Thursday, CapitalSource Inc. (CSE),a specialized finance company, reported a loss for second quarter from profit a year ago, impacted adversely by higher provisions for commercial loan losses and a charge. The company also said that net investment income declined year-on-year.
The Chevy Chase, Maryland-based company posted a net loss attributable to the company of $246.55 million or $0.82 per share for the second-quarter, compared to net income of $62.03 million or $0.26 per share in the prior year quarter. In the prior quarter, the company had a net loss of $104 million or $0.36 per share in the prior quarter.
CapitalSource said the net loss of $0.82 per share resulted due mainly to provisions for commercial loan losses of $169 million and a $137 million accounting charge relating to a valuation allowance on deferred tax assets.
Net investment income dipped to $138.92 million from $161.58 million a year ago.
CapitalSource chief financial officer, Donald Cole, said, "Despite continued deterioration in the credit performance of our commercial real estate portfolio, it is encouraging to see signs of stabilization or slight improvement across the rest of our assets."
Interest income from loans declined to $183.09 million from $222.12 million a year ago, while interest income from investment securities slipped to $13.47 million from $29.42 million in the same period last year.
For the quarter, fee income decreased to $24.91 million from $41.27 million in the previous year. However, operating lease income increased to $27.41 million from $24.21 million a year ago.
Total operating expenses increased to $77.76 million from $70.64 million in the prior year period.
For the first half, net loss applicable to CapitalSource was $350.85 million or $1.19 per share, compared to net income of $67.27 million or $0.29 per share in the corresponding period last year.
For the first six months, CapitalSource had net investment income of $288.85 million, down from $340.7 million in the corresponding period last year.
CSE is trading at $4.11, down $0.04 or 0.96%, on a volume of about 481 thousand shares.
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