KBW Diversified Financial Services Conference. Donald F. Cole Chief Financial Officer June 2, 2010

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1 KBW Diversified Financial Services Conference Donald F. Cole Chief Financial Officer June 2, 2010

2 Forward Looking Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including certain plans, expectations, strategies, goals, and projections and including statements about growing our business and our assets, increased loan production levels, product lines and focus areas, our margins, market conditions, earnings, loan yields, and managing our legacy portfolio; our expectations regarding sufficiency of earnings, profitability, future credit performance, charge-offs, credit losses and provisions for loan losses; our unfunded commitments; growing and managing our business, costs, assets, branch network and deposits; net interest margin and costs of deposits; our portfolio's credit trends, expected losses and timing of 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, loan losses, reserves and delinquencies; our profitability; our valuation allowance against a portion of our deferred tax assets; our reserve policies and levels and anticipated future reserves; closing one of our branches; our liquidity and financing plan; the maturities of our recourse debt; our expectation regarding payment of the "A" Participation Interest; all which are subject to numerous assumptions, risks, and uncertainties. All statements contained in this presentation that are not clearly historical in nature are forward-looking, and the words "anticipate," "assume," "intend," "believe," "expect," "estimate," "plan," position, project, "will, should, seek, continue, outlook, "look forward," and similar expressions are generally intended to identify forward-looking statements. All forward-looking statements (including statements regarding preliminary and 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 and 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 CapitalSource Bank's deposits and commercial loan assets or deploy its capital in favorable lending transactions; competitive and other market pressures on product pricing and services; success and timing of other business strategies; changes in tax laws or regulations affecting our business; the nature, extent and timing of governmental actions and legislation; and other factors described in CapitalSource's 2009 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 presentation are based on information available at the time of the presentation. 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. KBW Diversified Financial Services Conference June 2, 2010 p. 2

3 Today s Presentation Section Page(s) 1Q 10 Overview / Key Messages 4-6 CapitalSource Bank 7-13 A Closer Look at Credit Funding and Liquidity Outlook Investment Thesis and Key Differentiators Appendix KBW Diversified Financial Services Conference June 2, 2010 p. 3

4 Overview - CapitalSource Leading commercial lending franchise focused on the middle market - with a diverse portfolio and proprietary, direct origination capability Approximately $8.0 billion in commercial loans (1) ~1,100 loans to finance small and medium-size businesses for working capital, growth, acquisitions or recapitalizations Significant California-based depository 22 retail branches (2) with ~50,000 customers in central and southern California Sound financial footing Well capitalized 15.52% tangible common equity to tangible assets Low leverage of 4.8x Diversified funding platform, including $4.6 billion of bank deposits $2.4 billion in match-funded commercial loan securitizations $0.4 billion in credit facility borrowing Seasoned, proven management team 15+ years of middle market lending experience Data as of March 31, 2010 (1) Does not include the A Participation Interest (2) The Santa Barbara retail branch is scheduled to close on July 30, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 4

5 Key Messages Nationwide specialty lending platform Stable deposit funding base High capital levels at Parent Company and CapitalSource Bank 1Q new funded loans totaled $243 million highest quarterly total since 4Q 08 Loans being made at CapitalSource Bank are diversified and have a smaller average size than legacy portfolio Significant decline in 1Q 10 charge-offs and lower loan loss provision than 4Q 09 Lower operating expense in 1Q 10, with largely fixed cost platform capable of supporting strong growth Current Focus Strong liquidity position, strengthened by sale of healthcare net lease assets No scheduled debt repayments until July 2011 Net 1Q 10 deposit inflow at CapitalSource Bank, despite further decline in average deposit costs Strong pre-tax, preprovision earnings at CapitalSource Bank Timing of return to profitability dependent on credit performance of legacy loans, primarily commercial real estate Lending concentrated in niche areas of historical strength for CapitalSource - particularly health care, security, technology and lender finance businesses supplemented by new business lines (equipment finance, multifamily and SBA lending) Rev-up the origination engine to reach midpoint to high end of quarterly new loan growth target of $250 - $350 million Continue to grow assets and enhance profitability at CapitalSource Bank, while managing credit performance in the legacy loan portfolio Improving market opportunities to address the converts putable in July 2011, consistent with stated goal of avoiding or minimizing dilution of equity shareholders Continue to make conservatively underwritten loans at wide spreads, funded by low cost funding sources, redeploy lower yielding assets and tightly manage operating expenses Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 5

6 Overview - The Path for Returning to Profitability in 2010 Redeploy cash and lower yielding assets into higher spread loans Reduce operating expenses, particularly third party fees Tightly manage legacy loan portfolio credit performance to maximize return Grow new assets at CapitalSource Bank KBW Diversified Financial Services Conference June 2, 2010 p. 6

7 CapitalSource Bank KBW Diversified Financial Services Conference June 2, 2010 p. 7

8 CapitalSource Bank Overview De novo California Industrial Bank formed in July retail branches (1) Strong liquidity and high capital levels A separate reporting segment of CapitalSource Inc. - largest segment based on assets Branches Select Data Assets $5.7 billion Commercial loans $3.2 billion (2) Cash / Investments Deposits Average Deposits Per Branch Total Capital $2.2 billion $4.6 billion ~$200 million $833 million Customers ~50,000 Data as of March 31, 2010 (1) The Santa Barbara retail branch is scheduled to close on July 30, 2010 (2) Includes $1.95 billion loans purchased from Parent Company at inception of the Bank KBW Diversified Financial Services Conference June 2, 2010 p. 8

9 Overview - We are Focused on Growth at CapitalSource Bank Focused lending strategy National direct origination sales team with deep industry experience Demonstrated ability to grow deposits as needed for future growth CapitalSource has the ability to grow Niche areas of lending expertise provide competitive advantage Ability to fund up to $2B in loans without raising deposits Excess liquidity at CapitalSource Bank KBW Diversified Financial Services Conference June 2, 2010 p. 9

10 Growing Pretax, Pre-Provision Earnings Loan growth at high spreads (average all-in yield in 1Q was 8.35%) Active deposit portfolio management Re-deployment of excess liquidity $37.2 $50.0 (1) $48.0 $19.8 $21.2 $24.8 $24.4 The core operating model has been built 3Q'08 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 CapitalSource Bank data as of March 31, 2010 (1) Pre-tax income before provision for credit losses. Includes $4.4 million non-recurring items in 4Q 09 KBW Diversified Financial Services Conference June 2, 2010 p. 10

11 CapitalSource Bank High Risked-Based Capital Levels $794.6 $743.1 $695.4 $682.0 $699.3 $ % 17.24% 17.47% 17.35% 16.77% 16.75% 13.38% 12.87% 12.46% 12.80% 12.52% 11.78% Q Q Q Q Q Q 2010 (1) (2) Tier 1 Capital CSB Risk-Based Capital Ratio Tier 1 Leverage Ratio Capital and projected earnings are sufficient to support strong balance sheet growth and to absorb short-term credit shocks CapitalSource Bank data as of March 31, 2010 (1) Ratio of total risk-based capital to total risk-based assets. Minimum 15% risk-based capital is required by FDIC de novo order (2) Ratio of Tier 1 capital to average total assets for leverage capital purposes KBW Diversified Financial Services Conference June 2, 2010 p. 11

12 CapitalSource Bank Margin Expansion Spreads have widened over the past five quarters, primarily due to significant decline in cost of deposits and re-deployment of excess liquidity into higher yielding loans and investments 6.04% 5.87% 5.46% 5.35% 5.62% 5.19% 4.66% 4.63% 3.94% 4.37% 4.40% 3.49% 1.97% 2.51% 3.16% 2.19% 2.69% 2.69% 2.58% 2.61% 3.61% 2.01% 1.67% 1.47% Q Q Q Q Q Q 2010 Spread Yield on Interest Earning Assets Cost of Funds Net Interest Margin CapitalSource Bank data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 12

13 CapitalSource Bank Building Reserves $222 CSB Reserves ($ millions) CSB Reserves (% of core loans) (1) 6.92% Average Reserves / Loans: Banks $1-5B Assets Average Reserves / Loans: Banks $5-10B Assets $153 Average Reserves / Loans: Banks >$10B Assets $127 $92 $56 $ % 3.03% 2.39% 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 Data as of March 31, Source: SNL Financial. Banks used are those traded on the NYSE or NASDAQ. There are 166 banks with $1-5B in assets, 29 banks with $5-10B in assets, and 55 banks with>$10b in assets. (1) Core loans exclude the A Participation Interest KBW Diversified Financial Services Conference June 2, 2010 p. 13

14 A Closer Look at Credit KBW Diversified Financial Services Conference June 2, 2010 p. 14

15 Consolidated Credit Highlights of 1Q 10 Legacy loan portfolio reserves projected to be sufficient to cover future anticipated charge-offs in this static portfolio 1Q quarterly commercial charge-offs decreased by 38% from 4Q 09 to $119 million Quarterly provision for commercial loan losses decreased by 16% to $219 million Total allowance for loan losses raised to $686 million or 8.24% of commercial lending assets Specific reserves increased by 65% to $192 million Total loans on non-accrual increased by $73 million to $1.14 billion 55% ($630 million) of the loans on non-accrual are current Charge-offs (61%) and reserves (74%) were concentrated in commercial real estate Legacy CRE portfolio reduced to $1.25 billion (19% of legacy portfolio) Total reserves for legacy CRE raised to $286 million (21% increase over prior quarter) Total reserves for legacy CRE include $142 million of specific reserves Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 15

16 Consolidated Credit General and Specific Reserves (in millions) 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 Change From Prior Quarter General $ $ $ $ $ % Specific % Total $ $ $ $ $ % 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 Change From Loan Category $ % $ % $ % $ % $ % Prior Quarter Land $ 7, % $ 21, % $ 18, % $ 24, % $ 43, % 75.2% 2nd Lien RE $ - 0.0% $ - 0.0% $ 7, % $ 13, % $ 12, % -4.8% CRE Other $ 6, % $ 7, % $ 20, % $ 30, % $ 85, % 178.3% Resort/Club $ % $ 3, % $ 1, % $ 10, % $ 5, % -47.8% Timeshare Rec & Other $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% Mortgage Rediscount $ 14, % $ 12, % $ 8, % $ % $ % 3.0% Cash Flow $ 33, % $ 10, % $ 20, % $ 24, % $ 25, % 3.0% Media $ 33, % $ 27, % $ 8, % $ 5, % $ 10, % 96.6% Healthcare (incl RE) $ % $ % $ % $ % $ 4, % 443.5% Asset Based $ % $ 2, % $ 5, % $ 5, % $ 3, % -37.3% Total $ 96, % $ 85, % $ 91, % $ 116, % $ 191, % 64.6% Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 16

17 Consolidated Credit Charge-Off Trend Analysis By Asset Category 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 Total ($ thousands) $ % $ % $ % $ % $ % $ % $ % Land $ 18, % $ 11, % $ 40, % $ 22, % $ 28, % $ 30, % $ 151, % 2nd Lien $ 12, % $ 5, % $ 32, % $ 30, % $ 5, % $ 4, % $ 91, % CRE Other $ 13, % $ 11, % $ 16, % $ 15, % $ 71, % $ 38, % $ 167, % Resort/Club $ - 0.0% $ - 0.0% $ - 0.0% $ 2, % $ - 0.0% $ 10, % $ 12, % Time Share Rec. & Other $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% Mortgage Rediscount $ 7, % $ 32, % $ 11, % $ 19, % $ 20, % $ 2, % $ 93, % Cash Flow $ 87, % $ 45, % $ 25, % $ 10, % $ 38, % $ 18, % $ 227, % Media $ 4, % $ 10, % $ 38, % $ 28, % $ 17, % $ 8, % $ 107, % Healthcare (inc RE) $ 12, % $ 2, % $ (37) 0.0% $ % $ % $ 1, % $ 17, % Asset Based $ 24, % $ (1,284) -1.1% $ 1, % $ 4, % $ 8, % $ 4, % $ 43, % Total $ 180, % $ 119, % $ 166, % $ 134, % $ 191, % $ 119, % $ 912, % Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 17

18 Consolidated Credit - Comparing Quarterly Provisions and Charge-offs Quarterly Loan Loss Provisions Charge-Offs 1Q 10 4Q 09 Parent (Other Commercial) $131 $ % CS Bank $88 $ % Total Commercial $219 $ % 1Q 10 4Q 09 Parent (Other Commercial) $101 $ % CS Bank $18 $ % Total Commercial $119 $ % Allowance ($) Allowance % (1) 1Q 10 4Q 09 1Q 10 4Q 09 Parent (Other Commercial) $464 $ % CS Bank $222 $ % Total Commercial $686 $ % Parent (Other Commercial) 9.69% 8.28% CS Bank 6.28% 4.23% Total Commercial 8.24% 6.63% Data as of March 31, 2010 Note: All $ in millions (1) Allowance as a % of total commercial lending assets KBW Diversified Financial Services Conference June 2, 2010 p. 18

19 Consolidated Credit - Expected Losses in Legacy Portfolio by Asset Class We expect the current level of reserves for the legacy portfolio will be sufficient to cover anticipated losses Reserving policies are forward looking estimates based on historical evidence (prior 4-6 quarters) Commercial real estate credit trends remained elevated in 1Q 10, which caused us to increase reserves beyond the level our remaining charge-off analysis shows necessary Legacy Portfolio at (1) Legacy Portfolio at (1)(2) Est. Total Cum. Loss Specific & General on Portfolio Charge-offs Through (3) Reserves Through Total Mark on Legacy Portfolio at 3/31/10 Remaining Provisions (4) at Remaining Charge-offs (5) at Low High Low High 4Q'09 1Q'10 4Q'09 1Q'10 $ % Low High Low High Land $585,326 $562, % 40.0% $175,598 $234,130 $73,018 $103,270 $92,124 $131,729 $235, % (59,402) ($869) $72,327 $130,860 2nd Lien 199, , % 60.0% 99, ,794 84,710 89,544 36,852 36, , % (25,864) (5,899) 10,285 30,250 CRE Other 860, , % 25.0% 129, , , , , , , % (142,127) (56,120) (23,713) 62,293 Resort / Club 528, , % 10.0% 26,425 52,850 2,418 12,564 43,749 76,932 89, % (63,070) (36,645) 13,862 40,287 Time Share Rec. & Other 546, , % 15.0% 27,338 82, ,981 51,211 51, % (23,872) 30,804 27,338 82,015 Mortgage Rediscount 338,929 98, % 35.0% 84, ,625 96,274 98,847 19,186 8, , % (22,526) 11,367 (14,115) 19,778 Cash Flow 2,792,068 2,259, % 15.0% 279, , , , , , , % (149,441) (9,838) 5, ,491 Media 441, , % 40.0% 88, , , ,309 46,120 45, , % (68,456) 19,884 (22,968) 65,372 HealthCare (inc RE) 1,376,281 1,228, % 3.0% 13,763 41,288 14,448 16,107 9,570 13,509 29, % (15,853) 11,673 (2,344) 25,182 Asset Based 1,008, , % 3.0% 10,084 30,253 16,879 21,660 17,547 17,021 38, % (28,596) (8,427) (11,576) 8,593 Legacy Portfolio $8,677,734 $7,356, % 17.2% $934,325 $1,489,463 $762,981 $879,342 $561,125 $654,192 $1,533, % ($599,209) ($44,071) $54,984 $610,121 (1) "Legacy Portfolio" includes active loans held at CapitalSource Bank and the parent company as of that existed as of Excludes loans that were paid off or fully charged-off prior to (2) Reflects payments, dispositions and increased fundings of legacy loans since (3) Does not include loans that were fully paid off or charged off prior to (4) Represents the estimated future P/L impact (5) The Company expects that these charge-offs are likely to be largely realized by the end of 2011 KBW Diversified Financial Services Conference June 2, 2010 p. 19

20 Consolidated Credit - Total Cumulative Legacy Portfolio Marks Compared Land 2nd Lien 30% 40% 28.2% 40.1% 50% 60% 60.9% 63.0% CRE Other Resort / Club Time Share Rec & Other Mortgage Rediscount (1) Cash Flow Media (1) Healthcare Asset Based Total Legacy Portfolio 15% 25% 25.7% 5% 10% 8.7% 5% 15% 6.8% 9.4% 25% 35% 31.6% 34.1% 10% 15% 14.7% 15.4% 20% 40% 33.5% 33.8% 1% 3% 1.7% 2.2% 1% 3% 3.4% 10.8% 17.2% 15.3% 17.7% 3.8% 31.5% 16.9% Total Mark on Portfolio Through Through Estimated Cumulative Loss Range Data as of March 31, 2010 (1) The small decrease in 1Q 10 was due to a decrease in general reserves due to reserve factor reductions KBW Diversified Financial Services Conference June 2, 2010 p. 20

21 Consolidated Credit Legacy Commercial Real Estate - $25 million + At 3/31/2010, there were 16 legacy CRE loans ($820 million) greater than $25 million. None of those 16 loans was impaired at 12/31/2008 At 3/31/2010, 11 of those loans ($494 million) were impaired and had already experienced charge-offs of $115 million (19%), with an additional $111 of specific reserves (22%) remaining Only 5 of those loans ($326 million) were non-impaired at 3/31/2010 Two of the non-impaired loans are Manhattan land loans ($236 million) and carried a substantial general reserve percentage (>35%) The other 3 non-impaired loans were between $29 million and $32 million and likewise carry substantial general reserves (>15%) There Are Very Few Remaining Non-Impaired Large CRE Loans Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 21

22 Consolidated Credit Reserve Levels The Allowance for Loan Losses is comprised of Specific Reserves and General Reserves Specific Reserves are allocated to individual loans deemed impaired General Reserves are allocated to the pool of loans that is not identified as impaired and are designed to cover losses inherent in the non-impaired portfolio Loans are identified as impaired based on GAAP Internal ratings are used to identify the population of loans to test for impairment A loan is categorized as impaired when we determine, based on current information, that it is probable that we will be unable to collect all amounts due according to the contractual terms of the original loan agreement Loans deemed impaired are assessed to determine the need for a specific reserve. Not all impaired loans have an associated specific reserve The appropriate allowance for loan loss is assessed at each Balance Sheet date The Provision for Loan Losses on the Income Statement results from the net change in the Allowance for Loan Losses plus Charge-Offs Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 22

23 Consolidated Credit General Reserves General Reserve methodology utilizes historical loss experience to estimate inherent losses CapitalSource utilizes 12 credit categories to calculate the general reserve The loss experience from several years of recent, seasoned vintages is used to calculate historical loss experience Historical Loss experience is weighted based on internal loan risk ratings Historical rating migration data is used to estimate the probability of default and loss by category Categories with the most severe distress (CRE, Land) have high expected default rates due to negative rating migration and therefore receive higher general reserves than other categories General Reserve also considers qualitative factors to increase or decrease levels determined by the historical model Factors include loan concentrations, loan collateral coverage and trends in problem loan statistics These factors have led to increases in the Allowance in recent quarters Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 23

24 Consolidated Credit Reserves 1 st Quarter 2010 Large Incremental Specific Provisions were taken on a small number of Commercial Real Estate Loans Three hotel loans accounted for $79 million and three land loans accounted for $48 million of specific provisions 2/3 of total 1Q 10 specific provision of $194 million Some of these provisions were the result of newly received appraisals which may reflect conservatism based on the recent past, as well as current uncertainty in real estate valuations Those specific provisions in turn worsened the historical loss experience used to calculate the general reserve Land and CRE loss experience worsened considerably, increasing the estimates of loss against the remaining non-impaired portfolio Troubled loan statistics also impacted the overall view of reserve levels Internal loan rating downgrades increased the estimated probability of default on large loans, thereby increasing the estimated general reserve Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 24

25 Consolidated Credit Reserves in Future Quarters We anticipate that income statement provisions for the balance of 2010 will decline significantly from the 1Q level The population of large unimpaired real estate loans has shrunk considerably A large percentage of the legacy real estate portfolio is now impaired and specifically reserved against With limited exceptions, internal loan ratings are showing signs of stabilization Loans have recently been resolved at or above our marks A commercial real estate loan that was marked to approximately 50% of its legal balance based upon an appraisal recently sold for 25% above our mark resulting in a significant recovery Other loans and REO in the portfolio are undergoing sales processes and have multiple bidders, have sold and/or are under contract to sell for amounts at or above book value Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 25

26 The Deferred Tax Asset (DTA) What is the valuation allowance related to the DTA? A non-cash accounting charge on the income tax line of our income statement. The valuation allowance has been recorded for eight of eleven CapitalSource taxable entities, based on a recent history of 3-year cumulative GAAP losses Total of $477 million at 3/31/10 ($1.48 / share) Reversal of the valuation allowance will require a sustained period of profitability How will the NOL carryforward portion of the DTA impact taxes paid in 2010 and 2011? NOLS of $391 million at 12/31/09 There is likely to be little or no benefit in 2010 since CapitalSource Bank has no remaining NOLs, though losses in other entities will generally add to NOLs for those entities CapitalSource expects to be able to consolidate tax entities for 2011, so future income in one entity (e.g. CapitalSource Bank) can be offset against losses in other entities Data as of March 31, 2010, except for NOLS which are only reported annually KBW Diversified Financial Services Conference June 2, 2010 p. 26

27 Funding and Liquidity 2009 Actions Strengthen Profile KBW Diversified Financial Services Conference June 2, 2010 p. 27

28 Funding & Liabilities Total Debt and Deposits ($ in millions) 3/31/10 Balance % of Total 12/31/09 Balance % of Total r Deposits $4, % $4, % $99 Non-Recourse Debt Structured Facilities % % ($34) Securitizations 2, % 2, % ($277) FHLB Debt % % $25 Mortgage Debt % % ($2) Other 3 0.0% 3 0.0% $0 Total Non-Recourse Debt from Continuing Operations Total Non-Recourse Debt from Discontinued Operations Recourse Debt $3, % $3, % ($288) $ % $ % ($1) Syndicated Bank Credit Facility (1) % % ($100) Convertible Debt % % ($16) Trust Preferred Securities % % ($2) Senior Secured Notes (2) % % $1 Total Recourse Debt $1, % $1, % ($117) Total Debt $4, % $5, % ($406) 70% of debt is non-recourse and utilized to fund discrete asset pools $406 million total debt reduction in Q Significant retail deposit base provides cost-effective funding not subject to volatility of the capital markets net inflow of $99 million in 1Q 10 Trust preferred securities have long dated maturities with advantageous funding cost (L+195bps) Total Debt and Deposits $9,348 $9,655 ($307) Data as of March 31, 2010 (1) Balance excludes $50 million and $56 million of outstanding Letters of Credit as of 3/31/2010 and 12/31/2009 respectively. (2) Balance is net of discounts of $16 million and $17 million as of 3/31/2010 and 12/31/2009 respectively. KBW Diversified Financial Services Conference June 2, 2010 p. 28

29 Funding & Liabilities Substantial Debt Reduction Total debt reduced from $6.6 billion at 12/31/08 to $4.6 billion at 3/31/10 (30% reduction) $6,552 $6,149 $5,939 $5,503 $2,141 $1,925 $4,966 $1,828 $1,759 $1,534 Total Recourse Debt Total Non-Recourse Debt $4,561 $1,417 $4,411 $4,224 $4,111 $3,744 $3,432 $3,144 12/31/2008 3/31/2009 6/30/2009 9/30/ /31/2009 3/31/2010 Data as of March 31, Numbers exclude the RMIP portfolio and Discontinued Operations KBW Diversified Financial Services Conference June 2, 2010 p. 29

30 Funding & Liabilities Total Portfolio by Funding Source Securitizations Credit Facilities CapitalSource Bank $ % $ % $ % $ % Land $ % $ 25 1% $ 128 4% $ 461 6% 2nd Lien RE $ 14 0% $ 88 5% $ (0) 0% $ 102 1% CRE Other $ 273 9% $ 49 3% $ % $ % Resort/Club $ 133 4% $ 65 4% $ 302 9% $ 500 6% Time Share Rec & Other $ 232 7% $ 74 4% $ 271 8% $ 577 7% Mortgage Rediscount $ -31 1% $ -41 2% $ - 0% $ 72 1% Cash Flow $ % $ % $ % $ 2,488 31% Media $ 149-5% $ -78 5% $ 62 2% $ 289 4% HealthCare (inc RE) $ % $ % $ % $ 1,526 19% Asset Based $ % $ 83 5% $ % $ 1,068 13% Total Portfolio $ 3, % $ 1, % $ 3, % $ 8, % Total Data as of March 31, 2010 and Represents Principal Balance net of Charge-Offs KBW Diversified Financial Services Conference June 2, 2010 p. 30

31 2010 Outlook KBW Diversified Financial Services Conference June 2, 2010 p. 31

32 2010 Outlook - Drivers of Financial Performance Credit Asset Origination Cost of Funds Optimization of CapitalSource Bank Legacy loan portfolio reserves projected to be sufficient to cover future anticipated charge-offs in this static portfolio Elevated charge-offs are expected to continue for several quarters before total allowance for loan losses declines to a more normalized level Improving business and lending environment is allowing CapitalSource to add highly profitable assets 2010 quarterly funded new loan originations projected at $ million % higher than 2009 production levels Balance sheet migration to CapitalSource Bank is driving down overall cost of funds, thereby increasing margins Parent Company credit facilities are higher cost compared to deposits, but are paying down rapidly Grow total assets by adding high yielding loans and investments Managing deposit levels, CD profile and liquidity portfolio to lower cost of funds, increase investment yields and improve net interest margin Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 32

33 Investment Thesis and Key Differentiators Surviving the Credit Crisis and Thriving in its Aftermath KBW Diversified Financial Services Conference June 2, 2010 p. 33

34 CSE - Investment Thesis A viable and stable long-term business model is in place with a national asset origination platform and deposit funding at CapitalSource Bank High capital ratios at the Parent Company and CapitalSource Bank have been maintained despite credit charges $1.0 - $1.4 billion new funded loan production projected in 2010 Pre-provision earnings growth expected over the next 2-3 years, as CapitalSource Bank continues to make more high yielding loans Current level of reserves projected to be sufficient to cover all future anticipated charge-offs in the legacy portfolio By 2011, credit losses should return to more normalized levels There are no scheduled debt repayments for the remainder of 2010 A return to profitability is expected in 2010 both at the Bank and on a consolidated basis, though timing is dependent upon credit performance of the legacy loan portfolio Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 34

35 CapitalSource Strengths Support Investment Thesis Highly Valuable Commercial Lending Franchise A recognized leader in middle market lending with a bias toward specialization - particularly healthcare, technology, security and lender finance Uniquely positioned to capitalize on market dislocation Significantly expanding presence with new complimentary lending platforms Funding Virtually no funding risk for new loans originated at CapitalSource Bank access to deposits and fixed rate FHLB borrowing Strong funding profile for legacy loans Liquidity Parent Company cash of $282 million at 3/31/10 Significant liquidity at CapitalSource Bank to fund loan originations, including remaining repayment of the A Participation Interest during 2010 (6/1 balance of ~$200 million) Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 35

36 CapitalSource Strengths Support Investment Thesis High Capital Ratios Significant capital cushion to absorb losses throughout the credit cycle Valuable, fresh-start bank 17.35% risk-based capital ratio Conservative Leverage The Company has de-levered considerably since the end of x at 3/31/10 compared to 7.1x at 12/31/07 Strong Core Earnings Strong pre-provision earnings should continue to grow as excess liquidity at CapitalSource Bank is converted into profitable loans Disciplined underwriting process and well reserved credit book Credit Meaningful 1Q 10 decline in charge-offs, but elevated levels will continue through most of 2010 By 2011, credit losses should return to more normalized levels Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 36

37 Questions and Answers KBW Diversified Financial Services Conference June 2, 2010 p. 37

38 Appendix CapitalSource Bank Page Consolidated Credit Page Funding & Liabilities Page Donald Cole, CFO Bio Page KBW Diversified Financial Services Conference June 2, 2010 p. 38

39 CapitalSource Bank KBW Diversified Financial Services Conference June 2, 2010 p. 39

40 CapitalSource Bank Capital Ratios Compared to Other Banks Total Risk-Based Capital Ratio Tangible Common Equity/ Tangible Assets Regulatory well-capitalized threshold is 10% 17.35% 11.94% 14.91% 15.37% 4% is generally considered minimum requirement 13.49% 6.40% 7.21% 6.82% Banks $1-5B Assets Banks $5-10B Assets Banks >$10B Assets CapitalSource Bank Banks $1-5B Assets Banks $5-10B Assets Banks >$10B Assets CapitalSource Bank Data as of March 31, Source: SNL Financial. Banks used are those traded on the NYSE or NASDAQ. There are 166 banks with $1-5B in assets, 29 banks with $5-10B in assets, and 55 banks with>$10b in assets. KBW Diversified Financial Services Conference June 2, 2010 p. 40

41 CapitalSource Bank - CD Pricing and Maturity Trends Maturity Months Monthly deposit flow ($m) CD pricing 8.0 Weighted Average Remaining CD Maturity (Months) Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 $100 CD Pricing Trend Recent Deposit Inflows 4.0% $50 $0 3.0% ($50) ($100) ($150) ($200) Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Net Flow CSB Wtd Avg New & Renewed Deposit COF 2.0% 1.0% 0.0% CapitalSource Bank data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 41

42 CapitalSource Bank Loyal Depositors in a Deposit Rich Market Tenure (Customer Since) (1) % % ~60% of depositors have been customers of CapitalSource Bank since 2005 or before (1) % % % % Pre-03 29% % % California has 12% of U.S. retail deposits, the highest of any state Average deposit balance of ~$50,000 per account and ~$90,000 per household Est. 95% of accounts are FDIC insured under current limits CapitalSource Bank data as of March 31, 2010 (1) Includes customer history acquired from Fremont Investment & Loan KBW Diversified Financial Services Conference June 2, 2010 p. 42

43 CapitalSource Bank Reliable Funding Capacity Term Deposits 3/31/2010 (in millions) Balance (by Household) 7-12m 44% Other 15% 4-6m 20% Liquid 21% Amounts WAIR (%) Liquid $ Term deposits: 3 mo , , $100k - 249k 44% $250k - 499k 20% $25k - 99k 24% $500k+ 9% <$25k 3% Total Deposits $4, CDs are 79% of retail deposits. Liquid accounts are 21% Weighted average remaining duration increased from 3.9 months at 3/31/09 to 7.0 months at 3/31/10 Ability to significantly grow deposits with existing capacity - $8.5 billion in deposits at peak (May 2007) CapitalSource Bank data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 43

44 CapitalSource Bank 1Q 10 Credit Compared to 4Q 09 CapitalSource Bank: Core Loan Portfolio (1) ~$3.2 billion loans Impaired Loans $366 million (2) 11.4% of core loans 83% are current 1Q 10 4Q 09 $191 million 6.2% of core loans days delinquent $1 million (3) 0.02% of core loans $28 million 0.92% of core loans 90+ days delinquent $62 million (4) 1.93% of core loans $103 million 3.34% of core loans Charge-offs $18 million 4.13% of TTM average core loans $24 million 3.98% of TTM average core loans Loan loss provision $88 million $49 million Total Allowance for Loan Loss $222 million 6.92% of core loans $153 million 4.96% of core loans Data as of March 31, 2010 (1) Excludes the A Participation Interest. Includes $1.95 billion of loans purchased from the Parent Company at inception (2) Though 83% are current as to payment status, substantially all payments received are applied to loan principal balances (3) All day delinquencies were on non-accrual (4) All 90+ day delinquencies were on non-accrual KBW Diversified Financial Services Conference June 2, 2010 p. 44

45 Consolidated Credit KBW Diversified Financial Services Conference June 2, 2010 p. 45

46 Consolidated Credit - 1Q 10 Profile of Charge-Offs $119 million in commercial charge-offs 38% lower than 4Q 09 Charge-offs concentrated in commercial real estate (62% of total) Quarterly Commercial Charge-Offs ($ millions) $181 $167 $191 $119 $135 $119 $82 $14 $28 $6 $5 $23 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 46

47 Consolidated Credit 1Q 10 Analysis by Asset Class Portfolio Non-Accrual All Delinquencies Impaired Reserves 1Q Charge-Offs % of % of % of % of % of % of % of 1Q ($ in millions) Loans Balance Loans Balance Portfolio Loans Balance Portfolio Loans Balance Portfolio Specific General Total Portfolio Non- Delinqu Amount Total Land 15 $ $ % 12 $ % 12 $ % $ 43.7 $ 88.6 $ % 58.7% 53.9% $ % 2nd Lien RE 11 $ $ % 3 $ % 4 $ % $ 12.9 $ 23.4 $ % 116.5% 679.8% $ % CRE Other 209 $ $ % 11 $ % 22 $ % $ 85.4 $ 44.0 $ % 29.7% 85.2% $ % Resort/Club 6 $ $ % 3 $ % 1 $ % $ 5.4 $ 72.0 $ % 155.7% 155.7% $ % Time Share Rec. & Other 29 $ $ - 0.0% 1 $ % 0 $ - 0.0% $ - $ 51.6 $ % N/A % $ - 0.0% Mortgage Rediscount 12 $ $ % 8 $ % 10 $ % $ 0.5 $ 7.9 $ % 67.5% 86.2% $ % Cash Flow 465 $ 2, $ % 30 $ % 57 $ % $ 25.5 $ $ % 74.2% 128.6% $ % Media 46 $ $ % 4 $ % 10 $ % $ 10.4 $ 35.5 $ % 93.6% 232.2% $ % HealthCare (inc RE) 173 $ 1, $ % 4 $ % 13 $ % $ 4.4 $ 10.4 $ % 35.5% 54.0% $ % Asset Based 130 $ 1, $ % 14 $ % 23 $ % $ 3.5 $ 17.7 $ % 31.1% 39.3% $ % Total 1,096 $ 8, $ 1, % 90 $ % 152 $ 1, % $ $ $ % 60.2% 98.3% $ % Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 47

48 Consolidated Credit Overall Performance Trends CapitalSource Commercial ($ millions) (1) (2) 1Q08 2Q08 3Q08 4Q08 1Q09 2Q 09 3Q'09 4Q'09 1Q'10 4Q'09 1Q' Days Delinquent $109 $70 $44 $299 $126 $118 $132 $276 $261 ($15) % of Commercial Lending Assets 1.11% 0.74% 0.39% 2.76% 1.21% 1.19% 1.40% 3.12% 3.14% 0.02% 90+ Days Delinquent $58 $110 $190 $141 $292 $411 $396 $425 $437 $12 % of Commercial Lending Assets 0.59% 1.17% 1.72% 1.30% 2.80% 4.17% 4.21% 4.80% 5.24% 0.44% Loans on Non-accrual Status $175 $207 $264 $440 $615 $884 $994 $1,068 $1,140 $72 % of Commercial Lending Assets 1.79% 2.20% 2.39% 4.05% 5.90% 8.95% 10.58% 12.06% 13.69% 1.63% Impaired Loans $396 $509 $703 $692 $860 $1,202 $1,307 $1,250 $1,391 $141 % of Commercial Lending Assets 4.04% 5.40% 6.36% 6.38% 8.25% 12.16% 13.92% 14.12% 16.69% 2.57% Total Ending Allowance $137 $141 $164 $424 $445 $448 $517 $587 $686 $99 % of Commercial Lending Assets 1.40% 1.50% 1.48% 3.91% 4.27% 4.53% 5.51% 6.63% 8.24% 1.61% Trailing 12mo Charge-offs $54 $62 $117 $292 $408 $579 $645 $659 $655 ($4) % of Average Commercial Lending Assets 0.57% 0.66% 1.22% 2.89% 3.95% 5.40% 6.17% 6.63% 6.93% 0.30% Commercial Balances ($ millions) 1Q08 2Q08 3Q08 4Q08 1Q09 2Q 09 3Q'09 4Q'09 1Q'10 4Q'09 1Q'10 Ending Commercial Lending Assets $9,802 $9,427 $11,046 $10,852 $10,430 $9,885 $9,388 $8,852 $8,330 ($522) Quarterly Loan Charge-offs $5 $23 $82 $181 $119 $167 $135 $191 $119 ($72) Quarterly Provision for Loan Loss $3 $27 $105 $441 $141 $169 $204 $261 $219 ($42) Data as of March 31, 2010 (1) Total commercial lending assets include loans, loans held for sale and the A Participation Interest. (2) Percentage is calculated using the average commercial lending assets KBW Diversified Financial Services Conference June 2, 2010 p. 48

49 Consolidated Credit Portfolio Credit Trends Total Allowance % of Commercial Lending Assets 1.42% 1.40% 1.50% 1.48% 4.27% 4.53% 3.91% 5.51% 6.63% 8.24% Quarterly Provision for Commercial Loan Losses ($ in millions) $33 $3 $27 $105 $441 $141 $169 $204 $261 $219 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 Non-accrual Loans % of Commercial Lending Assets 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 Allowance for Loan Losses % of Non-accrual Loans 5.90% 8.95% 13.69% 12.06% 10.58% 81.5% 78.4% 68.1% 62.1% 96.4% 72.4% 50.6% 52.1% 55.0% 60.2% 4.05% 1.74% 1.78% 2.20% 2.39% 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 Data as of March 31, Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 KBW Diversified Financial Services Conference June 2, 2010 p. 49

50 Consolidated Credit Comparing 1Q 10 and 4Q 09 Net Troubled Loans 1Q 10 4Q 09 Commercial Loan Asset Classification ($ in thousands) Balance % of Commercial Lending Assets (1) Balance % of Commercial Lending Assets (1) Loans Days Delinquent $261, % $276, % Loans 90+ Days Delinquent $436, % $425, % Loans on Non-accrual $1,140, % $1,067, % Impaired Loans $1,390, % $1,250, % Less: loans in multiple categories ($1,661,248) ($1,673,856) Net Troubled Loans 1,567, % $1,345, % Data as of March 31, (1) Total commercial lending assets include loans, loans held for sale, the A Participation Interest and related accrued interest KBW Diversified Financial Services Conference June 2, 2010 p. 50

51 Consolidated Credit - Summary of 1Q 10 Non-Accrual and Impaired Loans ($ millions) Loans on Non-Accrual % of Total Impaired Loans % of Total Loans Days Delinquent $ % $ % Loans 90+ Days Delinquent $ % $ % Loans that are Current $ % $ % Total $1, % $1, % Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 51

52 Consolidated Credit 1Q 10 Profile of Delinquent Loans Loans Days Delinquent 30 Loans - $261.3M Loans 90+ Days Delinquent 60 Loans - $436.8 M Days Delinquent 18 on non-accrual (1) ($108.0M) 19 included in impaired loans $61.9M 6 Loans Days Delinquent $199.4 M 24 Loans 53 on non-accrual (1) ($402.1M) 56 loans included in impaired loans 23 real estate / mortgage rediscount loans account for 58.7% of total ($256.4M) 180+ Days Delinquent $348.2 M 46 Loans Days Delinquent $88.6 M 14 Loans Data as of March 31, 2010 (1) The delinquent loans for which we are still accruing interest are well secured, expected to be paid in full and in the process of collection KBW Diversified Financial Services Conference June 2, 2010 p. 52

53 Consolidated Credit 1Q 10 Profile of Non-Accrual Loans Loans on Non-Accrual 126 Loans - $1.1B Loans are 90+ Days Delinquent $402.1M 53 Loans Days Delinquent $107.9 M 18 Loans Drilling Down on Non-Accruals 14 of the 23 loans added to nonaccruals in 1Q 10 were current as of loans have specific reserves of $189.1M 5 largest loans are real estate ($280.0M) 45 real estate/mortgage rediscount loans account for 61.8% of the total dollar value ($704.2M) Loans are Current $630.0 M 55 Loans What is a Non-Accrual? We place loans on non-accrual status when we expect, based on judgment, that our borrower will not be able to fully meet its debt obligations Data as of March 31, 2010 KBW Diversified Financial Services Conference June 2, 2010 p. 53

54 Consolidated Credit 1Q 10 Profile of Impaired Loans Impaired Loans 152 Loans - $1.4B 90+ Days Delinquent $416.4 M 56 Loans Loans are Current $869.5 M 77 Loans Days Delinquent $104.7 M 19 Loans Drilling Down on Impaired Loans 19 of the 26 loans added to the impaired category in 1Q 10 were current at loans are on non-accrual ($1.1B) 59 loans are troubled debt restructurings (TDR s) ($481.9M) Loans involved in TDRs are also considered impaired for a period of at least one year following restructuring Gross charge-offs of $28.2M were taken against TDR loans this quarter 57 cash flow loans account for 24.9% of the dollar volume ($346.7M) 49 real estate loans account for 58.1% of the dollar volume ($808.5M) What is an Impaired Loan? We consider a loan to be impaired when, based on current information, we determine that it is probable that we will be unable to collect all amounts due according to the contractual terms of the original loan agreement Data as of March 31, 2010 Note: Impaired statistics exclude 2 non-accrual loans that are classified as held-for-sale KBW Diversified Financial Services Conference June 2, 2010 p. 54

55 Funding & Liabilities KBW Diversified Financial Services Conference June 2, 2010 p. 55

56 Funding & Liabilities Parent Company Securitizations Detail ($ millions) A A Total Loan Collateral (1) $131.8 $929.3 $1,026.0 $291.4 $462.5 $269.1 $3,110.2 Other Assets (2) $3.4 $28.9 $45.5 $18.0 $92.9 $3.7 $192.4 Debt Outstanding-Third Party Held $101.1 $804.4 $926.1 $282.1 $119.6 $164.2 $2,397.5 Debt Outstanding-CSE Held - $9.3 $ $133.5 CSE Junior Equity before Reserves (3) $34.1 $144.6 $21.1 $27.3 $435.8 $108.6 $771.5 GAAP Loan Loss Reserves $4.2 $49.5 $159.4 $25.1 $25.5 $20.7 $284.4 CSE Junior Net of Reserves (4) $29.9 $95.1 ($138.3) $2.2 $410.3 $87.9 $487.1 (5) (6) Number of Loans Collateral Distribution Land - - $ $ $ nd Lien - - $8.3 - $5.3 - $13.6 CRE Other - - $ $ $273.3 Resort/Club - - $ $ $133.1 Timeshare Rec. & Other $2.9 $39.6 $ $22.2 $23.8 $231.7 Mortgage Rediscount - - $ $4.2 - $31.4 CashFlow $28.6 $ $174.5 $8.4 $167.4 $902.4 Media $1.5 $ $ $26.1 $149.4 HealthCare (inc RE) $3.7 $63.9 $263.1 $1.6 $187.4 $13.5 $533.2 Asset Based $95.0 $237.3 $9.1 $58.5 $95.6 $38.3 $533.9 Total $131.7 $929.3 $1,026.0 $291.4 $462.5 $269.1 $3,110.1 Number of States Senior (7) $131.7 $829.4 $1,026.1 $228.1 $408.1 $201.9 $2,825.3 Subordinate $0.0 $99.9 $0.0 $63.3 $54.4 $67.2 $284.8 WA Remaining Term Pool Yield 9.12% 8.28% 6.71% 8.17% 6.98% 7.30% WA Spread 0.56% 0.56% 0.36% 0.36% 2.50% 1.75% Loan Data as of March 31, 2010 (1) Represents loan principal balance net of GAAP charge-offs. Excludes foreclosed-upon collateral. (2) Represents Cash, Foreclosed Assets, Deferred Financing Fees, and Other Assets net of Deferred Loan Fees and Other Liabilities (3) Represents CSE equity less ownership of outstanding debt tranches. (4) Excludes impact of cash earnings (interest received on loans less interest paid on debt) on junior noteholders and equity value (5) If the ($138.3) million of net equity in 2006-A resulted in that amount of losses on junior debt tranches, CSE would realize $60.8 million of that loss based on tranches of the debt previously repurchased. (6) Excluding 2006-A, CSE junior equity would be $625.4 million KBW Diversified Financial Services Conference June 2, 2010 p. 56 (7) Senior includes Senior B loans

57 Funding & Liabilities Parent Company Credit Facilities Detail ($ in Millions) Combined CSIII Facility (1) CSVII CS Europe Syndicated Facility Total Loan Collateral Size $115.6 $228.7 $323.4 $1,010.0 $1,677.7 Committed Capacity $31.0 $190.7 $115.1 $207.2 $544.0 Principal Outstanding $31.0 $111.5 $115.1 (2) $150.2 $407.8 Number of Loans Collateral Distribution Land $25.1 $25.1 2nd Lien RE $5.6 $4.0 - $78.7 $88.3 CRE Other $0.5 $2.4 - $45.7 $48.6 Resort/Club $10.3 $ $42.5 $64.6 Time Share Rec & Other $10.0 $ $31.5 $74.4 Mortgage Rediscount - $ $30.2 $40.6 Cash Flow $65.4 $95.0 $323.4 $335.6 $819.4 Media $9.7 $ $41.6 $78.2 HealthCare (inc RE) $7.4 $ $327.2 $356.1 Asset Based $6.7 $ $51.9 $82.4 Total $115.7 $228.7 $323.4 $1,010.0 $1,677.7 Number of States International 37 Senior (4) $102.4 $181.5 $24.0 $622.0 $929.9 Subordinate $13.2 $47.2 $299.4 $388.0 $747.8 Total $115.6 $228.7 $323.4 $1,010.0 $1,677.7 WA Remaining Term (Yrs) Maturity 5/29/2012 4/17/2012 5/6/2011 (3) 12/31/2011 Data as of March 31, 2010 (1) Combined facility comprised of aggregate loan assets from CS Funding III and from CSE QRS Funding I. (2) Net of issued and outstanding Letters of Credit totaling $50.1 million as of March 31, 2010 (3) The maturity date was extended effective May 7, 2010 with a commitment amount equal to the outstanding principal balance as of that date of 53,450,000 (4) Senior includes Senior B loans KBW Diversified Financial Services Conference June 2, 2010 p. 57

58 ($ in millions) Funding & Liabilities - Recourse Debt Maturities $600 $500 $400 $ % & 4.0% Convertible Debentures $200 $100 Syndicated Bank Facility 7.25% Convertible Debentures Senior Secured Notes Trust Preferred $ >2014 Data as of Balances are stated as gross principal balances before discounts KBW Diversified Financial Services Conference June 2, 2010 p. 58

59 Speaker Bio KBW Diversified Financial Services Conference June 2, 2010 p. 59

60 Donald F. Cole Donald F. Cole, age 39, has served as Chief Financial Officer since May 2009 and is a member of the CapitalSource Executive Management Committee. Don Cole Chief Financial Officer Mr. Cole joined CapitalSource in 2001 and has served in various capacities, including Chief Information Officer, Chief Operations Officer, Interim Chief Accounting Officer, and Chief Administrative Officer, before assuming his current role. Prior to joining CapitalSource, Mr. Cole practiced law at Covington & Burling, LLP from 2000 to Education J.D., University of Virginia Law School M.B.A., State University of New York at Buffalo Undergraduate, State University of New York at Buffalo Professional Affiliations Certified Public Accountant KBW Diversified Financial Services Conference June 2, 2010 p. 60