CapitalSource Inc. announced financial results for the first quarter of 2012. The Company reported net income for the quarter of $25 million compared to net income of $9 million in the prior quarter and net income of $3 million in the first quarter of 2011.

First Quarter 2012 Selected Highlights:

• Loans and Leases increased $194 million or 4%.
• Funded loan and lease production was $522 million, compared to $665 million in the prior quarter.
• Total loans and leases were $5.1 billion at quarter end versus $4.9 billion in the quarter ended December 31, 2011.
• Equipment Finance portfolio declined 5.4% from $441.8 million as of December 31, 2011 to $417.9 million for the period ending March 31, 2012.  Equipment Finance Portfolio was $276.0 million as of March 31, 2011.
• Credit Quality - Loan loss provision was $2 million, compared to $4 million in the prior quarter. There was a $0.1 million net recovery in the quarter, compared to $28 million net charge-offs in the prior quarter. Non-accrual loans declined by 31% to $83 million or 1.64% of loans at quarter end, compared to $121 million or 2.47% of loans at the end of the prior quarter. The allowance for loan and lease losses was $97 million or 1.94% of loans at quarter end, compared to $95 million or 1.98% of loans at the end of the prior quarter.

"Our financial performance in the first quarter exceeded our expectations and represents a solid beginning for 2012. CapitalSource Bank again demonstrated meaningful loan and revenue growth, a strong net interest margin and improved credit performance. Additionally, our strategy of consolidating operations has produced operating expense savings for the quarter consistent with our target of a 5-10% reduction from 2011, or total operating expense of $190-$200 million for the full year," said James J. Pieczynski, CapitalSource CEO.
 
"The new year is off to a great start at CapitalSource Bank – compared to the prior quarter, total interest income increased 4% to $99 million, net interest margin was 17 basis points higher at 5.12%, our loan and lease portfolio grew by $194 million or 4%, and pretax income was 17% above the prior quarter at $55 million," said Tad Lowrey, CapitalSource Bank CEO. "In addition to our growing profitability, we continue to add new deposits at very attractive rates. Deposits grew $224 million in the first quarter, bringing total deposits to $5.3 billion, while our total deposit cost declined by five basis points from the prior quarter. New and renewing time deposits in the first quarter averaged just 91 basis points," concluded Lowrey.

To read the full press release and earnings report, click here.