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CapitalSource Receives Final Court Approval for Acquisition of Deposits and Bank Branches

2008-07-17 17:50:00

    CHEVY CHASE, Md., July 17 /EMWNews/ -- The U.S. Bankruptcy

Court for the Central District of California today entered an order

authorizing the sale by Fremont Investment & Loan (FIL) of its retail

banking branches, deposits and certain assets to CapitalSource Bank (in

organization), a new California-chartered bank formed by CapitalSource Inc.


    CapitalSource Bank previously received regulatory and other approvals

for its organization, for the FIL transaction, and for the purchase of

CapitalSource loans. CapitalSource expects the Bank to commence operations

and to close the FIL transaction and the loan purchase from CapitalSource

by Friday, July 25, 2008.

    "Today represents the penultimate step in our depository strategy and

the purchase of deposits of over $5 billion and 22 retail bank branches in

California," said John K. Delaney, CapitalSource Chairman and CEO. "We are

excited that we can complete this important transaction next week and

immediately begin to capitalize on market conditions to originate new

commercial loans in CapitalSource Bank," added Delaney.

    CapitalSource Bank was incorporated in California on June 17, 2008,

pursuant to approvals and authority granted by the Federal Deposit

Insurance Corporation (FDIC) and the California Department of Financial

Institutions (DFI). CapitalSource Bank will commence operations as a robust

business with approximately 350 employees, including employees hired from

CapitalSource and FIL; total assets of approximately $6.2 billion; deposits

of approximately $5.3 billion; and equity capital in excess of $920


    Pursuant to its business plan approved by the FDIC and the DFI,

following the FIL transaction CapitalSource will sell approximately $2.1

billion of loans in its portfolio to the bank. The 22 retail bank branches

to be acquired in the transaction are expected to commence operations as

branches of CapitalSource Bank following the close of the transaction,

which is expected on July 25, 2008.

    The Company intends to hold a special analyst and investor call

following closing of the FIL transaction to provide additional details

about CapitalSource Bank and to update its view of market opportunities,

strategic direction and the financial outlook for CapitalSource Inc.

    About CapitalSource

    CapitalSource (NYSE: CSE) is a leading commercial lending, investment

and asset management business focused on the middle market. CapitalSource

manages an asset portfolio, which as of March 31, 2008 was approximately

$19.85 billion. Headquartered in Chevy Chase, Maryland, the Company had 535

employees as of March 31, 2008 in offices across the U.S. and in Europe.

For more information, visit

    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

our proposed bank formation and asset purchase and liability assumption,

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,"

"believe," "expect," "estimate," "plan," "will," "look forward," 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: the proposed bank transaction, including the asset purchase and

liability assumption, may not be completed on the proposed terms and

schedule or at all; changes in economic conditions; continued disruptions

in credit and other markets; movements in interest rates; competitive

pressures on product pricing and services; success and timing of other

business strategies; the nature, extent, and timing of governmental actions

and reforms; extended disruption of vital infrastructure; and other factors

described in CapitalSource's 2007 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.

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