CapitalSource Reports Fourth Quarter and Full Year 2009 Results
CHEVY CHASE, Md., Feb. 25 /PRNewswire-FirstCall/ --
- Pretax Profitability and Significant Margin Expansion at CapitalSource Bank in the Quarter
- Healthcare Net Lease Asset Sales and HUD Financing Enhance Parent Liquidity
- $70 Million Net Increase in Allowance for Loan Losses in the Quarter
- Cumulative Loss Assumptions in Legacy Portfolio Reconfirmed
- Mortgage Related Receivables Sold
- 2010 Quarterly Loan Originations Projected at $250-$350 Million
CapitalSource Inc. (NYSE: CSE) today announced financial results for the fourth quarter and full year 2009. Net loss for the quarter was $244 million, or $0.76 per diluted share, compared to a net loss of $274 million, or $0.87 per diluted share in the prior quarter and a net loss of $301 million, or $1.08 per diluted share in the fourth quarter of 2008. Net loss for the full year 2009 was $869 million or $2.84 per diluted share, compared to a net loss of $220 million or $0.88 per diluted share for the prior year.
“2009 was a transition year for CapitalSource, during which we successfully addressed several significant challenges and opportunities. Over the past four quarters we substantially strengthened our balance sheet by selling some of our healthcare net lease assets, paying down and extending our credit facilities and redeeming a convertible debt issue. We also completed our first full year of operations at CapitalSource Bank, while taking several steps to improve its profitability,” said John K. Delaney, CapitalSource Executive Chairman. “Our results this quarter were largely driven by the reserves added to our allowance for loan losses, principally related to the legacy loan portfolio. Those reserves reflect, from an accounting perspective, the inherent loss content in that portfolio we have spoken about for the past few quarters and in that regard they are consistent with our expectations. As we look ahead to 2010, however, we believe we are nearing the point where our provisions will return to pre-crisis levels which will lead to consolidated profitability," added Delaney.
“Profitability fundamentals improved at CapitalSource Bank throughout 2009. We saw significant margin expansion this quarter, as our cost of deposits declined and lower yielding assets were redeployed into new loans made at attractive spreads," commented Steven A. Museles, CapitalSource Co-CEO. “A pretax profit in the fourth quarter, despite a $49 million loan loss provision, is a strong indication of growing profitability at CapitalSource Bank. During 2010 we are expecting some additional margin expansion and the decline of loan loss provisions related to the legacy loans purchased from the Parent Company in connection with the Bank's initial formation in 2008," added Museles.
“After a thorough review of our existing lending platforms, current market conditions and the competitive landscape, we are confident of our ability to increase new funded loan production in 2010 to a range of $250-$350 million per quarter, 25-50% higher than our 2009 production levels," commented James J. Pieczynski, CapitalSource Co-CEO. “The CapitalSource national asset generation platform has been central to our strength since the Company was founded and remains the heart of our story going forward. We will focus our efforts this year on historic areas of strength such as healthcare, lender finance and security while significantly expanding our presence in equipment finance," added Pieczynski.
“The closing of step 1 of the sale of our healthcare net lease assets to Omega Healthcare Investors, Inc. and the closing of HUD financing on certain other healthcare net lease assets added meaningfully to liquidity and facilitated commitment reduction and debt repayment on our syndicated bank facility of $225 million in the quarter. On the credit front, the net increase in reserves in the fourth quarter is consistent with our long-term view of the cumulative losses we expect from the legacy portfolio," noted Donald F. Cole, CapitalSource CFO. “We remain comfortable with our cumulative loss assumptions and expect to reach an inflection point during 2010, when reserving for future losses in our legacy loan portfolio is largely completed," concluded Cole.
Revised Metrics
- In a continued effort to conform more to a banking industry presentation, certain amounts in financial statements from prior periods have been reclassified to conform to the current period presentation. The reclassifications impact interest, fee and other income in our consolidated statements of operations, and also have a related impact on certain operating metrics. In addition, all applicable ratios have been recast for prior periods to reflect metrics based on consolidated continuing operations.
CapitalSource Bank Segment
- Commercial loans and loans held for sale increased $74 million from the prior quarter to $3.1 billion. There were approximately $299 million in new loan commitments closed at CapitalSource Bank during the quarter, of which $213 million funded at closing and the remaining $86 million are unfunded commitments. CapitalSource Bank closed $1.1 billion in new loan commitments during 2009, of which $806 million funded at closing. The yield on the commercial loan portfolio was 7.68% for the quarter, an increase of 28 basis points from the prior quarter.
- The “A” Participation Interest, net was $531 million at the end of the quarter, reflecting principal repayments of $193 million, partially offset by discount accretion of $9 million. Our position remains significantly over-collateralized by the total underlying collateral pool. At the end of the quarter, the “A” Participation Interest represented 16% of the total $3.3 billion in underlying loan and property balances, a decrease from 20% at the end of the prior quarter. Under the “A” Participation Interest structure, we receive 70% of all principal collections on the underlying loans and properties. Management expects the “A” Participation Interest to be fully repaid in 2010.
- Cash and cash equivalents, including restricted cash totaled $822 million at the end of the quarter, an increase from $801 million at the end of the prior quarter.
- Investment securities, available-for-sale, which consist primarily of investments in Agency callable notes and Agency and Non-Agency MBS, were $902 million at the end of the quarter, an increase from $701 million at the end of the prior quarter.
- Investment securities, held-to-maturity decreased $8 million during the quarter to $242 million due to principal payments on CMBS, partially offset by discount accretion. CapitalSource Bank focuses on the most senior AAA-rated CMBS tranches with substantial credit support, including cash defeasance.
- Deposits were $4.5 billion at the end of the quarter, an increase of $93 million, or 2%, from the prior quarter. The average rate on new and renewed certificates of deposit was 1.44% for the quarter, compared to 1.47% for the prior quarter. At quarter end, the weighted average interest rate on deposits was 1.56%, a decrease of 29 basis points from the prior quarter end and a decrease of 186 basis points from the prior year end.
- Interest income was $84 million for the quarter, an increase of $7 million from the prior quarter, primarily due to the increased yield on loans and higher discount accretion on the “A” Participation Interest.
- Net finance margin for the quarter was 4.66% compared to 3.94% in the prior quarter, primarily due to higher asset yields and lower cost of funds.
- Yield on average interest earning assets was 6.04% for the quarter, an increase of 42 basis points from the prior quarter primarily due to higher yields on the commercial loan portfolio and higher discount accretion on the “A” Participation Interest. Yield on average interest earnings assets, excluding the “A” Participation Interest, increased to 5.84% for the quarter from 5.68% in the prior quarter.
- Cost of interest-bearing liabilities, which includes deposits and FHLB borrowings, was 1.67% for the quarter compared to 2.01% for the prior quarter. The average cost of deposits was 1.66% for the quarter, a decrease of 36 basis points from the prior quarter due to re-pricing higher rate maturing certificates of deposit and continued reductions in deposit rates offered. The average cost of FHLB borrowings was 1.79% during the quarter, compared to 1.84% for the prior quarter.
- Non-interest income was $9 million for the quarter, an increase of $2 million from the prior quarter. Non-interest income consisted of $6 million loan servicing fee income earned by servicing loans for the Parent Company and $3 million of gain on sales of loans. The increase from the prior quarter was primarily due to a gain from sales of loans, partially offset by a decrease in loan servicing fee income.
- Total operating expenses were $25 million which was consistent with the prior quarter. During the current quarter, $5 million of loan sourcing expense was paid to the Parent Company consistent with the prior quarter. Operating expenses as a percentage of average total assets were 1.77%, a decrease of 2 basis points from the prior quarter.
- Total Risk-Based Capital Ratio was 17.47% at the end of the quarter compared to 16.75% at the end of the prior quarter.
- Tier 1 Leverage Ratio at the end of the quarter was 12.80% compared to 12.52% at the end of the prior quarter.
- Tangible Common Equity to Tangible Assets at the end of the quarter was 12.63% compared to 12.71% at the end of the prior quarter.
Other Commercial Finance Segment
- Total commercial loans and loans held for sale, were $5.2 billion at the end of the quarter, a decrease from $5.7 billion at the end of the prior quarter, primarily due to loan repayments, loans charged-off and loan foreclosures. Loan yield was 7.37% for the quarter, a decrease of 37 basis points from the prior quarter.
- Cash and cash equivalents were $416 million at the end of the quarter, an increase from $302 million at the end of the prior quarter, primarily due to the sale of 82 healthcare net lease facilities to Omega Healthcare Investors, Inc. (“Omega”) and another buyer coupled with the closing of HUD mortgages on properties to be sold in step 2 of the transaction with Omega.
- Restricted cash was $107 million at the end of the quarter, a decrease from $137 million at the end of the prior quarter.
- Interest income was $118 million for the quarter, a decrease of $17 million from the prior quarter, primarily due to the decrease in commercial loans, and an increase in non-accrual loans. Excluding the legacy residential mortgage investment portfolio, interest income was $103 million for the quarter compared to $117 million in the prior quarter.
- Yield on average interest-earning assets was 6.73% for the quarter, a decrease of 17 basis points from the prior quarter, primarily due to an increase in the loans on non-accrual and the sale of the mortgage related receivables. Excluding the legacy residential mortgage investment portfolio, the yield on average interest-earnings assets was 7.22% for the quarter compared to 7.56% in the prior quarter.
- Cost of funds was 4.78% for the quarter, an increase of 21 basis points from the prior quarter primarily due to the acceleration of deferred finance fees as credit facility balances were repaid. Borrowing spread to average one-month LIBOR increased 24 basis points to 4.54%.
- Total operating expenses were $58 million in the quarter, an increase from $49 million in the prior quarter primarily due to an increase in compensation and benefits for severance payments related to management changes and loan related credit and workout expenses, partially offset by a decrease in other professional fees. Operating expenses as a percentage of average total assets were 3.05% for the quarter, an increase of 76 basis points from the prior quarter.
Healthcare Net Lease Segment
- Discontinued Operations On November 17, 2009, we announced the execution of an agreement to sell certain direct real estate investments (143 properties) to Omega and on November 30, 2009 we closed on the sale of 37 other properties included in our Healthcare Net Lease segment. On December 22, 2009, we closed on the 40 properties sold to Omega (“step 1”), and we anticipate closing on the sale of a second group of 40 properties to Omega during 2010 (“step 2”). Accordingly, the financial position and results of operations of these direct real estate investments sold or expected to be sold have been removed from the line items and separately presented as “discontinued operations” in the financial statements. Our 63 properties that are subject to Omega's option to purchase prior to December 31, 2011 ("step 3") are not included in discontinued operations and are still shown in continuing operations.
- Direct real estate investments, net were $336 million at the end of the quarter, a decrease of $3 million from the prior quarter, primarily due to depreciation.
- Operating lease income was $9 million, a decrease of $0.1 million from the prior quarter.
Consolidated Metrics
Assets
- Total commercial lending assets (including loans, loans held for sale and the “A” Participation Interest) were $8.9 billion at the end of the quarter compared to $9.4 billion at the end of the prior quarter. The decrease was primarily due to the net reduction in the “A” Participation Interest, loan foreclosures, loan repayments and charge-offs, partially offset by new loans closed.
Credit
- Loans on non-accrual were $1.1 billion at the end of the quarter, an increase from $994 million at the end of the prior quarter. As a percentage of commercial lending assets, non-accruals were 12.06% compared to 10.58% at the end of the prior quarter. Of the non-accruals at the Parent Company, $468 million were current. Non-accruals at CapitalSource Bank were $172 million at the end of the quarter, a decrease from $184 million at the end of the prior quarter. As a percentage of core loans in CapitalSource Bank ("core loans" excludes the “A” Participation Interest), non-accruals were 5.60%. Of the non-accruals at the Bank, $61 million were current.
- Loans 30-89 days delinquent were $276 million at the end of the quarter, an increase from $132 million at the end of the prior quarter, primarily due to troubled commercial real estate loans that have matured and remain delinquent. As a percentage of commercial lending assets, loans 30-89 days delinquent were 3.12% compared to 1.40% at the end of the prior quarter. As a percentage of core loans in CapitalSource Bank, loans 30-89 days delinquent were 0.92%. CapitalSource Bank had four loans totaling $28 million that were 30-89 days delinquent at the end of the quarter compared to three loans totaling $38 million that were 30-89 days delinquent at the end of the prior quarter.
- Loans 90 or more days delinquent were $425 million at the end of the quarter, an increase from $396 million at the end of the prior quarter. As a percentage of commercial lending assets, loans 90 or more days delinquent were 4.80% compared to 4.21% at the end of the prior quarter. As a percentage of core loans in CapitalSource Bank, loans 90 or more days delinquent were 3.34%. CapitalSource Bank had five loans totaling $103 million that were 90 or more days delinquent at the end of the quarter compared to three loans totaling $13 million at the end of the prior quarter.
- Net commercial charge-offs were $191 million, an increase of $56 million from the prior quarter. As a percentage of average commercial lending assets, net commercial charge-offs for the 12 months ended December 31, 2009, were 6.16%. CapitalSource Bank had $24 million in charge-offs in the quarter compared to $13 million in the prior quarter. As a percentage of average core loans in CapitalSource Bank, net charge-offs for the 12 months ended December 31, 2009 were 3.98%.
- Provision for commercial loan losses was $261 million for the quarter, an increase of $57 million from the prior quarter. The provision for commercial loan losses at CapitalSource Bank was $49 million for the quarter, compared to $48 million in the prior quarter.
- Allowance for loan losses was $587 million at the end of the quarter, a net increase of $70 million from the prior quarter. As a percentage of commercial lending assets, the allowance for loan losses was 6.63% compared to 5.51% at the end of the prior quarter. The allowance for loan losses at CapitalSource Bank increased from $127 million at the end of the prior quarter to $153 million at the end of the current quarter, or 4.96% of core loans.
Other Income/(Expense)
- Loss on investments, net was $1 million for the quarter primarily due to write-downs on certain cost-based investments, partially offset by dividends received. Loss on investments was $8 million in the prior quarter.
- Loss on derivatives, net was $1 million for the quarter primarily due to net interest expense and net realized losses, partially offset by unrealized gains. Loss on derivatives, net was $10 million in the prior quarter.
- Gain on extinguishment of debt was $1 million for the quarter compared to $11 million in the prior quarter.
- Other expense, net was $8 million for the quarter primarily due to net losses related to the sale of certain healthcare facilities and REO, partially offset by gains related to the sale of other healthcare facilities and a gain on the sale of the mortgage related receivables. Other expense, net was $4 million in the prior quarter.
Income Taxes
- The valuation allowance related to our deferred tax assets increased to approximately $362 million at quarter end compared to $286 million at the end of the prior quarter due to losses reported in the quarter. The net deferred tax asset at quarter end, after subtracting the valuation allowance, was $107 million. The valuation allowance is a non-cash accounting charge that will exist until there is sufficient positive evidence to support its reduction or reversal. Such evidence would include a period of positive pre-tax income for those entities for which an allowance has been established.
- Income tax expense in the quarter of $5 million was primarily the result of CapitalSource Bank producing taxable income for the year and the establishment of a valuation allowance at a subsidiary that incurred operating losses.
Book Value
- Book Value per share was $6.76 at the end of the quarter, a decrease from $7.51 at the end of the prior quarter, primarily due to the current quarter loss. Total shareholders’ equity was $2.2 billion at the end of the quarter, a decrease of $244 million from the prior quarter primarily due to the current quarter loss and the dividend payment of $0.01 per share made to shareholders during the quarter.
- Tangible Book Value per share at the end of the quarter was $6.18 compared to $6.93 at the end of prior quarter, primarily due to the current quarter loss. Tangible equity was $2.0 billion at the end of the quarter, a decrease of $243 million from the prior quarter.
Share Count
- Average diluted shares outstanding were 320.1 million shares for the quarter, compared to 315.6 million shares for the prior quarter, primarily due to the full quarter effect of the equity issuance completed in July. Total outstanding shares at December 31, 2009 were 323.0 million.
Dividends
- A quarterly cash dividend of $0.01 per common share was paid on December 31, 2009 to common shareholders of record on December 16, 2009.
A conference call to discuss the results will be hosted on Thursday, February 25, 2010 at 8:30 a.m. EST. Analysts and investors interested in participating are invited to call (866) 843-0890 from within the United States or (412) 317-9250 from outside the United States, with passcode 8576523. A webcast of the call will be available on the Investor Relations section of the CapitalSource web site at http://www.capitalsource.com.
A telephonic replay will also be available from approximately 12 noon EST February 25, 2010 through March 4, 2010. Please call (877) 344-7529 from the United States or (412) 317-0088 from outside the United States with passcode 437836. An audio replay will also be available on the Investor Relations section of the CapitalSource website.
A transcript of the earnings conference call will also be posted to the Investor Relations section of the CapitalSource website on February 25, 2010.
A slide presentation that may be referred to on the conference call will be posted to the Investor Relations homepage of the CapitalSource website prior to the call at the following address: http://www.capitalsource.com/investor_relations.
About CapitalSource
CapitalSource Inc. (NYSE: CSE) is a commercial lender that provides financial products to middle market businesses and offers depository products and services in southern and central California through its wholly owned subsidiary CapitalSource Bank. As of December 31, 2009, CapitalSource had total commercial assets of $9.2 billion and $4.5 billion in deposits. The Company is headquartered in Chevy Chase, MD. Visit www.capitalsource.com for more information.
Forward Looking Statements
This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including certain plans, expectations, goals, and projections and including statements about growing our business and our assets, increased loan production levels and focus areas, expanding loan product lines, managing our legacy portfolio, the impact of the U.S. economy on our business, our portfolio's credit trends, expected losses, costs and provisions and their impact on our financial results, our delinquent, impaired and non-accrual loans and troubled debt restructurings as well as our charge offs, reserves and delinquencies, our expectations regarding future credit performance, charge-offs, loss assumptions and provisions for loan losses, our expectations regarding profitability and margins, our outlook, projections and strategies, including regarding asset origination and credit, the performance, security and payment of the “A” Participation Interest, and our valuation allowance against a portion of our deferred tax assets, our Omega transaction with respect to our healthcare net lease portfolio, timing and implications of future closings under this transaction and our anticipated cash proceeds therefrom, and our discontinued operations all of which are subject to numerous assumptions, risks, and uncertainties. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words "anticipate," "assume," "intend," "believe," "expect," "estimate," "plan," “goal,” "will," “outlook,” “continue,” "look forward," “should,” and similar expressions are generally intended to identify forward-looking statements. All forward-looking statements (including statements regarding future financial and operating results and future transactions and their results) involve risks, uncertainties and contingencies, many of which are beyond our control which may cause actual results, performance, or achievements to differ materially from anticipated results, performance or achievements. Actual results could differ materially from those contained or implied by such statements for a variety of factors, including without limitation: changes in economic or market conditions or investment or lending opportunities; continued or worsening recession in the overall economy or disruptions in credit and other markets; movements in interest rates and lending spreads; continued or worsening credit losses, charge-offs, reserves and delinquencies; our ability to successfully and cost effectively operate our business, including CapitalSource Bank; our ability to successfully grow deposits and commercial loan assets or deploy capital in favorable lending transactions; competitive and other market pressures on product pricing and services; success and timing of other business strategies; the nature, extent, and timing of governmental actions and reforms; changes in tax laws or regulations affecting our business; the Omega transactions involving our net lease portfolio may not be completed on the proposed terms and schedule or at all; the ability of the parties to satisfy the various conditions to the completion of the proposed transactions; obtaining government approval of the proposed transactions, if applicable; potential adjustments to the form and amount of consideration payable in the planned transactions; our ability to generate the expected cash proceeds from those transactions; and other factors described in CapitalSource's 2008 Annual Report on Form 10-K and documents subsequently filed by CapitalSource with the Securities and Exchange Commission. All forward-looking statements included in this news release are based on information available at the time of the release. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
CapitalSource Inc.
Consolidated Balance Sheets
($ in thousands)
December 31, December 31,
2009 2008
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $1,172,785 $1,335,916
Restricted cash 172,765 404,019
Investment securities:
Available-for-sale, at fair value 960,591 679,551
Held-to-maturity, at amortized cost 242,078 14,389
------- ------
Total investment securities 1,202,669 693,940
Mortgage-backed securities pledged, trading - 1,489,291
Mortgage-related receivables, net - 1,801,535
Commercial real estate “A” participation
interest, net 530,560 1,396,611
Loans:
Loans held for sale 670 8,543
Loans held for investment 8,321,160 9,447,249
Less deferred loan fees and discounts (146,329) (174,317)
Less allowance for loan losses (586,696) (423,844)
-------- --------
Loans held for investment, net 7,588,135 8,849,088
--------- ---------
Total loans 7,588,805 8,857,631
Interest receivable 33,949 67,018
Direct real estate investments, net 336,007 346,167
Other investments 96,517 127,746
Goodwill 173,135 173,135
Other assets 679,209 1,040,157
Assets of discontinued operations, held for
sale 260,541 686,466
------- -------
Total assets $12,246,942 $18,419,632
=========== ===========
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits $4,483,879 $5,043,695
Repurchase agreements - 1,595,750
Credit facilities 542,781 1,445,062
Term debt 2,956,536 5,338,456
Other borrowings 1,466,834 1,493,243
Other liabilities 390,504 542,533
Liabilities of discontinued operations 223,149 130,173
------- -------
Total liabilities 10,063,683 15,588,912
Shareholders’ equity:
Preferred stock (50,000,000 shares
authorized; no shares outstanding) - -
Common stock ($0.01 par value, 1,200,000,000
shares authorized; 323,042,613 and
282,804,211 shares issued and shares
outstanding, respectively) 3,230 2,828
Additional paid-in capital 3,909,364 3,686,765
Accumulated deficit (1,748,822) (868,425)
Accumulated other comprehensive income, net 19,361 9,095
------ -----
Total CapitalSource Inc. shareholders’ equity 2,183,133 2,830,263
Noncontrolling interests 126 457
--- ---
Total shareholders’ equity 2,183,259 2,830,720
--------- ---------
Total liabilities and shareholders’ equity $12,246,942 $18,419,632
=========== ===========
CapitalSource Inc.
Consolidated Statements of Operations
($ in thousands, except per share data)
Three Months Ended
---------------------------------------
December 31, September 30 December 31,
2009 2009 2008
------------ ------------ -----------
Net investment income: (Unaudited)
Interest income:
Loans $181,693 $191,928 $258,072
Investment securities 13,516 13,421 26,606
Other 870 1,126 6,716
--- ----- -----
Total interest income 196,079 206,475 291,394
Fee income 6,041 5,176 7,114
----- ----- -----
Total interest and fee income 202,120 211,651 298,508
Operating lease income 8,526 8,425 8,474
----- ----- -----
Total investment income 210,646 220,076 306,982
Interest expense:
Deposits 18,410 22,674 44,067
Borrowings 76,114 81,328 130,153
------ ------ -------
Total interest expense 94,524 104,002 174,220
------ ------- -------
Net investment income 116,122 116,074 132,762
Provision for loan losses 265,487 221,385 445,452
------- ------- -------
Net investment loss after
provision for loan losses (149,365) (105,311) (312,690)
Operating expenses:
Compensation and benefits 40,423 29,339 44,331
Depreciation of direct real
estate investments 2,540 2,540 2,540
Professional fees 12,529 15,212 22,816
Other administrative expenses 22,949 19,862 15,169
------ ------ ------
Total operating expenses 78,441 66,953 84,856
Other expense:
Loss on investments, net (1,158) (8,472) (39,566)
Loss on derivatives (738) (10,298) (20,728)
(Loss) gain on residential
mortgage investment portfolio - (3) (29,506)
Gain (loss) on extinguishment
of debt 577 11,472 (23,926)
Other expense, net (7,975) (3,839) (30,654)
------ ------ -------
Total other expense (9,294) (11,140) (144,380)
------ ------- --------
Net loss from continuing
operations before income taxes (237,100) (183,404) (541,926)
Income tax expense (benefit) 5,125 97,089 (229,965)
----- ------ --------
Net loss from continuing
operations (242,225) (280,493) (311,961)
Net income from discontinued
operations, net of taxes 8,518 6,257 10,831
Net (loss) income from sale of
discontinued operations, net of
taxes (10,215) - -
------- -- --
Net loss (243,922) (274,236) (301,130)
Net income (loss) attributable
to noncontrolling interests
(includes income related to
discontinued operations of
$1.6 million for the year
ended December 31, 2008) - 10 (54)
-- -- ---
Net loss attributable to
CapitalSource Inc. (243,922) (274,246) (301,076)
-------- -------- --------
Basic (loss) income per share:
From continuing operations $(0.76) $(0.89) $(1.13)
From discontinued operations $(0.01) $0.02 $0.04
Attributable to CapitalSource Inc. $(0.76) $(0.87) $(1.08)
Diluted (loss) income per share:
From continuing operations $(0.76) $(0.89) $(1.13)
From discontinued operations $(0.01) $0.02 $0.04
Attributable to CapitalSource Inc. $(0.76) $(0.87) $(1.08)
Average shares outstanding:
Basic 320,050,373 315,604,434 277,179,051
Diluted 320,050,373 315,604,434 277,179,051
Dividends declared per share $0.01 $0.01 $0.05
Year Ended
-------------------------
December 31, December 31,
2009 2008
----------- -----------
Net investment income: (Unaudited)
Interest income:
Loans $796,976 $1,037,561
Investment securities 60,959 138,102
Other 4,651 23,866
----- ------
Total interest income 862,586 1,199,529
Fee income 22,884 33,099
------ ------
Total interest and fee income 885,470 1,232,628
Operating lease income 33,985 31,896
------ ------
Total investment income 919,455 1,264,524
Interest expense:
Deposits 109,430 76,245
Borrowings 328,283 617,112
------- -------
Total interest expense 437,713 693,357
------- -------
Net investment income 481,742 571,167
Provision for loan losses 845,986 593,046
------- -------
Net investment loss after
provision for loan losses (364,244) (21,879)
Operating expenses:
Compensation and benefits 139,607 143,401
Depreciation of direct real
estate investments 10,160 10,110
Professional fees 57,072 52,578
Other administrative expenses 81,029 58,947
------ ------
Total operating expenses 287,868 265,036
Other expense:
Loss on investments, net (30,724) (73,569)
Loss on derivatives (13,055) (41,082)
(Loss) gain on residential
mortgage investment portfolio 15,308 (102,779)
Gain (loss) on extinguishment
of debt (40,514) 58,856
Other expense, net (36,900) (5,185)
------- ------
Total other expense (105,885) (163,759)
-------- --------
Net loss from continuing
operations before income taxes (757,997) (450,674)
Income tax expense (benefit) 136,314 (190,583)
------- --------
Net loss from continuing
operations (894,311) (260,091)
Net income from discontinued
operations, net of taxes 33,335 41,310
Net (loss) income from sale of
discontinued operations, net of
taxes (8,071) 104
------ ---
Net loss (869,047) (218,677)
Net income (loss) attributable
to noncontrolling interests
(includes income related to
discontinued operations of
$1.6 million for the year
ended December 31, 2008) (28) 1,426
--- -----
Net loss attributable to
CapitalSource Inc. (869,019) (220,103)
-------- --------
Basic (loss) income per share:
From continuing operations $(2.92) $(1.04)
From discontinued operations $0.08 $0.16
Attributable to CapitalSource Inc. $(2.84) $(0.88)
Diluted (loss) income per share:
From continuing operations $(2.92) $(1.04)
From discontinued operations $0.08 $0.16
Attributable to CapitalSource Inc. $(2.84) $(0.88)
Average shares outstanding:
Basic 306,417,394 251,213,699
Diluted 306,417,394 251,213,699
Dividends declared per share $0.04 $1.30
CapitalSource Inc.
Segment Data
(Unaudited)
($ in thousands)
Three Months Ended December 31, 2009
OTHER HEALTHCARE
CAPITALSOURCE COMMERCIAL NET
Net investment income: BANK FINANCE LEASE
-------------- ----------- -----------
Interest income $83,698 $118,141 $161
Fee income 1,412 4,629 -
----- ----- --
Total interest and fee
income 85,110 122,770 161
Operating lease income - - 8,526
-- -- -----
Total investment income 85,110 122,770 8,687
Interest expense 19,427 73,455 5,819
------ ------ -----
Net investment income 65,683 49,315 2,868
Provision for loan losses 49,469 216,018 -
------ ------- --
Net investment income (loss)
after provision for loan
losses 16,214 (166,703) 2,868
Compensation and benefits 11,147 28,735 541
Depreciation of direct real
estate investments - - 2,540
Professional fees 733 11,790 6
Other operating expenses 13,287 17,164 1,324
------ ------ -----
Total operating expenses 25,167 57,689 4,411
Total other income
(expense) 9,472 (5,973) (1,018)
----- ------ ------
Net income (loss) from
continuing operations before
income taxes 519 (230,365) (2,561)
Income tax (benefit) expense (14,869) 18,314 1,680
------- ------ -----
Net income (loss) from
continuing operations 15,388 (248,679) (4,241)
Net income from discontinued
operations, net of taxes - - 8,518
Net loss from sale of
discontinued operations, net
of taxes - - (10,215)
-- -- -------
Net income (loss) attributable to
CapitalSource Inc. $15,388 $(248,679) $(5,938)
------- --------- -------
INTERCOMPANY
Net investment income: ELIMINATIONS CONSOLIDATED
------------- ------------
Interest income $(5,921) $196,079
Fee income - 6,041
-- -----
Total interest and fee
income (5,921) 202,120
Operating lease income - 8,526
-- -----
Total investment income (5,921) 210,646
Interest expense (4,177) 94,524
------ ------
Net investment income (1,744) 116,122
Provision for loan losses - 265,487
-- -------
Net investment income (loss)
after provision for loan
losses (1,744) (149,365)
Compensation and benefits - 40,423
Depreciation of direct real
estate investments - 2,540
Professional fees - 12,529
Other operating expenses (8,826) 22,949
------ ------
Total operating expenses (8,826) 78,441
Total other income
(expense) (11,775) (9,294)
------- ------
Net income (loss) from
continuing operations before
income taxes (4,693) (237,100)
Income tax (benefit) expense - 5,125
-- -----
Net income (loss) from
continuing operations (4,693) (242,225)
Net income from discontinued
operations, net of taxes - 8,518
Net loss from sale of
discontinued operations, net
of taxes - (10,215)
-- -------
Net loss attributable to
CapitalSource Inc. $(4,693) $(243,922)
------- ---------
Three Months Ended September 30, 2009
OTHER HEALTHCARE
CAPITALSOURCE COMMERCIAL NET
Net investment income: BANK FINANCE LEASE
-------------- ----------- -----------
Interest income $76,985 $135,436 $107
Fee income 1,800 3,376 -
------- ------- -------
Total interest and fee income 78,785 138,812 107
Operating lease income - - 8,425
------- ------- -------
Total investment income 78,785 138,812 8,532
Interest expense 23,602 78,729 5,722
------- ------- -------
Net investment income 55,183 60,083 2,810
Provision for loan losses 48,451 172,934 -
------- ------- -------
Net investment income (loss)
after provision for loan
losses 6,732 (112,851) 2,810
Compensation and benefits 11,410 17,345 584
Depreciation of direct real
estate investments - - 2,540
Professional fees 575 14,411 226
Other operating expenses 13,380 16,880 1,555
------- ------- -------
Total operating expenses 25,365 48,636 4,905
Total other income
(expense) 7,409 (5,830) (1,104)
------- ------- -------
Net loss from continuing
operations before income
taxes (11,224) (167,317) (3,199)
Income tax expense (benefit) 3,925 93,807 (643)
------- ------- -------
Net loss from continuing
operations (15,149) (261,124) (2,556)
Net income from discontinued
operations, net of taxes - - 6,257
------- ------- -------
Net (loss) income (15,149) (261,124) 3,701
Net income attributable to
noncontrolling interests - 10 -
------- ------- -------
Net (loss) income
attributable to
CapitalSource Inc. $(15,149) $(261,134) $3,701
------- ------- -------
INTERCOMPANY
Net investment income: ELIMINATIONS CONSOLIDATED
------------- ------------
Interest income $(6,053) $206,475
Fee income - 5,176
------- -------
Total interest and fee income (6,053) 211,651
Operating lease income - 8,425
------- -------
Total investment income (6,053) 220,076
Interest expense (4,051) 104,002
------ -------
Net investment income (2,002) 116,074
Provision for loan losses - 221,385
------- -------
Net investment income (loss)
after provision for loan
losses (2,002) (105,311)
Compensation and benefits - 29,339
Depreciation of direct real
estate investments - 2,540
Professional fees - 15,212
Other operating expenses (11,953) 19,862
------- -------
Total operating expenses (11,953) 66,953
Total other income
(expense) (11,615) (11,140)
------- -------
Net loss from continuing
operations before income
taxes (1,664) (183,404)
Income tax expense (benefit) - 97,089
------- -------
Net loss from continuing
operations (1,664) (280,493)
Net income from discontinued
operations, net of taxes - 6,257
------- -------
Net (loss) income (1,664) (274,236)
Net income attributable to
noncontrolling interests - 10
------- -------
Net (loss) income
attributable to
CapitalSource Inc. $(1,664) $(274,246)
------- ---------
Segment Data
(Unaudited)
($ in thousands)
Year Ended December 31, 2009
OTHER HEALTHCARE
CAPITALSOURCE COMMERCIAL NET
Net investment income: BANK FINANCE LEASE
-------------- ----------- -----------
Interest income $307,653 $573,543 $450
Fee income 6,462 16,422 -
------- ------- -------
Total interest and fee
income 314,115 589,965 450
Operating lease income - - 33,985
------- ------- -------
Total investment income 314,115 589,965 34,435
Interest expense 111,993 318,662 20,109
------- ------- ------
Net investment income 202,122 271,303 14,326
Provision for loan losses 213,381 632,605 -
------- ------- -------
Net investment (loss)
income after provision for
loan losses (11,259) (361,302) 14,326
Compensation and benefits 44,516 93,066 2,025
Depreciation of direct real
estate investments - - 10,160
Professional fees 2,518 54,414 140
Other operating expenses 53,440 65,562 6,689
------- ------- -------
Total operating expenses 100,474 213,042 19,014
Total other income
(expense) 34,806 (91,080) (2,136)
------- ------- -------
Net loss from continuing
operations before income
taxes (76,927) (665,424) (6,824)
Income tax (benefit)
expense (6,228) 143,800 (1,258)
------- ------- -------
Net loss from continuing
operations (70,699) (809,224) (5,566)
Net income from
discontinued operations,
net of taxes - - 33,335
Net loss from sale of
discontinued operations,
net of taxes - - (8,071)
------- ------- -------
Net (loss) income (70,699) (809,224) 19,698
Net loss attributable to
noncontrolling interests - (28) -
------- ------- -------
Net (loss) income
attributable to
CapitalSource Inc. $(70,699) $(809,196) $19,698
-------- --------- -------
INTERCOMPANY
Net investment income: ELIMINATIONS CONSOLIDATED
------------- ------------
Interest income $(19,060) $862,586
Fee income - 22,884
------- -------
Total interest and fee
income (19,060) 885,470
Operating lease income - 33,985
------- -------
Total investment income (19,060) 919,455
Interest expense (13,051) 437,713
------- -------
Net investment income (6,009) 481,742
Provision for loan losses - 845,986
------- -------
Net investment (loss)
income after provision for
loan losses (6,009) (364,244)
Compensation and benefits - 139,607
Depreciation of direct real
estate investments - 10,160
Professional fees - 57,072
Other operating expenses (44,662) 81,029
------- -------
Total operating expenses (44,662) 287,868
Total other income
(expense) (47,475) (105,885)
------- -------
Net loss from continuing
operations before income
taxes (8,822) (757,997)
Income tax (benefit)
expense - 136,314
------- -------
Net loss from continuing
operations (8,822) (894,311)
Net income from
discontinued operations,
net of taxes - 33,335
Net loss from sale of
discontinued operations,
net of taxes - (8,071)
------- -------
Net (loss) income (8,822) (869,047)
Net loss attributable to
noncontrolling interests - (28)
------- -------
Net (loss) income
attributable to
CapitalSource Inc. $(8,822) $(869,019)
------- ---------
Year Ended December 31, 2008
OTHER HEALTHCARE
CAPITALSOURCE COMMERCIAL NET
Net investment income: BANK FINANCE LEASE
-------------- ----------- -----------
Interest income $146,542 $1,059,514 $1,055
Fee income 1,562 31,190 347
-------- -------- --------
Total interest and fee
income 148,104 1,090,704 1,402
Operating lease income - - 31,896
-------- -------- --------
Total investment income 148,104 1,090,704 33,298
Interest expense 76,246 591,645 37,546
-------- -------- --------
Net investment income 71,858 499,059 (4,248)
Provision for loan losses 55,600 537,446 -
-------- -------- --------
Net investment income
(loss) after provision for
loan losses 16,258 (38,387) (4,248)
Compensation and benefits 20,010 121,219 2,172
Depreciation of direct real
estate investments - - 10,110
Professional fees 2,624 49,429 525
Other operating expenses 20,653 53,049 8,503
-------- -------- --------
Total operating expenses 43,287 223,697 21,310
Total other income
(expense) 12,451 (138,174) 41
-------- -------- --------
Net loss from continuing
operations before income
taxes (14,578) (400,258) (25,517)
Income tax benefit (6,089) (183,146) (1,348)
-------- -------- --------
Net loss from continuing
operations (8,489) (217,112) (24,169)
Net income from
discontinued operations,
net of taxes - - 41,310
Net income from sale of
discontinued operations,
net of taxes - - 104
-------- -------- --------
Net (loss) income (8,489) (217,112) 17,245
Net (loss) income
attributable to
noncontrolling interests - (706) 2,132
-------- -------- --------
Net (loss) income
attributable to
CapitalSource Inc. $(8,489) $(216,406) $15,113
-------- -------- --------
INTERCOMPANY
Net investment income: ELIMINATIONS CONSOLIDATED
------------- ------------
Interest income $(7,582) $1,199,529
Fee income - 33,099
---------- ----------
Total interest and fee
income (7,582) 1,232,628
Operating lease income - 31,896
---------- ----------
Total investment income (7,582) 1,264,524
Interest expense (12,080) 693,357
------- -------
Net investment income 4,498 571,167
Provision for loan losses - 593,046
---------- ----------
Net investment income
(loss) after provision for
loan losses 4,498 (21,879)
Compensation and benefits - 143,401
Depreciation of direct real
estate investments - 10,110
Professional fees - 52,578
Other operating expenses (23,258) 58,947
---------- ----------
Total operating expenses (23,258) 265,036
Total other income
(expense) (38,077) (163,759)
---------- ----------
Net loss from continuing
operations before income
taxes (10,321) (450,674)
Income tax benefit - (190,583)
---------- ----------
Net loss from continuing
operations (10,321) (260,091)
Net income from
discontinued operations,
net of taxes - 41,310
Net income from sale of
discontinued operations,
net of taxes - 104
---------- ----------
Net (loss) income (10,321) (218,677)
Net (loss) income
attributable to
noncontrolling interests - 1,426
---------- ----------
Net (loss) income
attributable to
CapitalSource Inc. $(10,321) $(220,103)
---------- ----------
CapitalSource Inc.
Selected Financial Data
(Unaudited)
Three Months Ended
December 31, September 30, December 31,
2009 2009 2008
---- ---- ----
CapitalSource Bank Segment:
Performance ratios:
Return on average assets 1.08% (1.07%) (1.19%)
Return on average equity 6.99% (6.89%) (7.69%)
Yield on average interest
earning assets 6.04% 5.62% 5.46%
Cost of funds 1.67% 2.01% 3.49%
Net finance margin 4.66% 3.94% 2.51%
Operating expenses as a
percentage of average
total assets 1.77% 1.79% 1.58%
Core lending spread 7.44% 7.13% 4.51%
Loan yield 7.68% 7.40% 6.70%
Capital ratios:
Tier 1 leverage 12.80% 12.52% 13.38%
Total risk-based capital 17.47% 16.75% 17.44%
Tangible common equity to
tangible assets 12.63% 12.71% 12.45%
Average balances
($ in thousands):
Average loans $3,051,946 $2,906,688 $2,610,303
Average assets 5,629,210 5,614,879 6,056,465
Average interest earning
assets 5,589,080 5,557,381 5,923,848
Average deposits 4,413,805 4,459,800 5,006,314
Average borrowings 201,967 200,011 N/A
Average equity 873,916 872,325 940,338
Other Commercial Finance Segment:
Performance ratios:
Return on average assets (13.14%) (12.28%) (9.51%)
Return on average equity (90.02%) (78.47%) (61.19%)
Yield on average interest
earning assets 6.73% 6.90% 7.58%
Cost of funds 4.78% 4.57% 4.89%
Net finance margin 2.70% 2.99% 3.31%
Operating expenses as a
percentage of average
total assets 3.05% 2.29% 2.23%
Core lending spread 7.13% 7.47% 7.18%
Loan yield 7.37% 7.74% 9.37%
Leverage ratios:
Total debt to equity (as
of period end) 3.57x 5.45x 6.20x
Equity to total assets (as
of period end) 20.81% 15.06% 13.30%
Average balances
($ in thousands):
Average loans $5,569,045 $5,943,007 $7,045,709
Average assets 7,510,840 8,437,236 11,890,601
Average interest earning
assets 7,234,367 7,981,177 11,229,656
Average borrowings 6,098,344 6,841,000 9,797,512
Average equity 1,095,952 1,320,307 1,848,025
Year Ended
December 31, December 31,
2009 2008
---- ----
CapitalSource Bank Segment:
Performance ratios:
Return on average assets (1.23%) (0.32%)
Return on average equity (7.86%) (2.09%)
Yield on average interest
earning assets 5.54% 5.70%
Cost of funds 2.36% 3.45%
Net finance margin 3.56% 2.76%
Operating expenses as a
percentage of average
total assets 1.75% 1.62%
Core lending spread 7.05% 4.40%
Loan yield 7.38% 7.07%
Capital ratios:
Tier 1 leverage 12.80% 13.38%
Total risk-based capital 17.47% 17.44%
Tangible common equity to
tangible assets 12.63% 12.45%
Average balances
($ in thousands):
Average loans $2,924,673 $1,071,601
Average assets 5,732,960 2,665,672
Average interest earning
assets 5,672,675 2,600,219
Average deposits 4,604,887 2,207,209
Average borrowings 133,227 N/A
Average equity 899,320 406,944
Other Commercial Finance Segment:
Performance ratios:
Return on average assets (9.23%) (1.53%)
Return on average equity (60.21%) (10.06%)
Yield on average interest
earning assets 7.23% 8.12%
Cost of funds 4.46% 5.07%
Net finance margin 3.32% 3.71%
Operating expenses as a
percentage of average
total assets 2.43% 1.58%
Core lending spread 7.67% 7.13%
Loan yield 8.00% 9.80%
Leverage ratios:
Total debt to equity (as
of period end) 3.57x 6.20x
Equity to total assets (as
of period end) 20.81% 13.30%
Average balances
($ in thousands):
Average loans $6,104,150 $8,581,928
Average assets 8,767,889 14,119,497
Average interest earning
assets 8,162,038 13,440,001
Average borrowings 7,137,868 11,659,636
Average equity 1,343,876 2,152,028
CapitalSource Inc.
Selected Financial Data
(Unaudited)
Three Months Ended
December 31, September 30, December 31,
2009 2009 2008
---- ---- ----
Healthcare Net Lease Segment:
Performance ratios:
Return on average assets (6.15%) (4.26%) (8.04%)
Yield on average income
earning assets 12.81% 9.52% 8.89%
Cost of funds 5.29% 5.53% 7.27%
Operating expenses as a
percentage of average
total assets 6.39% 5.71% 7.40%
Operating expenses
(excluding direct real
estate depreciation) as a
percentage of average
total assets 2.71% 2.75% 4.59%
Average balances
($ in thousands):
Average assets $273,665 $340,850 $358,979
Average interest earning
assets 31,984 18,739 19,065
Average income earning
assets 263,963 351,030 377,976
Average borrowings 436,667 410,469 511,012
Consolidated CapitalSource Inc.:
Performance ratios:
Return on average assets (7.30%) (7.87%) (6.86%)
Return on average equity (52.09%) (52.71%) (47.68%)
Yield on average interest
earning assets 6.24% 6.19% 6.89%
Cost of funds 3.42% 3.51% 4.56%
Net finance margin 3.51% 3.31% 3.00%
Operating expenses as a
percentage of average
total assets 2.37% 1.88% 1.87%
Operating expenses
(excluding direct real
estate depreciation) as a
percentage of average
total assets 2.29% 1.81% 1.81%
Leverage ratios:
Total debt and deposits
to equity (as of period
end) 4.40x 6.03x 6.56x
Equity to total assets
(as of period end) 17.90% 13.95% 12.83%
Tangible common equity to
tangible assets 16.55% 15.94% 14.49%
Average balances
($ in thousands):
Average loans $8,620,992 $8,849,696 $9,662,215
Average assets 13,156,717 14,144,972 18,041,403
Average interest earning
assets 12,855,432 13,557,298 17,178,771
Average income earning
assets 13,119,395 13,908,328 17,556,748
Average borrowings 6,554,886 7,285,940 10,164,806
Average deposits 4,413,805 4,459,800 5,006,314
Average equity 1,844,746 2,111,328 2,595,770
Year Ended
December 31, December 31,
2009 2008
---- ----
Healthcare Net Lease Segment:
Performance ratios:
Return on average assets (2.05%) (7.44%)
Yield on average income
earning assets 10.14% 8.45%
Cost of funds 4.95% 7.24%
Operating expenses as a
percentage of average
total assets 5.70% 5.74%
Operating expenses
(excluding direct real
estate depreciation) as a
percentage of average
total assets 2.65% 3.01%
Average balances
($ in thousands):
Average assets $333,672 $371,518
Average interest earning
assets 20,864 24,702
Average income earning
assets 335,031 377,606
Average borrowings 406,644 518,759
Consolidated CapitalSource Inc.:
Performance ratios:
Return on average assets (6.13%) (1.54%)
Return on average equity (41.35%) (10.95%)
Yield on average interest
earning assets 6.39% 7.67%
Cost of funds 3.61% 4.90%
Net finance margin 3.39% 3.47%
Operating expenses as a
percentage of average
total assets 1.97% 1.57%
Operating expenses
(excluding direct real
estate depreciation) as a
percentage of average
total assets 1.90% 1.51%
Leverage ratios:
Total debt and deposits
to equity (as of period
end) 4.50x 6.56x
Equity to total assets
(as of period end) 17.90% 12.83%
Tangible common equity to
tangible assets 16.55% 14.49%
Average balances
($ in thousands):
Average loans $9,028,580 $9,655,117
Average assets 14,585,513 16,898,427
Average interest earning
assets 13,855,334 16,066,509
Average income earning
assets 14,190,365 16,444,116
Average borrowings 7,520,155 11,957,169
Average deposits 4,604,887 2,207,209
Average equity 2,162,823 2,375,048
CapitalSource Inc.
Credit Quality Data
(Unaudited)
Dec. 31, Sept. 30, June 30, March 31,
2009 2009 2009 2009
---- ---- ---- ----
Loans 30-89 days
contractually
delinquent:
As a % of total
commercial
lending
assets(1) 3.12% 1.40% 1.19% 1.21%
Loans 90 or more
days contractually
delinquent:
As a % of total
commercial
lending
assets 4.80% 4.21% 4.17% 2.80%
Loans on
non-accrual(2) :
As a % of total
commercial
lending
assets 12.06% 10.58% 8.95% 5.90%
Impaired loans(3) :
As a % of total
commercial
lending
assets 14.12% 13.92% 12.16% 8.25%
Allowance for
loan losses:
As a % of total
commercial
lending
assets 6.63% 5.51% 4.53% 4.27%
Net charge offs
(last twelve
months):
As a % of
total average
commercial
lending
assets 6.63% 6.17% 5.40% 3.95%
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2008 2008 2008 2008 2007
---- ---- ---- ---- ----
Loans 30-89 days
contractually
delinquent:
As a % of total
commercial
lending
assets(1) 2.76% 0.39% 0.74% 1.11% 0.85%
Loans 90 or more
days contractually
delinquent:
As a % of total
commercial
lending
assets 1.30% 1.72% 1.17% 0.59% 0.60%
Loans on
non-accrual(2):
As a % of total
commercial
lending
assets 4.05% 2.39% 2.20% 1.78% 1.74%
Impaired loans(3):
As a % of total
commercial
lending
assets 6.38% 6.36% 5.40% 4.04% 3.25%
Allowance for
loan losses:
As a % of total
commercial
lending
assets 3.91% 1.48% 1.50% 1.40% 1.42%
Net charge offs
(last twelve
months):
As a % of total
average
commercial
lending
assets 2.89% 1.22% 0.66% 0.57% 0.64%
(1) Includes loans held for investments, loans held for sale, and
commercial real estate “A” participation interest.
(2) Includes loans with an aggregate principal balance of $356.6
million, $359.6 million, $295.3 million, $115.2 million, $110.3
million, $96.3 million, $58.3 million, $47.2 million, and $55.5
million as of December 31, 2009, September 30, 2009, June 30, 2009,
March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008,
March 31, 2008, and December 31, 2007, respectively, that were also
classified as loans 90 or more days contractually delinquent. Also
includes non-performing loans held for sale that had an aggregate
principal balance of $2.4 million, $25.1 million, $13.8 million,
$14.0 million, $14.5 million, $14.5 million, and $14.9 million as of
December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009,
December 31, 2008, September 30, 2008, and June 30, 2008,
respectively. As of March 31, 2008 and December 31, 2007 there were
no non-performing loans classified as held for sale.
(3) Includes loans with an aggregate principal balance of $422.7 million,
$366.1 million, $390.3 million, $179.3 million, $128.9 million, $163.8
million, $81.7 million, $47.2 million, and $55.5 million as of
December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009,
December 31, 2008, September 30, 2008, June 30, 2008, March 31, 2008,
and December 31, 2007, respectively, that were also classified as
loans 90 or more days contractually delinquent, and loans with an
aggregate principal balance of $1,065.1 million, $968.5 million,
$870.6 million, $601.1 million, $423.4 million, $249.4 million,
$192.4 million, $174.5 million, $170.5 million as of December 31,
2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31,
2008, September 30, 2008, June 30, 2008, March 31, 2008,
and December 31, 2007, respectively, that were also classified as
loans on non-accrual status.
SOURCE CapitalSource Inc.
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