Glossary

“A” Participation Interest

The “A” Participation Interest was acquired as part of the asset and bank branch purchase made by CapitalSource from Fremont Investment & Loan in July 2008. The “A” Participation was acquired for $1.8 billion at 97% of par and bears interest at one-month LIBOR plus 150 basis points. The interest represents a 70% senior interest in a commercial real estate loan portfolio previously originated by Fremont Investment & Loan. CapitalSource Bank is entitled to receive 70% of all principal payments on the loans. Please view our most recent earnings release or 10Q / 10K for the most recent disclosures on the “A” Participation Interest.

“Buy” Recommendation

An analyst recommendation to purchase a stock, generally indicating that the stock should outperform other comparable stocks.

“Hold” Recommendation

The recommendation from an analyst that investors maintain their current position in a stock. This generally indicates that the stock should perform similarly to other comparable stocks.

“Sell” Recommendation

An analyst recommendation to sell a stock based on their research or knowledge of the sector, generally indicating that the stock should underperform other comparable stocks.

Accrual

Accounting for income or expenses as earned or incurred, even though they may not be received or actually paid in cash.

Adjusted Earnings

A calculation used by Real Estate Investment Trusts (REITs) in order to show earnings without deducting non-cash items such as real estate depreciation. Adjusted earnings is calculated taking net income as determined in accordance with U.S. generally accepted accounting principles (“GAAP”), and adjusting for certain items. CapitalSource will not report adjusted earnings after 4Q'08, since the Company revoked its REIT status as of January 1, 2009.

Allowance for Loan Losses

Management's estimate of probable losses inherent in the loan portfolio.

Amortization

Gradual reduction of an amount over time.

Analysts

Individuals working for a research or brokerage firm that make forecasts about a company's future earnings, revenues, growth rates, and stock price (price target) as well as overall recommendations regarding buying, selling, or holding a particular stock, based on their research on the company and their knowledge of the sector.

Asset-Based Loan

Loans secured by specified assets of a borrower, usually accounts receivable and/or inventory.