NEW YORK (
) -- CIT Group reported a profit of 49 cents a share in John Thain's first reporting period as CEO of the lender.
The profit was a big surprise relative to the Street estimate of a 25 cent loss for CIT Group in the first quarter.
CIT Group's profit in the first quarter was $97.3 million; the lender had total interest income of just above $1 billion.
CIT's credit-loss provision fell to $181 million in the first quarter, from $535.4 million a year earlier and $835.1 million in the fourth quarter.
"Our return to profitability further strengthens our financial position, which includes strong liquidity and a solid capital base. I am encouraged by the resiliency of our customer relationships, the receptivity of the capital markets, and the business opportunities ahead," Thain said in the earnings release.
With the surprise earnings beat, CIT Group shares were up 3% in early trading on Tuesday morning. CIT Group shares already have added $14 in value year-to-date, to a pre-market share price of $41.12 on Tuesday morning.
CIT Group's debt plate still weighs heavily on the lender, though. Thain said in a Tuesday morning conference call that CIT is "actively working" to lower finance costs.
CIT Group filed for bankruptcy protection in November 2009 when it was unable to refinance its debt. The bankruptcy eliminated $10 billion of CIT Group's debt burden.
CIT Group's $7.5 billion credit facility carries an interest rate of 9.5% on the majority of the credit, but a 13% interest rate on 40% of the debt.
CIT Group said it intends to prepay $1.5 billion of loans that cut into profitability.
On the same call, CIT Group's CFO, Joseph Leone, said that the almost $7 billion of first lien debt outstanding before the prepayment is equal to approximately $600 million in pretax earnings.
CIT Group's total assets declined by $2 billion as of March 31, to $58.1 billion, a decline of 23% versus the first quarter 2009 and down 3.2% compared to the end of 2009.
CIT Group's net charge-offs were $42 million, as most loans had been written down to fair value at the end of last year.
Total deposits were $4.9 billion, down from the 2009 year-end level.
-- Reported by Eric Rosenbaum in New York.
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