CIT Reports First Quarter Results; Significant Progress on Liquidity Plan

Business Wire, April 17, 2008

* Net charge-offs as a percentage of average finance receivables were 0.63% for the commercial businesses, up from 0.43% last quarter and up from 0.16% a year ago reflecting lower recoveries in Transportation Finance and a $22 million charge-off of an energy customer that entered bankruptcy during the quarter.

* 60 day owned delinquencies for the commercial businesses were 1.70% of finance receivables, up from 1.47% last quarter, primarily due to the addition of several accounts within Corporate Finance.

* Non-performing assets for the commercial businesses were 1.68%, up from 1.15% from last quarter reflecting the addition of two large accounts in Corporate Finance and up from 0.78% last year, reflecting increases in Corporate Finance and Vendor Finance. All non-performing assets are reserved to expected realizable value based on underlying collateral and cash flows.

Credit Quality - Home Lending

* The provision for credit losses totaled $218 million for the quarter, which resulted from a $150 million increase in reserves for credit losses for home loans held for investment ("HFI"), now totaling $400 million. The higher reserves reflects an increase to the loss severity assumptions and higher past due loans, reflecting deterioration in the home lending markets during the quarter.

* Gross charge-offs in the HFI home lending portfolio were $274 million of which approximately $206 million were applied against the previously established valuation discount and the balance reflected in the provision for credit losses.

* The remaining discount on HFI home loans was approximately $410 million at March 31, 2008, including amounts related to the manufactured housing portfolio transferred to held for investment during the quarter. Reserves and remaining discount totaled approximately $1.1 billion on outstanding loans (unpaid contractual principal balance) of $9.4 billion.

Credit Quality - Consumer Segment

* Net charge-offs in the Consumer segment were $30.8 million, up from $24.4 million last quarter as higher charge-offs in the private student loan portfolio were partially offset by slightly lower charge-offs on other consumer loans.

* 60 day owned delinquencies were 4.90%, essentially flat with 4.93% last quarter. Non-performing assets increased to $87 million from $8 million in the prior quarter reflecting the student loans affected by the bankruptcy of a pilot training school.

* Reserves for credit losses for our private student lending portfolio were increased by approximately $120 million (to approximately $138 million at March 31, 2008), primarily due to the previously discussed establishment of a reserve for loans to students of a pilot training school. There are no other large single-school exposures within the private student loan portfolio.

Expenses

* Salaries and general operating expenses were down $59.0 million from last quarter and $37.8 million from a year ago, reflecting lower employee headcount. The decrease is reflected across most expense categories, primarily lower salary and incentive compensation accruals.