BUSINESS SEGMENT INFORMATION

Management's Policy in Identifying Reportable Segments

CIT's reportable segments are primarily based upon industry categories, geography, target markets and customers served, and, to a lesser extent, the core competencies relating to product origination, distribution methods, operations and servicing and the nature of their regulatory environment. This segment reporting is reflective of the Company's internal reporting structure and is consistent with the presentation of financial information to the chief operating decision maker.

Types of Products and Services

Commercial Banking consists of four divisions. Through its Commercial Finance, Real Estate Finance, and Business Capital divisions, Commercial Banking provides lending, leasing and other financial and advisory services, primarily to small and middle-market companies across select industries. Business Capital also provides factoring, receivables management products and secured financing to the retail supply chain. The fourth division, Rail, provides equipment leasing and secured financing to the rail industry. Revenue is generated from interest earned on loans, rents on equipment leased, fees and other revenue from lending and leasing activities, capital markets transactions and banking services, commissions earned on factoring and related activities, and to a lesser extent, interest and dividends on investments. Revenue is also generated from gains on asset sales.

Consumer Banking includes Other Consumer Banking and Legacy Consumer Mortgages.

Other Consumer Banking offers mortgage loans, and deposits to its consumer customers. The division offers jumbo residential mortgage loans and conforming residential mortgage loans, primarily in Southern California. Mortgage loans are originated directly through leads generated from the retail branch network, the commercial business units, as well as indirectly through institutional intermediaries. Consumer lending includes product specialists, internal sales support and origination processing, structuring and closing. Retail banking is the primary deposit gathering business of CIT Bank and operates through 70 retail branches in Southern California and an online direct channel. We offer a broad range of deposit and lending products to meet the needs of our customers, including: checking, money market, savings, certificates of deposit, residential mortgage loans, and fiduciary services. The division also originates qualified Small Business Administration ("SBA") 504 loans (generally, the financing provides growing small businesses with long-term, fixed-rate financing for major fixed assets, such as land and building) and 7(a) (generally, for purchase/refinance of owner occupied commercial real estate, working capital, acquisition of inventory, machinery, equipment, furniture, and fixtures, the refinance of outstanding debt subject to any program guidelines, and acquisition of businesses, including partnership buyouts).

LCM holds the reverse mortgage and SFR mortgage portfolios acquired in the OneWest Transaction. Certain of these assets and related receivables include loss sharing arrangements with the FDIC, which will continue to reimburse CIT Bank, N.A. for certain losses realized due to foreclosure, short-sale, charge-offs or a restructuring of a single family residential mortgage loan pursuant to an agreed upon loan modification framework.

NSP includes businesses and portfolios that we no longer consider strategic. The China portfolio was predominately the remaining operation at December 31, 2017.

Corporate and Other

Certain items are not allocated to operating segments and are included in Corporate & Other. Some of the more significant items include interest income on investment securities, a portion of interest expense, primarily related to corporate liquidity costs (interest expense), mark-to-market adjustments on non-qualifying derivatives (other non-interest income), restructuring charges for severance and facilities exit activities (operating expenses), certain intangible asset amortization expenses (other expenses) and loss on debt extinguishments.

Segment Profit and Assets

The following table presents segment data. The 2015 include results of OneWest Bank's operations for approximately five months compared to a full year in 2016.

Segment Pre-tax Income (Loss) (dollars in millions)



For the year ended December 31, 2017	Commercial Banking			Consumer Banking			Non-Strategic Portfolios			Corporate & Other			Total CIT
Interest income	$	1,248.0		$	378.1		$	22.9		$	186.6		$	1,835.6
Interest expense (benefit)	517.7			(51.8		)	15.2			236.6			717.7
Provision for credit losses	88.7			25.9			—			—			114.6
Rental income on operating leases	1,007.4			—			—			—			1,007.4
Other non-interest income	291.0			4.1			3.1			66.0			364.2
Depreciation on operating lease equipment	296.3			—			—			—			296.3
Maintenance and other operating lease expenses	222.9			—			—			—			222.9
Goodwill impairment	255.6			—			—			—			255.6
Operating expenses / loss on debt extinguishment	691.7			401.5			12.7			302.6			1,408.5
Income (loss) from continuing operations before provision (benefit) for income taxes	$	473.5		$	6.6		$	(1.9	)	$	(286.6	)	$	191.6
Select Period End Balances
Loans	$	23,159.3		$	5,954.6		$	—		$	—		$	29,113.9
Credit balances of factoring clients	(1,468.6		)	—			—			—			(1,468.6		)
Assets held for sale	1,334.2			865.6			63.3			—			2,263.1
Operating lease equipment, net	6,738.9			—			—			—			6,738.9
For the year ended December 31, 2016
Interest income	$	1,287.9		$	420.8		$	80.8		$	122.0		$	1,911.5
Interest expense	519.1			10.2			47.2			176.7			753.2
Provision for credit losses	183.1			11.7			(0.1		)	—			194.7
Rental income on operating leases	1,020.0			—			11.6			—			1,031.6
Other non-interest income	293.8			40.0			52.1			(235.3		)	150.6
Depreciation on operating lease equipment	261.1			—			—			—			261.1
Maintenance and other operating lease expenses	213.6			—			—			—			213.6
Goodwill impairment	34.8			319.4			—			—			354.2
Operating expenses / loss on debt extinguishment	761.6			380.9			42.2			111.3			1,296.0
Income (loss) from continuing operations before provision (benefit) for income taxes	$	628.4		$	(261.4	)	$	55.2		$	(401.3	)	$	20.9
Select Period End Balances
Loans	$	22,562.3		$	6,973.6		$	—		$	—		$	29,535.9
Credit balances of factoring clients	(1,292.0		)	—			—			—			(1,292.0		)
Assets held for sale	357.7			68.2			210.1			—			636.0
Operating lease equipment, net	7,486.1			—			—			—			7,486.1



For the Year Ended December 31, 2015
Interest income	$	1,029.1		$	176.1		$	184.8		$	55.2		$	1,445.2
Interest expense	481.4			24.9			121.4			103.7			731.4
Provision for credit losses	143.7			8.7			6.2			—			158.6
Rental income on operating leases	981.4			—			36.7			—			1,018.1
Other non-interest income	302.6			5.4			(96.8		)	(61.6		)	149.6
Depreciation on operating lease equipment	218.3			—			10.9			—			229.2
Maintenance and other operating lease costs	185.1			—			—			—			185.1
Operating expenses / loss on debt extinguishment	727.4			158.4			123.9			112.9			1,122.6
Income (loss) from continuing operations before provision (benefit) for income taxes	$	557.2		$	(10.5	)	$	(137.7	)	$	(223.0	)	$	186.0
Select Period End Balances
Loans	$	23,332.4		$	7,186.3		$	—		$	—		$	30,518.7
Credit balances of factoring clients	(1,344.0		)	—			—			—			(1,344.0		)
Assets held for sale	435.1			45.1			1,577.5			—			2,057.7
Operating lease equipment, net	6,851.7			—			—			—			6,851.7

Geographic Information

The following table presents information by major geographic region based upon the location of the Company's legal entities.

Geographic Region (dollars in millions)



		Total Assets⁽¹⁾		Total Revenue from continuing operations		Income (Loss) from continuing operations before provision (benefit) for income taxes			Income (loss) from continuing operations before attribution of noncontrolling interests
U.S.	2017	$	46,825.9	$	3,046.1	$	251.9		$	287.3
	2016	53,252.9		2,755.6		157.5			99.3
	2015	55,491.1		2,084.5		227.6			876.7
Europe	2017	1,424.0		119.6		(34.5		)	(19.8		)
	2016	8,575.7		139.7		(189.2		)	(246.8		)
	2015	8,351.8		125.0		(227.6		)	(304.6		)
Other foreign	2017	1,028.8		41.5		(25.8		)	(8.1		)
	2016	2,341.6		198.4		52.6			(35.1		)
	2015	3,549.0		403.4		186.0			151.9
Total consolidated	2017	49,278.7		3,207.2		191.6			259.4
	2016	64,170.2		3,093.7		20.9			(182.6		)
	2015	67,391.9		2,612.9		186.0			724.0


⁽¹⁾	Includes Assets of discontinued operation of $501.3 million at December 31, 2017, $13,220.7 million at December 31, 2016 and $13,059.6 million at December 31, 2015.