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CapitalSource Inc. Reports Operating Results (10-Q)

August 03, 2010 | About:

CapitalSource Inc. (CSE) filed Quarterly Report for the period ended 2010-06-30.

Capitalsource Inc. has a market cap of $1.73 billion; its shares were traded at around $5.35 with and P/S ratio of 1.8. The dividend yield of Capitalsource Inc. stocks is 0.7%.CSE is in the portfolios of Seth Klarman of The Baupost Group, Mohnish Pabrai of Pabrai Mohnish, Michael Price of MFP Investors LLC, Richard Perry of Perry Capital, Steven Cohen of SAC Capital Advisors, Private Capital of Private Capital Management, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC.

Highlight of Business Operations:

Through our CapitalSource Bank segment activities, CapitalSource Bank provides financial products primarily to small and middle market businesses across the United States and also offers depository products and services in southern and central California, which are insured by the FDIC to the maximum amounts permitted by regulation. As of June 30, 2010, CapitalSource Bank had 825 loans outstanding of which 50 loans were shared with the Parent Company, with an aggregate outstanding principal balance of $3.5 billion, and held a $170.5 million senior participation interest in a pool of commercial real estate loans and related assets (the A Participation Interest).

In June 2010, we completed the sale of our remaining 103 long-term healthcare facilities to Omega Healthcare Investors, Inc. (Omega). We sold these facilities for approximately $94.7 million in cash, approximately 176,000 shares of Omega common stock valued at $3.3 million, and the assumption or repayment of $463.2 million in debt associated with the facilities. In addition, we received approximately 819,000 shares of Omega common stock valued at $15.2 million in consideration for certain escrows assigned to Omega at close. The consideration for these sales was in addition to approximately 1.3 million shares of Omega common stock valued at $25.0 million we received in December 2009 in consideration for granting to Omega a non-refundable option to purchase certain of the sold facilities. We recognized a pre-tax gain of $21.7 million on these sales.

In 2009, we established a valuation allowance against a substantial portion of our net deferred tax assets for subsidiaries where we determined that there was significant negative evidence with respect to our ability to realize such assets. Negative evidence we considered in making this determination included the incurrence of operating losses at several of our subsidiaries, and uncertainty regarding the realization of a portion of the deferred tax assets at future points in time. As of June 30, 2010, the total valuation allowance was $510.8 million. We intend to maintain a valuation allowance with respect to our deferred tax assets until sufficient positive evidence exists to support its reduction or reversal. Although realization is not assured, we believe it is more likely than not that the remaining recognized net deferred tax assets of $73.1 million as of June 30, 2010 will be realized.

Read the The complete Report

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