Safe and Sound

CIT Bank, National Association

Pasadena, CA
5
Star Rating
Started in 2009, CIT Bank, National Association is an FDIC-insured bank based in Pasadena, CA. The bank holds equity of $5.36 billion on assets of $41.18 billion, according to June 30, 2017, regulatory filings.

Thanks to the work of 3,699 full-time employees in 71 offices in CA, the bank currently holds loans and leases worth $26.86 billion, $12.90 billion of which are for real estate. The bank currently holds $31.91 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, CIT Bank, National Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank did on the three important criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of a bank's financial resilience. It works as a cushion against losses and as protection for depositors when a bank is experiencing financial instability. When it comes to safety and soundness, the higher the capital, the better.
On our test to measure the adequacy of a bank's capital, CIT Bank, National Association scored 14 out of a possible 30 points, better than the national average of 13.38.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. CIT Bank, National Association's Tier 1 capital ratio was 14.17 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial downturns.

Overall, CIT Bank, National Association held equity amounting to 13.01 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

Having extensive holdings of these types of assets suggests a bank may have to use capital to absorb losses, decreasing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, resulting in reduced earnings and potentially more risk of a future failure.

CIT Bank, National Association did better than the national average of 37.62 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of June 30, 2017, 1.88 percent of CIT Bank, National Association's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . The size of that reserve can be a helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on CIT Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Conversely, losses diminish a bank's ability to do those things.

CIT Bank, National Association scored 18 out of a possible 30 on Bankrate's test of earnings, better than the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for CIT Bank, National Association was 9.81 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $259.0 million on total equity of $5.36 billion. The bank experienced an annualized return on average assets, or ROA, of 1.24 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.