Exhibit 99.2

		News
		CapitalSource Inc.
		4445 Willard Avenue
		Twelfth Floor
		Chevy Chase, MD 20815

		FOR IMMEDIATE RELEASE
For information contact:
Investor Relations:		Media Relations:
Dennis Oakes		Michael E. Weiss
Vice President — Investor Relations		Director of Communications
(212) 321-7212		(301) 841-2918

CAPITALSOURCE REPORTS ADJUSTED EPS OF $0.68
FOR THE SECOND QUARTER 2007

•		12.4% Increase in Adjusted Earnings from Prior Quarter
•		Strong Liquidity Based on Committed Bank Lines
•		Total Assets Under Management Increased to $20.1 billion
•		Dividend of $0.60 per Share Paid During the Quarter, 3.4% Increase from Prior Quarter

Chevy Chase, MD, August 2, 2007 — CapitalSource Inc. (NYSE: CSE) today announced financial results for the quarter ended June 30, 2007. Adjusted earnings for the quarter were $128.4 million, or $0.68 per diluted share, a 12.4% increase in adjusted earnings and a 7.9% increase in adjusted earnings per diluted share from the prior quarter.

Net income for the quarter was $84.3 million, or $0.45 per diluted share, a 7.2% increase in net income from the prior quarter.

A regular quarterly cash dividend of $0.60 per share was paid on June 29, 2007 to common shareholders of record on June 15, 2007. The dividend was 3.4% higher than the $0.58 per share dividend paid in the prior quarter.

“CapitalSource continues to perform at a high level as evidenced by the very strong returns this quarter,” said John K. Delaney, CapitalSource Chairman and CEO. “In light of current market conditions, we have been even more disciplined on new origination credit and pricing, and our net commercial asset growth of $537.6 million reflects that discipline. Our credit performance remains solid, with charge-offs and other credit metrics remaining in historical range.”

“Continued strong yield in our commercial loan portfolio and stable cost of funds produced net investment income ahead of our expectations this quarter,” said Thomas A. Fink, CapitalSource Chief Financial Officer. “Results were further complemented by favorable other income, including strong gains from our commercial investment portfolio. Our funding platform remains solid, and during the quarter and in July we took additional steps to further strengthen and diversify our funding and liquidity.”

Assets Under Management

•

Assets under management were approximately $20.1 billion, an increase of $1.9 billion, or 10.0%, from the prior quarter.

Commercial Asset Portfolio

	•		Total commercial assets, including commercial loans and direct real estate investments, were $10.0 billion at quarter end, an increase of $537.6 million, or 5.7%, from the prior quarter.
	•		Total commercial loans outstanding were $8.9 billion at quarter end, an increase of $303.1 million, or 3.5%, from the prior quarter.
	•		Direct real estate investments, net of accumulated depreciation, were $1.0 billion at quarter end, an increase of $227.2 million, or 28.2%, from the prior quarter.
	•		Interest income was $227.8 million for the quarter, an increase of $19.1 million, or 9.2%, from the prior quarter, primarily due to net portfolio growth.
	•		Operating lease income was $22.1 million for the quarter, an increase of $1.8 million, or 9.0%, from the prior quarter, primarily due to additional income generated by direct real estate assets acquired during the second quarter.
	•		Net investment income was $172.5 million for the quarter, an increase of $4.7 million, or 2.8%, from the prior quarter, primarily due to an increase in the average balance of commercial loans, partially offset by an increase in interest expense and provisions for loan losses.

Commercial Net Finance Margin

	•		Yield on average interest-earning assets was 12.05% for the quarter, a decrease of 39 basis points from the prior quarter. The decrease in yield is primarily due to a decrease in prepayment-related fee income.
	•		Prepayment-related fee income contributed 76 basis points to yield for the quarter, compared to 110 basis points in the prior quarter.
	•		Cost of funds was 6.20% for the quarter, a decrease of 2 basis points from the prior quarter. Overall borrowing spread to one-month LIBOR was 0.88% for the quarter, compared to 0.90% for the prior quarter.

	•		Leverage, as measured by the ratio of total debt-to-equity at the end of the quarter, was 4.03x, a slight increase consistent with the Company’s stated goal of achieving 4-5x leverage in its commercial lending and investment segment.
	•		Net finance margin, defined as net investment income divided by average income earning assets, was 6.95% for the quarter. The decrease of 43 basis points from 7.38% in the prior quarter was principally due to a decrease in fee income.

Other Income

	•		Gain (Loss) on Investments, net was $17.0 million, an increase of $10.8 million from the prior quarter primarily due to realized gains and dividends received on our commercial investment portfolio. Gains included a $3.2 million gain on the sale of an investment related to a previously charged-off loan.
	•		Other Income, net of expenses was $13.0 million, a $6.0 million increase from the prior quarter primarily due to gains on loan sales, fees arising from our HUD mortgage origination services, and third-party servicing income, partially offset by losses on foreign currency exchange.
	•		(Loss) gain on residential mortgage investment portfolio was $(13.8) million, an increase of $(8.1) million from the prior quarter primarily due to the net change in the fair value of Agency MBS and related derivatives. Adjusted earnings includes an adjustment for realized and unrealized losses (gains) on these items.
	•		Gain (loss) on derivatives was $3.2 million, an increase of $5.4 million from the prior quarter primarily due to a net increase in the fair value of hedges in our commercial lending & investment portfolio. Adjusted earnings includes an adjustment for unrealized (gains) losses on these items.

Commercial Credit

	•		Loans on non-accrual status, which the Company considers its primary credit metric, increased by 14 basis points from the first quarter to 1.77% of total commercial assets. Though higher than amounts reported in the prior quarter, this result is below that of the prior year end and the quarter ended June 30, 2006.
	•		Allowance for loan losses as a percentage of total commercial assets decreased 5 basis points from the prior quarter to 1.28%.
	•		Net charge-offs increased $3.4 million from the previous quarter to $13.6 million. As a percentage of average commercial assets, annualized net charge-offs for the year-to-date period are 0.52%.
	•		Impaired commercial assets as a percentage of total commercial assets were 3.50% at quarter end, an increase of 53 basis points from the prior quarter.

Funding and Liquidity

	•		During the quarter, the Company raised $82.1 million through the issuance of approximately 3.3 million shares of common stock under its Dividend Reinvestment and Stock Purchase Plan.
	•		During the quarter, the Company increased its unsecured credit facility to $1.05 billion from $640 million. Six new institutions joined the lending syndicate, bringing the total number of lenders to 23 at quarter end. Committed credit facilities totaled $5.3 billion with approximately $2.0 billion undrawn at quarter end.
	•		On July 30, the Company closed its offering of $250 million 7.25% senior subordinated convertible notes due 2037. The notes have an initial conversion rate of 36.9079 shares of the Company’s common stock per $1,000 principal amount, representing a conversion price of approximately $27.09 per share.

Effective Tax Rate

•

The overall annual estimated tax rate at quarter end was 23.00%, compared to 19.45% at the end of the prior quarter reflecting the Company’s estimate of greater profitability in our taxable REIT subsidiary.

Adjusted Return on Equity

•

The consolidated adjusted return on equity, defined as adjusted earnings divided by average GAAP equity, was 22.33% for the quarter, an increase of 121 basis points from the prior quarter. The accompanying Financial Supplement provides a detailed reconciliation of GAAP net income to adjusted earnings.

TierOne Update

	•		CapitalSource filed its application for approval of the acquisition of TierOne with the Office of Thrift Supervision (OTS) on June 29, 2007.
	•		CapitalSource and TierOne have filed a joint proxy statement / prospectus statement with the Securities and Exchange Commission on July 16, 2007, relating to the TierOne acquisition. The full document is posted on the Investor Relations section of the CapitalSource website at www.capitalsource.com.

CapitalSource will hold an analyst and investor conference call with a simultaneous webcast August 2, 2007 at 10 a.m. (Eastern Daylight Time) to discuss the company’s second quarter results. To participate, analysts and investors may call (866) 277-1181 from within United States or (617) 597-5358 from outside the United States, utilizing the passcode, 69384876. Other interested parties may access a webcast of the conference call at the Investor Relations section of the CapitalSource web site at www.capitalsource.com

A telephonic replay will be available from approximately 12:00 p.m. (Eastern Daylight Time) on August 2, 2007, through August 9, 2007. Please call (888) 286-8010 from the United States or (617) 801-6888 from outside the United States with the passcode 91867771. An audio replay will also be available on the Investor Relations section of the CapitalSource website.

The Company’s second quarter 2007 investor presentation will be posted to the Investor Relations section of the CapitalSource website on August 2, 2007. A transcript of the earnings conference call will also be posted on August 2, 2007.

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 June 30, 2007 was approximately $20.1 billion, including: $10.0 billion in the commercial lending and investing business, $6.5 billion in the residential mortgage investment business, and $3.5 billion on behalf of third parties. Headquartered in Chevy Chase, Maryland, the Company has approximately 550 employees in offices across the country and in Europe. For more information, visit www.capitalsource.com.

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 the proposed merger between CapitalSource and TierOne, 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,” “believe,” “expect,” “estimate,” “plan,” and similar expressions are generally intended to identify forward-looking statements. All forward-looking statements (including statements regarding future financial and operating 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 merger with TierOne may not be completed on the proposed terms and schedule or at all; changes in economic conditions; 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 2006 Annual Report on Form 10-K, and documents subsequently filed by CapitalSource with the Securities and Exchange Commission, including our Current Report on Form 8-K as filed with the SEC on July 23, 2007. 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.

CapitalSource Inc.
Consolidated Balance Sheets
(Unaudited)

		June 30,				March 31,				June 30,
		2007				2007				2006
		($ in thousands)
ASSETS
Cash and cash equivalents		$	271,492			$	308,770			$	302,055
Restricted cash			221,650				135,550				224,388
Mortgage-related receivables, net			2,162,715				2,239,257				2,412,279
Mortgage-backed securities pledged, trading			4,290,965				3,372,329				3,093,675
Receivables under reverse-repurchase agreements			26,237				26,315				95,632
Loans held for sale			154,229				156,650				42,221
Loans:
Loans			8,761,127				8,455,570				7,033,118
Less deferred loan fees and discounts			(128,785	)			(124,380	)			(127,584	)
Less allowance for loan losses			(127,547	)			(125,236	)			(100,775	)
Loans, net			8,504,795				8,205,954				6,804,759
Direct real estate investments, net			1,032,838				805,650				249,851
Investments			197,543				185,710				161,550
Other assets			299,226				228,148				183,445
Total assets		$	17,161,690			$	15,664,333			$	13,569,855
LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY
Liabilities:
Repurchase agreements		$	4,217,086			$	3,309,559			$	3,146,750
Credit facilities			3,671,041				3,425,020				3,363,978
Term debt			5,652,228				5,423,317				4,131,981
Other borrowings			1,082,176				1,040,453				838,504
Other liabilities			214,806				202,852				79,689
Total liabilities			14,837,337				13,401,201				11,560,902
Noncontrolling interests			44,871				44,797				56,341
Shareholders’ equity:
Preferred stock (50,000,000 shares authorized; no shares outstanding)			—				—				—
Common stock ($0.01 par value, 500,000,000 shares authorized; 191,877,813, 189,538,383 and 175,840,043 shares issued; 191,877,813, 188,238,383 and 174,540,043 shares outstanding, respectively)			1,918				1,882				1,745
Additional paid-in capital			2,361,158				2,302,393				1,950,721
Accumulated deficit			(85,978	)			(56,067	)			26,406
Accumulated other comprehensive income, net			2,384				53				3,666
Treasury stock, at cost			—				(29,926	)			(29,926	)
Total shareholders’ equity			2,279,482				2,218,335				1,952,612
Total liabilities, noncontrolling interests and shareholders’ equity		$	17,161,690			$	15,664,333			$	13,569,855

CapitalSource Inc.
Consolidated Statements of Income
(Unaudited)

		Three Months Ended
		June 30,				March 31,				June 30,				Six Months Ended June 30,
		2007				2007				2006				2007				2006
		($ in thousands, except per share data)
Net investment income:
Interest income		$	311,184			$	289,554			$	256,037			$	600,738			$	451,535
Fee income			45,056				50,027				36,603				95,083				78,145
Total interest and fee income			356,240				339,581				292,640				695,821				529,680
Operating lease income			22,118				20,288				6,694				42,406				11,319
Total investment income			378,358				359,869				299,334				738,227				540,999
Interest expense			200,291				186,649				153,918				386,940				251,700
Net investment income			178,067				173,220				145,416				351,287				289,299
Provision for loan losses			17,410				14,926				11,471				32,336				26,184
Net investment income after provision for loan losses			160,657				158,294				133,945				318,951				263,115
Operating expenses:
Compensation and benefits			38,615				40,014				34,130				78,629				67,450
Other administrative expenses			27,828				25,308				19,561				53,136				36,860
Total operating expenses			66,443				65,322				53,691				131,765				104,310
Other income (expense):
Diligence deposits forfeited			1,813				862				1,103				2,675				3,370
Gain (loss) on investments, net			17,002				6,163				(1,489	)			23,165				(1,740	)
Gain (loss) on derivatives			3,153				(2,255	)			6,124				898				6,650
(Loss) gain on residential mortgage investment portfolio			(13,846	)			(5,698	)			4,035				(19,544	)			(2,071	)
Other income, net of expenses			12,957				6,977				1,523				19,934				5,431
Total other income			21,079				6,049				11,296				27,128				11,640
Noncontrolling interests expense			1,272				1,330				1,230				2,602				2,091
Net income before income taxes and cumulative effect of accounting change			114,021				97,691				90,320				211,712				168,354
Income taxes			29,693				19,001				17,531				48,694				30,641
Net income before cumulative effect of accounting change			84,328				78,690				72,789				163,018				137,713
Cumulative effect of accounting change, net of taxes			—				—				—				—				370
Net income		$	84,328			$	78,690			$	72,789			$	163,018			$	138,083
Net income per share:
Basic		$	0.45			$	0.44			$	0.43			$	0.89			$	0.87
Diluted		$	0.45			$	0.43			$	0.43			$	0.88			$	0.85
Average shares outstanding:
Basic			185,371,033				179,324,672				168,866,621				182,274,147				159,309,225
Diluted			187,428,430				181,743,884				170,569,836				184,512,451				162,515,548
Dividends declared per share		$	0.60			$	0.58			$	0.49			$	1.18			$	0.98

CapitalSource Inc.
Net Income to Adjusted Earnings Reconciliation
(Unaudited)

     We evaluate our performance based on several measures, including adjusted earnings. Management views adjusted earnings and the related per share measures as useful and appropriate supplements to net income and earnings per share. These measures serve as an additional measure of our operating performance because they facilitate evaluation of the company without the effects of certain adjustments in accordance with U.S. generally accepted accounting principles (“GAAP”) that may not necessarily be indicative of current operating performance. We define adjusted earnings as net income as determined in accordance with GAAP, adjusted for certain non-cash items, including real estate depreciation, amortization of deferred financing fees, non-cash equity compensation, realized and unrealized gains and losses on our residential mortgage investment portfolio and related derivatives, unrealized gains and losses on other derivatives and foreign currencies, net unrealized gains and losses on investments, provision for loan losses, charge offs, recoveries, nonrecurring items and the cumulative effect of changes in accounting principles.

     Adjusted earnings should not be considered as an alternative to net income or cash flows from operating activities (each computed in accordance with GAAP). Instead, adjusted earnings should be reviewed in connection with net income and cash flows from operating, investing and financing activities in our consolidated financial statements, to help analyze how our business is performing. Adjusted earnings and other supplemental performance measures are defined in various ways throughout the REIT industry. Investors should consider these differences when comparing our adjusted earnings to other REITs.

     A reconciliation of our reported net income to adjusted earnings for the three months ended June 30, 2007, March 31, 2007 and June 30, 2006 and six months ended June 30, 2007 and 2006 was as follows:

		Three Months Ended												Six Months Ended
		June 30, 2007				March 31, 2007				June 30, 2006				June 30, 2007				June 30, 2006
		($ in thousands, except per share data)
Net income		$	84,328			$	78,690			$	72,789			$	163,018			$	138,083
Add:
Real estate depreciation and amortization (1)			7,896				6,762				2,220				14,658				3,610
Amortization of deferred financing fees (2)			6,823				5,508				7,525				12,332				14,427
Non-cash equity compensation			9,859				10,712				9,817				20,571				16,353
Net realized and unrealized losses on residential mortgage investment portfolio, including related derivatives (3)			15,846				7,535				(3,770	)			23,381				677
Unrealized (gains) losses on derivatives and foreign currencies, net			(1,287	)			328				(6,882	)			(959	)			(7,133	)
Unrealized losses on investments, net			1,170				47				3,870				1,217				5,106
Provision for loan losses			17,410				14,926				11,571				32,336				26,284
Recoveries (4)			—				—				—				—				—
Less:
Charge offs (5)			13,625				10,250				—				23,876				276
Nonrecurring items			—				—				—				—				4,725
Cumulative effect of accounting change, net of taxes			—				—				—				—				370
Adjusted earnings		$	128,420			$	114,258			$	97,140			$	242,678			$	192,036
Net income per share:
Basic — as reported		$	0.45			$	0.44			$	0.43			$	0.89			$	0.87
Diluted — as reported		$	0.45			$	0.43			$	0.43			$	0.88			$	0.85
Average shares outstanding:
Basic — as reported			185,371,033				179,324,672				168,866,621				182,274,147				159,309,225
Diluted — as reported			187,428,430				181,743,884				170,569,836				184,512,451				162,515,548
Adjusted earnings per share:
Basic		$	0.69			$	0.64			$	0.58			$	1.33			$	1.21
Diluted (6)		$	0.68			$	0.63			$	0.57			$	1.31			$	1.18
Average shares outstanding:
Basic			185,371,033				179,324,672				168,866,621				182,274,147				159,309,225
Diluted (7)			189,425,285				184,200,063				173,080,654				186,737,699				164,665,696

CapitalSource Inc.
Segment Data
(Unaudited)

		Three Months Ended June 30, 2007												Three Months Ended March 31, 2007
		Commercial Lending				Residential Mortgage				Consolidated				Commercial Lending				Residential				Consolidated
		& Investment				Investment				Total				& Investment				Mortgage Investment				Total
		($ in thousands)
Net investment income:
Interest income		$	227,795			$	83,389			$	311,184			$	208,654			$	80,900			$	289,554
Fee income			45,056				—				45,056				50,027				—				50,027
Total interest and fee income			272,851				83,389				356,240				258,681				80,900				339,581
Operating lease income			22,118				—				22,118				20,288				—				20,288
Total investment income			294,969				83,389				378,358				278,969				80,900				359,869
Interest expense			122,513				77,778				200,291				111,251				75,398				186,649
Net investment income			172,456				5,611				178,067				167,718				5,502				173,220
Provision for loan losses			17,410				—				17,410				14,926				—				14,926
Net investment income after provision for loan losses			155,046				5,611				160,657				152,792				5,502				158,294
Total operating expenses			64,564				1,879				66,443				64,221				1,101				65,322
Total other income (expense)			34,925				(13,846	)			21,079				11,747				(5,698	)			6,049
Noncontrolling interests expense			1,272				—				1,272				1,330				—				1,330
Net income (loss) before income taxes			124,135				(10,114	)			114,021				98,988				(1,297	)			97,691
Income taxes			29,693				—				29,693				19,001				—				19,001
Net income (loss)		$	94,442			$	(10,114	)		$	84,328			$	79,987			$	(1,297	)		$	78,690

		Six Months Ended June 30, 2007												Six Months Ended June 30, 2006
		Commercial Lending				Residential Mortgage				Consolidated				Commercial Lending				Residential				Consolidated
		& Investment				Investment				Total				& Investment				Mortgage Investment				Total
		($ in thousands)												($ in thousands)
Net investment income:
Interest income		$	436,449			$	164,289			$	600,738			$	348,211			$	103,324			$	451,535
Fee income			95,083				—				95,083				78,145				—				78,145
Total interest and fee income			531,532				164,289				695,821				426,356				103,324				529,680
Operating lease income			42,406				—				42,406				11,319				—				11,319
Total investment income			573,938				164,289				738,227				437,675				103,324				540,999
Interest expense			233,764				153,176				386,940				154,095				97,605				251,700
Net investment income			340,174				11,113				351,287				283,580				5,719				289,299
Provision for loan losses			32,336				—				32,336				25,883				301				26,184
Net investment income after provision for loan losses			307,838				11,113				318,951				257,697				5,418				263,115
Total operating expenses			128,785				2,980				131,765				100,102				4,208				104,310
Total other income (expense)			46,672				(19,544	)			27,128				13,711				(2,071	)			11,640
Noncontrolling interests expense			2,602				—				2,602				2,091				—				2,091
Net income (loss) before income taxes and cumulative effect of accounting change			223,123				(11,411	)			211,712				169,215				(861	)			168,354
Income taxes			48,694				—				48,694				30,641				—				30,64
Net income (loss) before cumulative effect of accounting change			174,429				(11,411	)			163,018				138,574				(861	)			137,713
Cumulative effect of accounting change, net of taxes			—				—				—				370				—				370
Net income (loss)		$	174,429			$	(11,411	)		$	163,018			$	138,944			$	(861	)		$	138,083

CapitalSource Inc.
Selected Financial Data
(Unaudited)

		Three Months Ended
		June 30,				March 31,				June 30,				Six Months Ended June 30,
		2007				2007				2006				2007				2006
Commercial Lending & Investment Segment:
Performance ratios:
Adjusted return on average assets			5.44	%			4.62	%			5.29	%			4.72	%			5.48	%
Adjusted return on average equity			26.58	%			21.99	%			21.96	%			22.79	%			24.88	%
Yield on average interest earning assets			12.05	%			12.44	%			12.57	%			12.24	%			12.67	%
Cost of funds			6.20	%			6.22	%			6.08	%			6.21	%			5.82	%
Net finance margin			6.95	%			7.38	%			7.99	%			7.15	%			8.22	%
Operating expenses as a percentage of average total assets			2.54	%			2.76	%			2.87	%			2.65	%			2.85	%
Operating expenses (excluding direct real estate depreciation) as a percentage of average total assets			2.25	%			2.47	%			2.72	%			2.36	%			2.72	%
Efficiency ratio (operating expenses / net investment income and other income)			31.13	%			35.78	%			34.63	%			33.29	%			33.67	%
Efficiency ratio (operating expenses excluding direct real estate depreciation) / net investment income and other income)			27.57	%			32.02	%			32.88	%			29.63	%			32.24	%
Leverage ratios:
Total debt to equity (as of period end)			4.03x				3.79x				3.46x				4.03x				3.46x
Equity to total assets (as of period end)			19.46	%			20.47	%			22.06	%			19.46	%			22.06	%
Average balances ($ in thousands):
Average loans		$	8,708,240			$	8,116,297			$	6,613,026			$	8,413,903			$	6,489,269
Average assets			10,182,737				9,440,708				7,241,677				9,814,020				7,094,584
Average interest earning assets			9,083,019				8,430,913				6,910,554				8,758,732				6,785,120
Average income earning assets			9,955,988				9,217,536				7,130,186				9,588,767				6,958,616
Average borrowings			7,929,113				7,258,442				5,356,722				7,595,630				5,339,899
Average equity			2,083,820				1,981,708				1,745,014				2,033,796				1,562,972
Consolidated CapitalSource Inc.:
Performance ratios:
Adjusted return on average assets			3.14	%			3.03	%			3.01	%			3.09	%			3.51	%
Adjusted return on average equity			22.33	%			21.12	%			19.81	%			21.74	%			22.12	%
Yield on average interest earning assets			9.51	%			9.69	%			9.36	%			9.60	%			10.02	%
Cost of funds			5.87	%			5.89	%			5.69	%			5.88	%			5.59	%
Net finance margin			4.49	%			4.69	%			4.57	%			4.59	%			5.39	%
Operating expenses as a percentage of average total assets			1.63	%			1.73	%			1.66	%			1.68	%			1.91	%
Operating expenses (excluding direct real estate depreciation) as a percentage of average total assets			1.44	%			1.55	%			1.58	%			1.50	%			1.83	%
Efficiency ratio (operating expenses / net investment income and other income)			33.36	%			36.44	%			34.26	%			34.82	%			34.66	%
Efficiency ratio (operating expenses excluding direct real estate depreciation) / net investment income and other income)			29.65	%			32.67	%			32.58	%			31.08	%			33.24	%
Leverage ratios:
Total debt to equity (as of period end)			6.42x				5.95x				5.88x				6.42x				5.88x
Equity to total assets (as of period end)			13.28	%			14.16	%			14.39	%			13.28	%			14.39	%
Average balances ($ in thousands):
Average loans		$	8,708,240			$	8,116,297			$	6,613,026			$	8,413,903			$	6,489,269
Average assets			16,392,440				15,298,106				12,954,351				15,848,296				11,029,981
Average interest earning assets			15,028,300				14,207,472				12,542,802				14,620,118				10,658,010
Average income earning assets			15,901,269				14,994,095				12,762,434				15,450,153				10,831,506
Average borrowings			13,691,403				12,860,904				10,847,931				13,278,448				9,087,398
Average equity			2,306,554				2,194,140				1,966,479				2,250,658				1,750,930

CapitalSource Inc.
Commercial Asset Portfolio
(Unaudited)

		June 30, 2007								March 31, 2007								June 30, 2006
Composition of portfolio by type:
Senior secured loans (1)		$	5,365,139				54	%		$	5,110,099				53	%		$	3,911,722				53	%
First mortgage loans (1)			2,864,815				29	%			2,814,286				30	%			2,953,042				40	%
Subordinate loans (1)			711,639				7	%			714,150				8	%			306,207				4	%
Direct real estate investments			1,032,838				10	%			805,650				9	%			249,851				3	%
Total commercial assets		$	9,974,431				100	%		$	9,444,185				100	%		$	7,420,822				100	%
Composition of portfolio by business:
Healthcare and Specialty Finance		$	3,830,840				39	%		$	3,592,443				38	%		$	3,354,312				45	%
Structured Finance			3,534,140				35	%			3,381,091				36	%			2,444,522				33	%
Corporate Finance			2,609,451				26	%			2,470,651				26	%			1,621,988				22	%
Total commercial assets		$	9,974,431				100	%		$	9,444,185				100	%		$	7,420,822				100	%

 

CapitalSource Inc.
Credit Quality Data
(Unaudited)

Credit Metrics by Asset Classification:

		June 30, 2007				March 31, 2007				June 30, 2006
60 or more days contractually delinquent:
As a % of total Commercial Assets(1)			0.97	%			0.77	%			1.27	%
As a % of total Commercial Loans(2)			1.09	%			0.85	%			1.31	%
Non-accrual (3) :
As a % of total Commercial Assets			1.77	%			1.63	%			1.94	%
As a % of total Commercial Loans			1.97	%			1.78	%			2.01	%
Impaired (4) :
As a % of total Commercial Assets			3.50	%			2.97	%			3.18	%
As a % of total Commercial Loans			3.91	%			3.24	%			3.28	%
Total (excluding assets in multiple categories):
As a % of total Commercial Assets			3.72	%			3.16	%			3.78	%
As a % of total Commercial Loans			4.15	%			3.46	%			3.91	%
Allowance for Loan Loss:
As a % of total Commercial Assets			1.28	%			1.33	%			1.36	%
As a % of total Commercial Loans			1.43	%			1.45	%			1.41	%
Net Charge Offs (annualized):
As a % of total Average Commercial Assets			0.57	%			0.47	%			0.72	%
As a % of total Average Commercial Loans			0.63	%			0.51	%			0.74	%

⁽¹⁾ Includes commercial loans, loans held for sale, receivables under reverse-repurchase agreements and direct real estate investments.

⁽²⁾ Includes commercial loans, loans held for sale and receivables under reverse-repurchase agreements.

⁽³⁾ Includes loans with an aggregate principal balance of $31.0 million, $41.5 million and $49.4 million as of June 30, 2007, March 31, 2007 and June 30, 2006, respectively, that were also classified as loans 60 or more days contractually delinquent. Also includes non-accrual loans held for sale with an aggregate principal balance of $3.0 million as of June 30, 2007.

⁽⁴⁾ Includes loans with an aggregate principal balance of $78.7 million, $54.4 million and $49.4 million, as of June 30, 2007, March 31, 2007 and June 30, 2006, respectively, that were also classified as loans 60 or more days contractually delinquent, and loans with an aggregate principal balance of $173.1 million, $153.8 million and $143.8 as of June 30, 2007, March 31, 2007 and June 30, 2006, respectively, that were also classified as loans on non-accrual status.