CIT Reports First Quarter Results; Significant Progress on Liquidity Plan

Business Wire, April 17, 2008

* Credit losses were down from last quarter and up over last year. Delinquencies and non-performing asset levels increased over both periods as the increases in our international operations offset the lower U.S. operation balances.

* Total new business volume declined from last year driven by lower U.S. volumes, as declines in Dell volume were partially offset by new vendor relationships.

Home Lending

* Total net revenues were down from last year reflecting lower asset balances and higher funding costs (principally on the 2007 third quarter securitization), but above last quarter. Adjustments to the valuation allowance for assets held for sale totaled $23 million for the quarter and related to $338 million (approximately $480 million unpaid principal balance) of manufactured home receivables that have been moved into assets held for investment at March 31, 2008.

* Home lending assets held for investment were $8.7 billion at quarter-end, reflecting unpaid principal balance of $9.4 billion and discounts of $0.7 billion. Reserves for credit losses were $400 million at March 31, 2008.

* Gross charge-offs for the quarter were $274 million, of which $206 million were applied to the existing valuation discount. The current quarter provision for loan losses was $218 million, which resulted in an increase to reserves of $150 million.

* Delinquencies and non-performing assets increased from last year and the prior quarter reflecting continued deterioration in the housing sector. The balance of Real Estate Owned declined from the prior quarter, as the level of sales exceeded new foreclosures.

* Liquidations of loans held for investment in the quarter totaled approximately $330 million, down from approximately $380 million in the prior quarter.

Consumer

* Total net revenues were down from last year and last quarter. Finance income was down as a result of loans to the students of the helicopter school which filed for bankruptcy being placed on non-accrual status and loans resetting at lower interest rates.

* Net charge-offs increased in both student loans and unsecured consumer loan portfolios compared with last quarter and the prior year quarter. Delinquencies were flat with last quarter, and higher than last year. Non-performing assets were up reflecting the student loans affected by the bankruptcy of a pilot training school.

* New business volume increased from last quarter, primarily reflecting additional disbursements on existing government-guaranteed student loan commitments, but was down from last year as we stopped funding certain student lending products in the fourth quarter of 2007.

* Reserves for credit losses were increased by approximately $120 million (to approximately $138 million at March 31, 2008), primarily due to the establishment of a reserve for loans to students of a pilot training school that filed bankruptcy during the quarter.

* We announced on April 3, 2008, that we ceased the origination of new government guaranteed student loans and expect to record a pre-tax charge of approximately $20 million related to closing the originations platform of the student lending business, $15 million of which will be recognized in the second quarter of 2008. We will continue to service the current portfolio and fund any remaining commitments, which are estimated to be approximately $200 million.