"), which includes a regional branch network of approximately 80 branches and its online bank.

CIT Bank is regulated by the Office of the Comptroller of the Currency of the U.S. Department of the Treasury ("OCC"). In addition, CIT Bank, as an insured depository institution, is supervised by the Federal Deposit Insurance Corporation (“FDIC”).

BASIS OF PRESENTATION

Basis of Financial Information

These consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial information and accordingly do not include all information and note disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. ~~The~~In the opinion of management, the financial statements in this Form 10-Q, ~~in the opinion of management,~~ include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of CIT’s financial position, results of operations and cash flows in accordance with GAAP. These consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2020 ("2020 Form 10-K").

The accounting and financial reporting policies of CIT conform to GAAP and the preparation of the consolidated financial statements is in conformity with GAAP, which requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates and assumptions. Some of the more significant estimates include: Allowance for Credit Losses (“ACL”) and the realizability of deferred tax assets. Additionally, where applicable, the policies conform to accounting and reporting guidelines prescribed by bank regulatory authorities.

Principles of Consolidation

The accompanying consolidated financial statements include financial information related to CIT and its majority-owned subsidiaries and those variable interest entities (“VIEs”) where the Company is the primary beneficiary (“PB”), if any.

In preparing the consolidated financial statements, inter-company accounts and transactions have been eliminated. Assets held in an agency or fiduciary capacity are not included in the consolidated financial statements.

The current period’s results of operations do not necessarily indicate the results that may be expected for any other interim period or for the full year as a whole.

Announcement of Definitive Merger Agreement

On October 16, 2020, First Citizens BancShares, Inc. ("First Citizens"), the parent company of First-Citizens Bank & Trust Company, and CIT, the parent company of CIT Bank, N.A., jointly announced that they had entered into a definitive agreement under which the companies will combine in an all-stock merger. On July 14, 2021, CIT and First Citizens jointly announced that the proposal to merge the two companies ~~has~~ received regulatory approval from the FDIC. The merger ~~has~~had already received approval from the Office of the North Carolina Commissioner of Banks. Completion of the proposed merger remains subject to approval from the ~~Board of Governors of the Federal Reserve System~~FRB, and ~~closing is expected in~~ the ~~third quarter, subject to such regulatory approval and the~~ satisfaction or waiver of other customary closing conditions. ~~See Note 16 – Subsequent Event.~~

On September 30, 2021, CIT Group Inc. and First Citizens jointly announced that the two companies agreed to extend the merger agreement from October 15, 2021, to March 1, 2022.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and Interagency Statement

On March 27, 2020, the CARES Act was signed into law. The CARES Act gives financial institutions temporary relief from the accounting and disclosure requirements related to troubled debt restructurings (“TDRs”) under ASC 310-40 and past due and non-accrual reporting in certain situations relating to the COVID-19 pandemic. With respect to past due and non-accrual loans, the CARES Act provides that financial institutions are not expected to designate loans with payment accommodations granted due to COVID-19 as past due or non-accrual if they were current on the date used to determine the borrower’s delinquency status for the purpose of providing the deferment.

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Additionally, on April 7, 2020, a group of federal and state government banking agencies issued an Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised) (the “Interagency Statement”) that offers some practical expedients for evaluating whether loan modifications that occur in response to the COVID-19 pandemic are TDRs. The Interagency Statement interprets, but does not suspend, ASC 310-40,. asUnder the Interagency Statement, any loan modification that meets either of these practical expedients would not automatically be considered a TDR because the borrower is presumed not to be experiencing financial difficulty at the time of the loan modification.

CIT applies the TDR provisions of the CARES Act on a product-type basis, or on a loan-by-loan basis, for eligible loan modifications. For eligible loans for which the CARES Act is not applied, CIT follows the applicable guidance of the Interagency Statement. For payment deferrals granted to borrowers impacted by COVID-19, CIT has elected to continue to recognize interest income (at a modified effective rate) subject to consideration of whether the loan should be placed on non-accrual status. In addition, CIT monitors deferred amounts and establishes a credit loss reserve for the estimated amount of any balances that will not be recovered for COVID-19 loans.

After the initial payment deferral period granted due to COVID-19, on a case by case basis where requested, borrowers may be offered an additional deferral of up to 90 days pursuant to the CARES Act or Interagency Statement guidance outlined above. After the deferral period, amounts deferred must be repaid based on modified terms, including adding the unpaid amounts to the end of the contract term, spread throughout the remaining term, or other arrangements made on a case by case basis.

Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic

On April 10, 2020, the FASB Staff issued a question-and-answer document (the “Lease Concessions Q&A”) on Topic 842: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic. The Lease Concessions Q&A provides that entities may elect to apply or not apply the lease modification guidance in ASC 842, Leases, for lease concessions provided by lessors as a result of the COVID-19 pandemic. This election is available for concessions that result in the total payments required by the modified contract being substantially the same as or less than total payments required by the original contract. CIT has elected not to apply the lease modification guidance in ASC 842 for such lease concessions as permitted by the Lease Concessions Q&A. We account for these lease concessions prospectively recognizing income on a straight-line basis for operating leases and a modified effective rate for finance leases.

SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies are included in the Company's 2020 Form 10-K. There were no material changes to these policies during the ~~six~~nine months ended ~~June~~September 30, 2021.

Financial Accounting Standards Adopted as of January 1, 2021

The following pronouncements were issued by the Financial Accounting Standards Board (“FASB”) and adopted by CIT as of January 1, 2021. Refer to Note 1 – Business and Summary of Significant Accounting Policies in our 2020 Form 10-K for a detailed description of these pronouncements:

•

ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The adoption of this standard did not have a material impact on CIT’s consolidated financial statements and disclosures.

•

ASU 2020-09, Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762. The adoption of this standard did not have a material impact on CIT’s consolidated financial statements and disclosures.

•

ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs. The adoption of this standard did not have a significant impact on CIT’s consolidated financial statements and disclosures.

Recent Accounting Pronouncements

The following accounting pronouncements were issued by the FASB but are not yet effective for CIT.

Standard	Summary of Guidance	Effect on CIT's Financial Statements
ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and subsequent related ASUs Issued March 2020 with Updates through January 2021	•The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. •The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. •For contract modifications, the amendments provide the optional relief of accounting for the modification as a continuation of the existing contract without additional analysis. In addition, companies can consider embedded features to be clearly and closely related to the host contract without reassessment. •For hedge accounting, entities can continue hedge accounting when certain critical terms of a hedging relationship change. Moreover, companies can perform some effectiveness assessments in ways that disregard certain potential sources of ineffectiveness. •Entities may make a one-time election to sell and/or transfer debt securities classified as held-to-maturity (“HTM”), that both reference an eligible reference rate and were classified as HTM before January 1, 2020. This one-time election may be made at any time after March 12, 2020 but no later than December 31, 2022. •The ASU applies prospectively to contract modifications and hedging relationships. •ASU 2021-01 clarifies that certain optional expedients and exceptions in Topic 848 apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. •An entity may elect to apply the amendments in this update on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be issued.	•~~Entities~~The ~~can apply the~~ amendments in this ~~update~~Update asare ofeffective ~~the~~for ~~beginning~~all ofentities ~~the~~as ~~interim~~of ~~period that includes~~ March 12, 2020 ~~(January 1, 2020 for calendar year-end companies) or any date thereafter. However, the guidance will only be available for a limited time (generally~~ through December 31, 2022). •CIT is currently evaluating the optional expedients and exceptions provided by this ASU, the timing of the election of the standard, and its impact on the Company’s consolidated financial statements and disclosures. •In the fourth quarter of 2020, CIT elected to apply the contract modification relief to the interest rate swap contracts for which the discount rate changed from the Federal Funds Rates to the Secured Overnight Financing Rate (“SOFR”) due to discounting transition by the Central Counterparties (i.e., Chicago Mercantile Exchange and LCH Clearnet). In addition, CIT elected to apply the hedge accounting relief to ~~the hedging~~ interest rate hedge swaps, which allows the Company to not consider a change in the interest rate used for the discounting of a derivative hedging instrument as a change to the critical terms of the hedging relationship. •On October 23, 2020, the International Swaps and Derivatives Association ("ISDA") published the Interbank offered rate ("IBOR") Fallbacks Supplement and IBOR Fallbacks Protocol, effective January 25, 2021. The supplement incorporates the fallbacks into new covered IBOR derivatives referencing the 2006 ISDA Definitions unless the parties specifically agree to exclude them. CIT adhered to the protocol beginning in January 2021. •The ~~Company will continue to assess the impact as the reference rate transition occurs through December 31, 2022. •The~~ HTM one-time election was not applicable to CIT as the Company did not have any HTM debt securities as of January 1, 2020. •CIT is currently evaluating the impact of the optional expedients on the Company’s consolidated financial statements and disclosures.

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ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

Issued August 2020

•The amendments in this update reduce the number of models used to account for convertible instruments, amend diluted earnings per share calculations for convertible instruments, amend the requirements for a contract (or embedded derivative) that is potentially settled in an entity’s own shares to be classified in equity, and expand disclosure requirements for convertible instruments.

•Effective for CIT as of January 1, 2022. Early adoption is permitted.

•This ASU is not expected to have a material impact on CIT’s consolidated statements and disclosures as the Company currently does not have any convertible instrument within the scope of this ASU.

ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options

Issued May 2021

•The amendments in this update clarifies an issuer's accounting for certain modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The ASU requires that such modifications or exchanges be treated as an exchange of the original instrument for a new instrument. An issuer should measure the effect of such modifications or exchanges based on analysis of the difference between the fair value of the modified instrument and the fair value of that instrument immediately before modification or exchange. Recognition of a modification or an exchange of a freestanding equity-classified written call option is then based upon the substance of the transaction.

•Effective for CIT as of January 1, 2022. Early adoption is permitted.

•This ASU is not expected to have a material impact on CIT’s consolidated statements and disclosures as the Company currently does not have any freestanding equity-classified written call options within the scope of this ASU.

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ASU 2021-05, Leases, (Topic 842), Lessors - Certain Leases with Variable Lease Payments

Issued July 2021

•The amendments in this update improve lessor accounting for certain leases with variable lease payments so that lessors are no longer required to recognize a day-one selling loss upon lease commencement when specified criteria are met. Specifically this ASU requires a lessor to classify a lease with variable payments that do not depend on a reference index or a rate as an operating lease if classifying the lease as a sales-type lease or a direct financing lease would result in the recognition of a day-one selling loss at lease commencement. A day-one selling loss is not recognized under operating lease accounting.

•Effective for CIT as of January 1, 2022. Early adoption is permitted.

•This ASU is not expected to have a material impact on CIT’s consolidated statements and disclosures as the Company has not originated finance leases which required a day-one selling loss at lease commencement.

NOTE 2 — ACQUISITIONS

On January 1, 2020, CIT Bank acquired Mutual of Omaha Bank (“MOB”), the savings bank subsidiary of Mutual of Omaha Insurance Company and Omaha Financial Holdings, Inc., for approximately $1 billion in exchange for 100% of all outstanding shares of MOB common stock. The original consideration was comprised of approximately $850 million in cash and approximately 3.1 million shares of CIT Group Inc. common stock (valued at approximately $141 million based on the closing market price on December 31, 2019, the last trading price before the acquisition).

The acquisition enhances CIT’s deposit and commercial banking capabilities by adding a new channel of deposits related to homeowners’ associations (“HOA”) and enhances CIT’s middle-market commercial banking business through the addition of relationship banking teams and expanded product and technology solutions. The acquisition was accounted for as a business combination.

Assets acquired totaled approximately $8.6 billion, including $6.3 billion of loans, $115.2 million of goodwill and $102.6 million of intangible assets and included $7.6 billion of assumed liabilities, including $7.0 billion of deposits, and 25 bank branches. The assets acquired, liabilities assumed, and consideration exchanged were recorded at their estimated fair values.

Interest income, non-interest income and net loss of $~~134~~191.97 million, $1927.86 million and $8761.38 million, respectively, related to MOB were included in CIT’s Consolidated Statement of Operations for the ~~six~~nine months ended ~~June~~September 30, 2020. The MOB net loss included $44.8 million of MOB ~~Day~~day 1 provision for credit losses related to the non-PCD loans. Operating expenses for the ~~six~~nine months ended ~~June~~September 30, 2020 included $3749.06 million of merger and integration costs related to MOB. Operations of MOB were fully integrated during 2020.

NOTE 3 — LOANS

Unless otherwise noted, loans held for sale are not included in the amounts presented throughout this note.

Loans by Product (dollars in millions)

	June 30, 2021		December 31, 2020
	September 30, 2021		December 31, 2020
Commercial loans	$	26,063.3	$	27,410.9
Commercial Loans	$	26,055.9	$	27,410.9
Financing leases and leverage leases		2,187.1		2,318.0
Financing Leases and Leverage Leases		2,119.4		2,318.0
Total commercial		28,~~250~~175.43		29,728.9
Consumer loans		5,460.7		6,415.7
Consumer Loans		5,285.7		6,415.7
Total loans	$	33,~~711~~461.10	$	36,144.6

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The following table presents loans by segment, based on obligor location:

Loans (dollars in millions)

	June 30, 2021						December 31, 2020
	September 30, 2021						December 31, 2020
	Domestic		International		Total		Domestic		International		Total
Commercial Banking	$	2625,~~092~~851.09	$	1,~~173~~365.92	$	27,~~265~~217.91	$	27,323.4	$	1,313.1	$	28,636.5
Consumer Banking(1)		6,~~445~~243.29		-—		6,~~445~~243.29		7,508.1		-—		7,508.1
Total	$	32,~~537~~095.28	$	1,~~173~~365.92	$	33,~~711~~461.10	$	34,831.5	$	1,313.1	$	36,144.6

(1) The Consumer Banking segment includes certain commercial loans, primarily consisting of a portfolio of Small Business Administration ("SBA") loans and Community Development Lending loans. These loans are excluded from the Consumer loan balances and included in the Commercial loan balances in product related tables in this note.

The following table presents selected components of the net investment in loans:

Components of Net Investment (dollars in millions)

	June 30,			December 31,
	September 30,			December 31,
	2021			2020
Unearned income	$	(~~358~~353.98	)	$	(373.9	)
Net unamortized discounts		(333.7	)		(434.4	)
Unamortized (discounts) premiums		(284.4	)		(434.4	)
Net unamortized deferred costs		3839.8			35.8

Certain of the following tables present credit-related information at the “class” level. A class is generally a disaggregation of a portfolio segment. In determining the classes, CIT considered the loan characteristics and methods it applies in monitoring and assessing credit risk and performance.

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assessing credit risk and performance.

Credit Quality Indicators

Management monitors credit quality of commercial loans and financing leases based upon risk rating classifications consistent with bank regulatory guidance and consumer loans based upon FICO scores and loan-to-value ratios (“LTV”).

The definitions of the commercial loan ratings are as follows:

•	Pass — loans in this category do not meet the criteria for classification in one of the categories below.

•	Special mention — loans in this category exhibit potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of a loan’s repayment prospects.

•

Classified — loans in this category range from: (1) loans that exhibit a well-defined weakness and are inadequately protected by the current sound worth and paying capacity of the borrower, and are characterized by the distinct possibility that some loss will be sustained if the deficiencies are not corrected to (2) loans with weaknesses that make collection or liquidation in full unlikely on the basis of current facts, conditions, and values. Classified loans can accrue interest or be placed on non-accrual depending on the Company’s evaluation of these factors.

Commercial criticized loans include loans with a rating of special mention or classified.

For consumer loans, we monitor credit quality utilizing current LTV of the underlying collateral to assess potential loss severity in the event of default and the borrower FICO scores to evaluate borrowers’ credit payment history. The Company examines LTV migration and stratifies LTV into categories to monitor risk in the loan classes. The Company periodically updates the property values of real estate collateral (for home equity and residential mortgages) to calculate current LTV ratios, adjusted based on the Case-Shiller Home Price Indices. A loan to a borrower with a low FICO score (less than 660) is considered to be of higher risk than a loan to a borrower with a higher FICO score. Generally, a loan to a borrower with a high LTV ratio and a low FICO score is at greater risk of default than a loan to a borrower that has both a high LTV ratio and a high FICO score.

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The following table summarizes commercial loans disaggregated by year of origination and by risk rating., ~~The~~while the consumer loan LTV ratios and FICO scores tables summarize loans by year of origination ~~are also presented below~~. ~~The~~These tables reflect the amortized cost basis of the respective commercial and consumer loans. Accrued interest receivable ~~(within other assets)~~ is not reported ~~separately~~with ~~from~~ the loan’s amortized cost basis and is reported in other assets.

Commercial Loans — Risk Rating by Class(1) (dollars in millions)

Grade	Term Loans by Origination Year														Revolving Loans Converted
	Term Loans by Origination Year														Revolving Loans Converted
June 30, 2021	2021		2020		2019		2018		2017		2016 & Prior		Revolving Loans		to Term Loans		Total(1)
Grade	2021		2020		2019		2018		2017		2016 & Prior		Revolving Loans		to Term Loans		Total
September 30, 2021
Commercial Finance
Pass	$	34,~~346~~518.62	$	2,~~657~~426.67	$	21,~~119~~984.76	$	1,~~782~~414.65	$	~~637~~460.09	$	~~1,016~~943.45	$	2,~~335~~486.40	$	4460.6	$	1314,~~939~~295.90
Special Mention		2422.63		8969.54		~~203~~185.08		~~161~~146.17		43.10		~~117~~72.14		~~180~~147.67		—0.5		~~780~~647.08
Classified-accrual		3735.97		4171.82		~~199~~237.80		~~107~~132.07		~~175~~108.04		~~242~~184.75		~~162~~158.8		52.48		~~972~~931.41
Classified-non-accrual		~~0.4~~—		~~0.5~~—		81.03		4124.4		1110.28		~~123~~112.35		9276.83		—		~~277~~225.63
Total Commercial Finance		34,~~409~~576.52		2,~~789~~567.43		2,~~530~~408.57		21,~~092~~718.13		~~827~~583.31		1,~~499~~312.59		2,~~771~~868.68		5063.09		1516,~~969~~099.92
Real Estate Finance
Pass		~~278~~457.70		1,~~083~~112.9		1,~~867~~824.46		~~868~~666.09		~~407~~335.36		~~794~~797.56		42.68		—		5,~~304~~197.4
Special Mention		—		5787.41		~~196~~100.63		6379.5		9458.19		13.43		—		—		~~425~~339.01
Classified-accrual		—		0.3		~~325~~411.35		~~198~~240.17		8796.14		~~153~~82.10		—		—		~~763~~830.9
Classified-non-accrual		—		—		—		0.2		~~15.~~1.9		6461.03		—		—		7963.34
Total Real Estate Finance		~~278~~457.70		1,~~141~~200.63		2,~~389~~336.34		~~1,129~~987.83		~~603~~492.68		~~1,025~~954.02		42.68		—		6,~~572~~430.68
Business Capital
Pass		1,~~036~~437.19		1,~~384~~263.81		~~1,082~~957.71		~~557~~465.42		~~196~~154.25		5633.90		47.68		—		4,318.76
Special Mention		812.17		3025.82		4136.39		2318.97		1210.27		42.19		—		—		~~120~~107.41
Classified-accrual		1021.7		3233.3		5358.79		4431.24		1710.32		31.34		—		—		~~161~~156.59
Classified-non-accrual		02.96		109.75		2712.95		1110.45		62.39		32.08		—		—		6040.28
Total Business Capital		1,~~055~~474.89		1,~~458~~331.61		1,~~205~~065.64		~~636~~525.98		~~232~~178.03		6740.31		47.68		—		4,~~660~~623.84
Rail
Pass		—		—		0.76		—		—		6163.91		—		—		6263.67
Total Rail		—		—		0.76		—		—		6163.91		—		—		6263.67
Total Commercial Banking
Commercial Banking
Pass		46,~~661~~413.41		54,~~126~~802.37		54,~~070~~766.59		32,~~208~~546.06		~~1,240~~951.50		1,~~929~~837.72		2,~~344~~496.6		4460.6		23,~~625~~874.67
Special Mention		3235.70		~~177~~181.7		~~440~~323.90		~~248~~244.59		~~110~~72.46		~~134~~88.6		~~180~~147.67		—0.5		1,~~325~~094.40
Classified-accrual		4857.64		74104.48		~~578~~707.84		~~349~~404.38		~~279~~215.40		~~399~~267.19		~~162~~158.8		52.48		1,~~897~~918.89
Classified-non-accrual		12.36		119.25		3513.98		5335.01		3215.6		~~190~~176.36		9276.83		—		~~417~~329.15
Total Commercial Banking		46,~~744~~508.01		5,~~389~~098.67		65,~~126~~811.1		3,~~858~~231.84		1,~~662~~254.92		2,~~653~~370.73		2,~~780~~879.84		5063.09		27,~~265~~217.91
Consumer Banking - Consumer and Community Banking (2)
Pass		~~109~~166.81		~~321~~274.71		~~151~~145.3		9597.87		4647.60		9382.80		02.54		—		~~819~~814.56
Special Mention		—		—		10.10		3.2		4.4		3.7		—		—		21.43
Classified-accrual		—		177.34		27.53		2726.09		1512.30		2216.28		—		—		~~109~~90.34
Classified-non-accrual		—		—		1917.60		43.46		34.12		7.21		—		—		3431.39
Total Consumer Banking		~~109~~166.81		~~339~~281.05		~~208~~199.56		~~130~~131.4		6967.46		~~126~~109.96		02.54		—		~~984~~958.52
Commercial Loans
Pass		46,~~771~~579.2		5,~~448~~076.08		54,~~221~~912.82		32,~~303~~644.83		~~1,287~~998.10		21,~~023~~919.52		2,~~345~~499.10		4460.6		24,~~445~~689.13
Special Mention		3235.70		~~177~~181.7		~~451~~333.0		~~251~~248.71		~~114~~77.80		~~138~~92.3		~~180~~147.67		—0.5		1,~~346~~115.83
Classified-accrual		4857.64		91112.72		~~606~~734.37		~~376~~431.37		~~294~~227.70		~~421~~284.37		~~162~~158.8		52.48		2,~~007~~009.13
Classified-non-accrual		12.36		119.25		5530.58		5738.47		3519.78		~~197~~183.57		9276.83		—		~~451~~361.4
Total Commercial Loans	$	46,~~853~~674.82	$	5,~~728~~380.62	$	6,~~334~~010.67	$	3,~~989~~362.28	$	1,~~732~~321.38	$	2,~~780~~479.69	$	2,~~781~~881.38	$	5063.09	$	28,~~250~~175.43

^{(1), (2)}See footnotes below table on the next page.

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Grade	Term Loans by Origination Year														Revolving Loans Converted
December 31, 2020	2020		2019		2018		2017		2016		2015 & Prior		Revolving Loans		to Term Loans		Total(1)
Commercial Finance
Pass	$	4,819.9	$	2,132.5	$	2,000.1	$	678.0	$	181.1	$	745.6	$	3,329.4	$	61.1	$	13,947.7
Special Mention		81.2		206.4		210.8		18.4		30.8		119.9		313.3		2.8		983.6
Classified-accrual		82.4		161.7		49.8		169.2		107.2		183.1		314.2		5.6		1,073.2
Classified-non-accrual		0.5		9.0		53.9		9.6		22.1		60.7		83.6		—		239.4
Total Commercial Finance		4,984.0		2,509.6		2,314.6		875.2		341.2		1,109.3		4,040.5		69.5		16,243.9
Real Estate Finance
Pass		1,075.9		2,089.2		1,212.3		663.5		480.3		493.0		28.1		—		6,042.3
Special Mention		65.9		333.7		126.4		225.5		93.5		46.3		—		—		891.3
Classified-accrual		0.3		184.4		124.2		74.6		78.0		75.8		—		—		537.3
Classified-non-accrual		—		33.3		0.2		15.3		0.2		28.0		6.2		—		83.2
Total Real Estate Finance		1,142.1		2,640.6		1,463.1		978.9		652.0		643.1		34.3		—		7,554.1
Business Capital
Pass		1,678.9		1,371.4		809.5		299.3		106.3		15.6		14.4		0.8		4,296.2
Special Mention		29.6		67.2		42.4		32.4		12.3		0.3		—		—		184.2
Classified-accrual		34.3		80.8		71.5		25.9		11.2		0.9		—		—		224.6
Classified-non-accrual		8.0		33.0		17.1		10.9		2.8		1.0		—		—		72.8
Total Business Capital		1,750.8		1,552.4		940.5		368.5		132.6		17.8		14.4		0.8		4,777.8
Rail
Pass		—		0.8		—		0.1		3.1		56.7		—		—		60.7
Total Rail		—		0.8		—		0.1		3.1		56.7		—		—		60.7
Total Commercial Banking
Pass		7,574.7		5,593.9		4,021.9		1,640.9		770.8		1,310.9		3,371.9		61.9		24,346.9
Special Mention		176.7		607.3		379.6		276.3		136.6		166.5		313.3		2.8		2,059.1
Classified-accrual		117.0		426.9		245.5		269.7		196.4		259.8		314.2		5.6		1,835.1
Classified-non-accrual		8.5		75.3		71.2		35.8		25.1		89.7		89.8		—		395.4
Total Commercial Banking		7,876.9		6,703.4		4,718.2		2,222.7		1,128.9		1,826.9		4,089.2		70.3		28,636.5
Consumer Banking - Consumer and Community Banking (2)
Pass		507.6		157.1		104.5		62.3		50.0		67.3		0.1		—		948.9
Special Mention		—		13.1		4.3		2.8		2.6		0.9		—		—		23.7
Classified-accrual		21.0		19.3		17.0		11.0		13.8		17.6		0.3		—		100.0
Classified-non-accrual		—		11.8		3.0		3.2		1.0		0.8		—		—		19.8
Total Consumer Banking		528.6		201.3		128.8		79.3		67.4		86.6		0.4		—		1,092.4
Commercial Loans
Pass		8,082.3		5,751.0		4,126.4		1,703.2		820.8		1,378.2		3,372.0		61.9		25,295.8
Special Mention		176.7		620.4		383.9		279.1		139.2		167.4		313.3		2.8		2,082.8
Classified-accrual		138.0		446.2		262.5		280.7		210.2		277.4		314.5		5.6		1,935.1
Classified-non-accrual		8.5		87.1		74.2		39.0		26.1		90.5		89.8		—		415.2
Total Commercial Loans	$	8,405.5	$	6,904.7	$	4,847.0	$	2,302.0	$	1,196.3	$	1,913.5	$	4,089.6	$	70.3	$	29,728.9

Commercial Loans — Risk Rating by Class⁽¹⁾ (dollars in millions) (continued)

(1) Amortized cost excludes accrued interest receivable of $41.9 million and $48.6 million at June 30, 2021 and December 31, 2020, respectively that is included in other assets.

	Term Loans by Origination Year														Revolving Loans Converted
Grade	2020		2019		2018		2017		2016		2015 & Prior		Revolving Loans		to Term Loans		Total
December 31, 2020
Commercial Finance
Pass	$	4,819.9	$	2,132.5	$	2,000.1	$	678.0	$	181.1	$	745.6	$	3,329.4	$	61.1	$	13,947.7
Special Mention		81.2		206.4		210.8		18.4		30.8		119.9		313.3		2.8		983.6
Classified-accrual		82.4		161.7		49.8		169.2		107.2		183.1		314.2		5.6		1,073.2
Classified-non-accrual		0.5		9.0		53.9		9.6		22.1		60.7		83.6		—		239.4
Total Commercial Finance		4,984.0		2,509.6		2,314.6		875.2		341.2		1,109.3		4,040.5		69.5		16,243.9
Real Estate Finance
Pass		1,075.9		2,089.2		1,212.3		663.5		480.3		493.0		28.1		—		6,042.3
Special Mention		65.9		333.7		126.4		225.5		93.5		46.3		—		—		891.3
Classified-accrual		0.3		184.4		124.2		74.6		78.0		75.8		—		—		537.3
Classified-non-accrual		—		33.3		0.2		15.3		0.2		28.0		6.2		—		83.2
Total Real Estate Finance		1,142.1		2,640.6		1,463.1		978.9		652.0		643.1		34.3		—		7,554.1
Business Capital
Pass		1,678.9		1,371.4		809.5		299.3		106.3		15.6		14.4		0.8		4,296.2
Special Mention		29.6		67.2		42.4		32.4		12.3		0.3		—		—		184.2
Classified-accrual		34.3		80.8		71.5		25.9		11.2		0.9		—		—		224.6
Classified-non-accrual		8.0		33.0		17.1		10.9		2.8		1.0		—		—		72.8
Total Business Capital		1,750.8		1,552.4		940.5		368.5		132.6		17.8		14.4		0.8		4,777.8
Rail
Pass		—		0.8		—		0.1		3.1		56.7		—		—		60.7
Total Rail		—		0.8		—		0.1		3.1		56.7		—		—		60.7
Commercial Banking
Pass		7,574.7		5,593.9		4,021.9		1,640.9		770.8		1,310.9		3,371.9		61.9		24,346.9
Special Mention		176.7		607.3		379.6		276.3		136.6		166.5		313.3		2.8		2,059.1
Classified-accrual		117.0		426.9		245.5		269.7		196.4		259.8		314.2		5.6		1,835.1
Classified-non-accrual		8.5		75.3		71.2		35.8		25.1		89.7		89.8		—		395.4
Total Commercial Banking		7,876.9		6,703.4		4,718.2		2,222.7		1,128.9		1,826.9		4,089.2		70.3		28,636.5
Consumer Banking - Consumer and Community Banking ⁽²⁾
Pass		507.6		157.1		104.5		62.3		50.0		67.3		0.1		—		948.9
Special Mention		—		13.1		4.3		2.8		2.6		0.9		—		—		23.7
Classified-accrual		21.0		19.3		17.0		11.0		13.8		17.6		0.3		—		100.0
Classified-non-accrual		—		11.8		3.0		3.2		1.0		0.8		—		—		19.8
Total Consumer Banking		528.6		201.3		128.8		79.3		67.4		86.6		0.4		—		1,092.4
Commercial Loans
Pass		8,082.3		5,751.0		4,126.4		1,703.2		820.8		1,378.2		3,372.0		61.9		25,295.8
Special Mention		176.7		620.4		383.9		279.1		139.2		167.4		313.3		2.8		2,082.8
Classified-accrual		138.0		446.2		262.5		280.7		210.2		277.4		314.5		5.6		1,935.1
Classified-non-accrual		8.5		87.1		74.2		39.0		26.1		90.5		89.8		—		415.2
Total Commercial Loans	$	8,405.5	$	6,904.7	$	4,847.0	$	2,302.0	$	1,196.3	$	1,913.5	$	4,089.6	$	70.3	$	29,728.9

⁽¹⁾	Amortized cost excludes accrued interest receivable of $39.9 million and $48.6 million at September 30, 2021 and December 31, 2020, respectively, which was included in other assets.

⁽²⁾	Primarily SBA loans.

The following table provides a summary of the consumer loan LTV distribution for primarily single-family residential (“SFR”) mortgage loans. The average LTV was 55% and 58% for the total consumer loans included below at June 30, 2021 and December 31, 2020, respectively.

Table of Contents

CIT Group Inc. and Subsidiaries – Notes to Condensed Consolidated Financial Statements (Unaudited)

~~Consumer~~The ~~Loans~~following table provides a summary of the consumer loan LTV ~~Distribution~~distribution ~~(dollars~~for inprimarily ~~millions~~single-family residential (“SFR”) mortgage loans. The average LTV was 53% and 58% for the total consumer loans included below at September 30, 2021 and December 31, 2020, respectively.

	Term Loans Amortized Cost Basis by Origination Year														Revolving Loans Converted
LTV Range	2021		2020		2019		2018		2017		2016 & Prior		Revolving Loans		to Term Loans		Total (4)
June 30, 2021
Legacy Consumer Mortgages
Greater than 125%	$	—	$	—	$	—	$	—	$	—	$	19.7	$	—	$	0.2	$	19.9
101% – 125%		—		—		—		—		—		32.9		—		0.4		33.3
80% – 100%		—		—		—		—		—		96.2		—		2.0		98.2
Less than 80%		—		—		—		—		—		1,165.7		—		27.6		1,193.3
Government-guaranteed (1)		—		—		—		—		—		19.5		—		—		19.5
No LTV available (2)		—		—		—		—		—		0.1		—		1.4		1.5
Total Legacy Consumer Mortgages		—		—		—		—		—		1,334.1		—		31.6		1,365.7
Consumer and Community Banking
Greater than 125%		—		—		—		—		—		—		—		—		—
101% – 125%		—		—		—		—		—		—		—		—		—
80% – 100%		6.7		1.2		1.3		—		—		—		—		—		9.2
Less than 80%		803.7		1,086.5		560.9		273.5		329.1		860.8		31.4		—		3,945.9
Government-guaranteed (1)		—		10.3		26.2		12.1		53.8		13.6		—		—		116.0
No LTV available (2)		—		0.1		—		0.2		0.2		1.4		1.3		—		3.2
No LTV required (3)		0.5		2.0		1.0		0.9		0.6		13.4		2.3		—		20.7
Total Consumer and Community Banking		810.9		1,100.1		589.4		286.7		383.7		889.2		35.0		—		4,095.0
Total Consumer Loans	$	810.9	$	1,100.1	$	589.4	$	286.7	$	383.7	$	2,223.3	$	35.0	$	31.6	$	5,460.7
	Term Loans Amortized Cost Basis by Origination Year														Revolving Loans Converted
LTV Range	2020		2019		2018		2017		2016		2015 & Prior		Revolving Loans		to Term Loans		Total (4)
December 31, 2020
Legacy Consumer Mortgages
Greater than 125%	$	—	$	—	$	—	$	—	$	—	$	37.5	$	—	$	0.4	$	37.9
101% – 125%		—		—		—		—		—		60.5		—		1.1		61.6
80% – 100%		—		—		—		—		—		189.2		—		3.4		192.6
Less than 80%		—		—		—		—		—		1,344.3		—		34.7		1,379.0
Government-guaranteed (1)		—		—		—		—		—		20.8		—		—		20.8
No LTV available (2)		—		—		—		—		—		0.1		—		1.7		1.8
Total Legacy Consumer Mortgages		—		—		—		—		—		1,652.4		—		41.3		1,693.7
Consumer and Community Banking
Greater than 125%		—		—		—		—		—		—		—		—		—
101% – 125%		—		—		—		—		—		—		—		—		—
80% – 100%		21.3		17.1		3.5		—		—		1.7		2.4		—		46.0
Less than 80%		1,328.4		1,022.7		445.8		507.2		380.1		778.8		41.5		—		4,504.5
Government-guaranteed (1)		12.0		33.7		15.7		68.2		9.5		7.8		—		—		146.9
No LTV available (2)		—		—		0.2		0.2		0.2		0.7		1.3		—		2.6
No LTV required (3)		2.0		1.0		1.0		0.6		1.0		13.4		3.0		—		22.0
Total Consumer and Community Banking		1,363.7		1,074.5		466.2		576.2		390.8		802.4		48.2		—		4,722.0
Total Consumer Loans	$	1,363.7	$	1,074.5	$	466.2	$	576.2	$	390.8	$	2,454.8	$	48.2	$	41.3	$	6,415.7

Consumer Loans LTV Distribution⁽¹⁾ (dollars in millions)

(1) Represents loans with principal repayments insured by the FHA and U.S. Department of Veterans Affairs (“VA”).

	Term Loans Amortized Cost Basis by Origination Year														Revolving Loans Converted
LTV Range	2021		2020		2019		2018		2017		2016 & Prior		Revolving Loans		to Term Loans		Total
September 30, 2021
Legacy Consumer Mortgages
Greater than 125%	$	—	$	—	$	—	$	—	$	—	$	16.1	$	—	$	0.1	$	16.2
101% – 125%		—		—		—		—		—		22.6		—		0.3		22.9
80% – 100%		—		—		—		—		—		64.5		—		1.1		65.6
Less than 80%		—		—		—		—		—		1,051.1		—		25.5		1,076.6
Government-guaranteed ⁽²⁾		—		—		—		—		—		19.4		—		—		19.4
No LTV available ⁽³⁾		—		—		—		—		—		0.1		—		1.2		1.3
Total Legacy Consumer Mortgages		—		—		—		—		—		1,173.8		—		28.2		1,202.0
Consumer and Community Banking
Greater than 125%		—		—		—		—		—		—		—		—		—
101% – 125%		—		—		—		—		—		—		—		—		—
80% – 100%		11.5		—		0.9		0.8		—		0.8		—		—		14.0
Less than 80%		1,247.4		946.0		453.6		226.8		287.7		757.0		25.4		—		3,943.9
Government-guaranteed ⁽²⁾		—		10.0		22.5		10.3		46.6		13.0		—		—		102.4
No LTV available ⁽³⁾		—		0.1		0.1		0.1		0.1		1.0		1.3		—		2.7
No LTV required ⁽⁴⁾		0.8		2.2		1.0		0.8		0.7		13.0		2.2		—		20.7
Total Consumer and Community Banking		1,259.7		958.3		478.1		238.8		335.1		784.8		28.9		—		4,083.7
Total Consumer Loans	$	1,259.7	$	958.3	$	478.1	$	238.8	$	335.1	$	1,958.6	$	28.9	$	28.2	$	5,285.7

(2) Represents primarily junior lien loans for which LTV is not available.

	Term Loans Amortized Cost Basis by Origination Year														Revolving Loans Converted
LTV Range	2020		2019		2018		2017		2016		2015 & Prior		Revolving Loans		to Term Loans		Total
December 31, 2020
Legacy Consumer Mortgages
Greater than 125%	$	—	$	—	$	—	$	—	$	—	$	37.5	$	—	$	0.4	$	37.9
101% – 125%		—		—		—		—		—		60.5		—		1.1		61.6
80% – 100%		—		—		—		—		—		189.2		—		3.4		192.6
Less than 80%		—		—		—		—		—		1,344.3		—		34.7		1,379.0
Government-guaranteed ⁽²⁾		—		—		—		—		—		20.8		—		—		20.8
No LTV available ⁽³⁾		—		—		—		—		—		0.1		—		1.7		1.8
Total Legacy Consumer Mortgages		—		—		—		—		—		1,652.4		—		41.3		1,693.7
Consumer and Community Banking
Greater than 125%		—		—		—		—		—		—		—		—		—
101% – 125%		—		—		—		—		—		—		—		—		—
80% – 100%		21.3		17.1		3.5		—		—		1.7		2.4		—		46.0
Less than 80%		1,328.4		1,022.7		445.8		507.2		380.1		778.8		41.5		—		4,504.5
Government-guaranteed ⁽²⁾

Filing Compare · CIT GROUP INC