The Company wishes to continue to make clear that FIL has NOT filed for bankruptcy and was not included as part of the Company's bankruptcy filing. FIL continues to operate its business in the normal course. The bankruptcy filing by the Company does not impact the banking operations of FIL or affect its Federal Deposit Insurance Corporation ("FDIC") insurance of deposit accounts, which continue to the fullest extent provided by law.

About Fremont General

Fremont General Corporation is a financial services holding company with $8.8 billion in total assets, at September 30, 2007. The Company is engaged in deposit gathering through a retail branch network located in the coastal and Central Valley regions of Southern California through its wholly-owned bank subsidiary, Fremont Investment & Loan. Fremont Investment & Loan funds its operations primarily through deposit accounts sourced through its 22 retail banking branches which are insured up to the maximum legal limit by the FDIC.

The Retail Banking Division of the Bank continues to offer a variety of savings and money market products as well as certificates of deposits across its 22 branch network. Customer deposits remain fully insured by the FDIC up to at least $100,000 and retirement accounts remain insured separately up to an additional $250,000.

To find out more about Fremont General, or to subscribe to the Company's email alert feature for notification of Company news and events, please visit http://www.fremontgeneral.com.

Regulatory Filings

The Company's periodic reports as filed with the Securities and Exchange Commission ("SEC") can be accessed at http://www.fremontgeneral.com and on the EDGAR's section of the SEC's website at http://www.sec.gov.

Forward-Looking Statements

This news release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon current expectations and beliefs of the Company and its subsidiaries. These statements and the Company's reported results herein are not guarantees of future performance or results and there can be no assurance that actual developments and economic performance will be those anticipated by the Company. Actual developments and/or results may differ significantly and adversely from historical results and those anticipated by the Company for the fiscal year ending December 31, 2008 as a result of various factors which are set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2006, Quarterly Reports on Form 10-Q, and its reports on Form 8-K and other documents filed by the Company with the SEC from time to time. The Company does not undertake to update or revise forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made, except as required under applicable securities laws.

SOURCE Fremont General Corporation

http://www.fremontgeneral.com

CapitalSource Healthcare REIT is a carve-out of CapitalSource's healthcare net lease segment and will be managed by CapitalSource. Following the IPO, CapitalSource will continue to own the majority of CapitalSource Healthcare REIT.

The REIT will invest in income producing healthcare-related facilities, principally long-term skilled nursing facilities, through triple-net lease structures.

Chevy Chase, Maryland-based CapitalSource is a commercial lending, investment and asset management business focused on the middle market. CapitalSource manages an asset portfolio, which as of March 31 was around $19.85 billion.

FinancialWire" is a fully independent, proprietary news wire service of Investrend Information (a division of Investrend Communications, Inc.). FinancialWire" news is written by professional journalists, dedicated to pure journalistic standards. FinancialWire" does not receive or accept any compensation from any individual or subject company (or representative thereof) for its news or opinions. All FinancialWire" news is available at http://www.financialwire.net . Please address any inquiries to feedback@financialwire.net .

Free annual reports for companies mentioned in the news are available at http://investrend.ar.wilink.com/?level=279 .

http://www.financialwire.net

"The renewal of two bank credit facilities in recent days secures important funding capacity. We were able to complete these renewals based upon the strength and quality of our business franchise," said Thomas A. Fink, CapitalSource Chief Financial Officer. "The performance of our core commercial finance business improved this quarter with increased loan yield relative to our benchmark of 30-day LIBOR, lower operating expenses as a percentage of assets, and increased Adjusted Return on Equity at 23.9%. Adjusted Earnings on a consolidated basis were negatively impacted by the sale of Agency securities in our residential mortgage investment portfolio," added Fink.

    Assets Under Management
    -- Assets under management were approximately $19.85 billion as of March
       31, 2008, a decrease of $1.03 billion from the prior quarter, primarily
       due an $813 million reduction in the Company's residential mortgage
       portfolio to $5.3 billion. During the quarter ended March 31, 2008, the
       Company sold approximately $591 million in Agency MBS and subsequent to
       quarter-end completed an additional $1.5 billion in Agency MBS sales.

    Commercial Finance Segment
    -- Total commercial loans were approximately $9.8 billion at quarter end,
       a decrease of approximately $108 million from the prior quarter, as
       loan runoff outpaced loan growth.

    -- Net investment income was $144.4 million for the quarter, a decrease of
       $1.8 million from the prior quarter, primarily due to lower interest
       and prepayment-related fee income, partially offset by lower interest
       expense.

    -- Interest income was $224.4 million for the quarter, a decrease of $18.2
       million from the prior quarter, directionally consistent with the
       decrease in LIBOR and prime rates during the quarter.

    -- Yield on average interest-earning assets was 10.26% for the quarter, a
       decrease of 86 basis points from the prior quarter.  The decrease was
       primarily due to a decrease in the average coupon rate of interest
       charged on loans (resulting from the decrease in LIBOR and prime rates
       during the quarter) and a decrease in prepayment-related fee income,
       partially offset by an increased core lending spread.

    -- Core lending spread, defined as loan yield less prepayment-related fee
       income and average 30-day LIBOR, was 7.12%, an increase of 99 basis
       points compared to the prior quarter.

    -- Prepayment-related fee income was $3.5 million for the quarter and
       contributed 14 basis points to yield, a decrease of $8.9 million or 35
       basis points in contribution to yield from the prior quarter.

    -- Provision for loan losses was $3.0 million for the quarter, bringing
       the total allowance for loan losses to $136.7 million, or 1.27% of
       total commercial assets, a decrease of 1 basis point from the prior
       quarter.

    -- Cost of funds was 5.45% for the quarter, a decrease of 99 basis points
       from the prior quarter primarily due to declining interest rates.
       Overall borrowing spread to average one-month LIBOR was 2.15%, an
       increase of 62 basis points from the prior quarter, primarily due to
       short-term funding market volatility and greater amortization of
       deferred financing fees.

    -- Leverage, as measured by the ratio of total debt-to-equity at the end
       of the quarter, was 4.37x, a decrease from 4.39x at the end of the
       prior quarter.

    -- Net finance margin, defined as net investment income divided by average
       interest-earning assets, was 5.74% for the quarter, a decrease of 5
       basis points from the prior quarter, primarily due to a decrease in
       yield on average interest-earning assets partially offset by lower
       borrowing costs.

    -- Adjusted earnings contributed by the Commercial Finance segment was
       $113.5 million ($0.51 per diluted share), an increase of 28.3% compared
       to $88.5 million in the prior quarter.

    Commercial Credit Metrics
    -- Loans on non-accrual status, which the Company considers its primary
       credit metric, increased by 5 basis points from the prior quarter to
       1.62% of commercial assets, below the average of 1.64% in the prior
       four quarters.

    -- Loans 60 or more days contractually delinquent increased 1 basis point
       from the prior quarter to 0.69% of commercial assets, below the average
       of 0.77% in the prior four quarters.

    -- Net charge-offs were $5.2 million, a decrease of $0.7 million from the
       prior quarter.  As a percentage of average commercial assets,
       annualized net charge-offs for the quarter were 22 basis points,
       unchanged from the prior quarter.

    -- Allowance for loan losses was $136.7 million, a decrease of $2.2
       million from the prior quarter.  As a percentage of commercial loans at
       quarter end, loan loss reserves were 1.40%, a decrease of 1 basis point
       from the prior quarter.

    Healthcare Net Lease Segment
    -- Direct real estate investments were consistent with the prior quarter
       at approximately $1.02 billion, decreasing $0.6 million from the prior
       quarter due primarily to depreciation, partially offset by the purchase
       of one property.

    -- Operating lease income was approximately $27.7 million for the quarter,
       an increase of $0.6 million from the prior quarter.

    -- Adjusted earnings contributed by the Healthcare Net Lease segment was
       approximately $13.9 million ($0.06 per diluted share), an increase of
       6.9% compared to $13.0 million in the prior quarter.

    Consolidated Other Income
    -- Gain (loss) on investments, net was $1.1 million in the first quarter,
       improved from a loss of ($0.2) million in the prior quarter primarily
       due to realized gains of $1.9 million on certain cost based investments
       and dividends received of $1.0 million, partially offset by write-downs
       of $2.2 million on other cost based investments.

    -- Other (expense) income, net was ($4.7) million compared to $4.3 million
       in the prior quarter, primarily due to foreign currency losses
       partially offset by gains on asset sales and third party management
       fees.

    -- Loss on the residential mortgage investment portfolio was $55.4 million
       or 105 basis points of the portfolio, compared to $25.4 million in the
       prior quarter, primarily due to the net change in fair value of Agency
       MBS and related derivatives. In Adjusted Earnings for the quarter, the
       Company realized a loss of $28.0 million related to the residential
       mortgage investment portfolio, primarily due to a $20.6 million
       realized loss as a result of the sale of Agency MBS during the quarter.

    -- Loss on derivatives was $38.1 million, compared to $31.6 million in the
       prior quarter.  These net unrealized losses were primarily due to the
       unrealized net change in the fair value of interest rate swaps used in
       hedging certain assets and liabilities to minimize the Company's
       exposure to interest rate movements.  Hedge accounting is not applied
       to these interest rate swaps.  As a result, movements in the net fair
       value of hedging instruments are reported in Other (Expense) Income,
       while changes in the fair value of hedged exposures are not.

    Funding and Liquidity
    -- During the quarter, the Company raised $169.3 million through the
       issuance of approximately 14.06 million shares of common stock under
       its Dividend Reinvestment and Stock Purchase Plan (DRIP).

    -- Following the quarter end, the Company renewed two credit facilities
       with five participating lenders totaling approximately $1.2 billion,
       including:
       -- A $1 billion facility to finance real estate loans and real estate-
          related asset based loans was renewed on April 25, 2008 and matures
          on April 23, 2010.
       -- A $220 million facility to finance commercial loans was renewed on
          April 30, 2008 and matures on April 29, 2009.
    -- Total committed credit facility capacity at April 30, 2008 was $4.6
       billion.

    Operating Expenses
    -- Operating expenses as a percentage of average total assets declined in
       the quarter to 1.51%, an improvement of 7 basis points from 4Q '07.
       Head count of 535 at March 31, 2008 was down from 562 at December 31,
       2007.

    Income Tax Rate
    -- The overall effective tax rate in the quarter, expressed as a
       percentage of consolidated pre-tax GAAP net income, was 31.2%.

    Adjusted Return on Equity
    -- Consolidated adjusted return on average equity, defined as Adjusted
       Earnings divided by average GAAP equity, was 16.48% for the quarter, an
       increase of 13 basis points from the prior quarter.  The accompanying
       Financial Supplement provides a detailed reconciliation of GAAP net
       income to Adjusted Earnings.

    Share Count
    -- Weighted average shares outstanding, dilutive to Adjusted Earnings,
       were 221.5 million shares for the quarter ended March 31, 2008,
       compared to 211.6 million shares at the end of the prior quarter.

    Dividends
    -- A regular quarterly cash dividend of $0.60 per common share was paid on
       March 31, 2008 to common shareholders of record as of March 17, 2008.

CapitalSource will hold an analyst and investor conference call with a simultaneous webcast on May 6, 2008 at 8:30 a.m. (Eastern Time) to discuss the Company's first quarter 2008 results. To participate, analysts and investors may call (888) 713-4209 from within United States or (617) 213-4863 from outside the United States, utilizing the pass code 70731217. Other interested parties may access a webcast of the conference call at the Investor Relations section of the CapitalSource website at www.capitalsource.com.

A telephonic replay will be available from approximately 10:30 a.m. (Eastern Time) on May 6, 2008 through May 13, 2008. Please call (888) 286- 8010 from the United States or (617) 801-6888 from outside the United States with the pass code 48893891. An audio replay will also be available on the Investor Relations section of the CapitalSource website. A transcript of the earnings conference call will also be posted to the Investor Relations section of the CapitalSource website on May 6, 2008.

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 March 31, 2008 was approximately $19.85 billion. Headquartered in Chevy Chase, Maryland, the Company had 535 employees as of March 31, 2008 in offices across the U.S. and in Europe.

For more information, visit http://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 our proposed bank formation and asset purchase and liability assumption, 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," "assume," "believe," "expect," "estimate," "plan," "will," "look forward," and similar expressions are generally intended to identify forward-looking statements. All forward-looking statements (including statements regarding 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: the proposed bank transaction, including the asset purchase and liability assumption, may not be approved by the regulators or completed on the proposed terms and schedule or at all; changes in economic conditions; continued disruptions in credit and other markets; 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 2007 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 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)
                               ($ in thousands)

                                           March 31, December 31,    March 31,
                                               2008         2007         2007

                                    ASSETS
    Cash and cash equivalents              $270,789     $178,699     $308,770
    Restricted cash                         527,258      513,803      135,550
    Mortgage-related receivables, net     1,978,852    2,041,917    2,239,257
    Mortgage-backed securities pledged,
     trading                              3,310,176    4,060,605    3,372,329
    Receivables under reverse-
     repurchase agreements                        -            -       26,315
    Loans held for sale                      37,989       94,327      156,650
    Loans:
      Loans                               9,721,333    9,773,410    8,455,570
      Less deferred loan fees and
       discounts                           (151,291)    (147,089)    (124,380)
      Less allowance for loan losses       (136,745)    (138,930)    (125,236)
      Loans, net                          9,433,297    9,487,391    8,205,954
    Direct real estate investments, net   1,016,972    1,017,604      805,650
    Investments                             270,481      231,776      185,710
    Other assets                            855,624      414,227      228,148
    Total assets                        $17,701,438  $18,040,349  $15,664,333


        LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY
    Liabilities:
      Repurchase agreements              $3,427,856   $3,910,027   $3,309,559
      Credit facilities                   2,373,106    2,207,063    3,137,838
      Term debt                           7,021,686    7,255,675    5,423,317
      Other borrowings                    1,574,994    1,594,870    1,327,635
      Other liabilities                     605,586      444,997      202,852
      Total liabilities                  15,003,228   15,412,632   13,401,201

    Noncontrolling interests                 43,938       45,446       44,797

    Shareholders' equity:
      Preferred stock (50,000,000
       shares authorized; no shares
       outstanding)                               -            -            -
      Common stock ($0.01 par value,
       500,000,000 shares authorized;
       234,844,241, 220,704,800 and
       189,538,383 shares issued,
       respectively; 234,844,241,
       220,704,800 and 188,238,383
       shares outstanding,
       respectively)                          2,348        2,207        1,882
      Additional paid-in capital          3,097,310    2,902,501    2,302,393
      Accumulated deficit                  (455,041)    (327,387)     (56,067)
      Accumulated other comprehensive
       income, net                            9,655        4,950           53
      Treasury stock, at cost                     -            -      (29,926)
      Total shareholders' equity          2,654,272    2,582,271    2,218,335
      Total liabilities, noncontrolling
       interests and shareholders'
       equity                           $17,701,438  $18,040,349  $15,664,333



                              CapitalSource Inc.
                      Consolidated Statements of Income
                                 (Unaudited)
                   ($ in thousands, except per share data)

                                                   Three Months Ended
                                           March 31, December 31,    March 31,
                                               2008         2007         2007
    Net investment income:
      Interest income                      $308,325     $333,122     $289,554
      Fee income                             33,641       37,974       50,027
      Total interest and fee income         341,966      371,096      339,581
      Operating lease income                 27,690       27,079       20,288
      Total investment income               369,656      398,175      359,869
      Interest expense                      188,945      227,547      186,649
      Net investment income                 180,711      170,628      173,220
      Provision for loan losses               5,659       33,952       14,926
      Net investment income after
       provision for loan losses            175,052      136,676      158,294

    Operating expenses:
      Compensation and benefits              31,789       40,818       40,014
      Depreciation of direct real
       estate investments                     8,916        8,924        6,762
      Other administrative expenses          26,804       21,351       18,546
    Total operating expenses                 67,509       71,093       65,322

    Other (expense) income:
      Diligence deposits forfeited              647          681          862
      Gain (loss) on investments,
       net                                    1,141         (195)       6,163
      Loss on derivatives                   (38,111)     (31,554)      (2,255)
      Loss on residential mortgage
       investment portfolio                 (55,377)     (25,395)      (5,698)
      Other (expense) income, net            (4,699)       4,312        6,977
      Total other (expense) income          (96,399)     (52,151)       6,049

    Noncontrolling interests expense          1,297        1,154        1,330

    Net income before income taxes            9,847       12,278       97,691
      Income taxes                            3,076       27,312       19,001
    Net income (loss)                        $6,771     $(15,034)     $78,690

    Net income (loss) per share:
      Basic                                   $0.03       $(0.07)       $0.44
      Diluted                                 $0.03       $(0.07)       $0.43

    Average shares outstanding:
      Basic                             220,085,148  210,021,621  179,324,672
      Diluted                           221,493,514  210,021,621  181,743,884

    Dividends declared per share              $0.60        $0.60        $0.58



                              CapitalSource Inc.
                                 Segment Data
                                 (Unaudited)
                               ($ in thousands)

                                      Three Months Ended March 31, 2008
                                                      Residential
                               Commercial  Healthcare   Mortgage  Consolidated
                                 Finance    Net Lease  Investment       Total
    Net investment income:
      Interest income            $224,383      $482      $83,460     $308,325
      Fee income                   33,630        11            -       33,641
      Total interest and
       fee income                 258,013       493       83,460      341,966
      Operating lease income            -    27,690            -       27,690
      Total investment income     258,013    28,183       83,460      369,656
      Interest expense            113,643    10,796       64,506      188,945
    Net investment income         144,370    17,387       18,954      180,711
    Provision for loan losses       2,971         -        2,688        5,659
    Net investment income after
     provision for loan losses    141,399    17,387       16,266      175,052

    Other operating expenses       53,137    11,173        3,199       67,509

    Total other (expense) income  (39,757)        -      (56,642)     (96,399)

    Noncontrolling interests
     expense                         (117)    1,414            -        1,297

    Net income (loss) before
     income taxes                  48,622     4,800      (43,575)       9,847
      Income taxes                  3,076         -            -        3,076
    Net income (loss)             $45,546    $4,800     $(43,575)      $6,771



                                     Three Months Ended December 31, 2007

                                                      Residential
                               Commercial  Healthcare   Mortgage  Consolidated
                                 Finance    Net Lease  Investment       Total
    Net investment income:
      Interest income            $242,550      $581      $89,991     $333,122
      Fee income                   37,974         -            -       37,974
      Total interest and
       fee income                 280,524       581       89,991      371,096
      Operating lease income            -    27,079            -       27,079
      Total investment income     280,524    27,660       89,991      398,175
      Interest expense            134,395    10,891       82,261      227,547
    Net investment income         146,129    16,769        7,730      170,628
    Provision for loan losses      33,302         -          650       33,952
    Net investment income after
     provision for loan losses    112,827    16,769        7,080      136,676

    Other operating expenses       57,502    11,921        1,670       71,093

    Total other (expense)
     income                       (27,612)      856      (25,395)     (52,151)

    Noncontrolling interests
     expense                         (304)    1,458            -        1,154

    Net income (loss) before
     income taxes                  28,017     4,246      (19,985)      12,278
      Income taxes                 27,312         -            -       27,312
    Net income (loss)                $705    $4,246     $(19,985)    $(15,034)



                                    Three Months Ended March 31, 2007 (1)

                                                      Residential
                               Commercial  Healthcare   Mortgage  Consolidated
                                 Finance    Net Lease  Investment       Total

    Net investment income:
      Interest income            $208,558       $96      $80,900     $289,554
      Fee income                   50,027         -            -       50,027
      Total interest and
       fee income                 258,585        96       80,900      339,581
      Operating lease income            -    20,288            -       20,288
      Total investment income     258,585    20,384       80,900      359,869
      Interest expense            102,763     8,488       75,398      186,649
    Net investment income         155,822    11,896        5,502      173,220
    Provision for loan losses      14,926         -            -       14,926
    Net investment income after
     provision for loan losses    140,896    11,896        5,502      158,294

    Other operating expenses       55,184     9,037        1,101       65,322

    Total other income (expense)   11,747         -       (5,698)       6,049

    Noncontrolling interests
     expense                         (271)    1,601            -        1,330

    Net income (loss) before
     income taxes                  97,730     1,258       (1,297)      97,691
      Income taxes                 19,001         -            -       19,001
    Net income (loss)             $78,729    $1,258      $(1,297)     $78,690


    (1) Beginning with our fourth quarter 2007 results, the Company
        initiated the separate reporting of its Healthcare Net Lease segment
        due to the significant growth and development of this business.  The
        Healthcare Net Lease segment is similar to other publicly traded
        healthcare property REITs and is in the business of investing in
        income-producing healthcare facilities, principally long-term care
        facilities.  CapitalSource has reclassified comparative segment
        information for the quarter ended March 31, 2007 to reflect the
        separate reporting of the  Healthcare Net Lease segment.



                              CapitalSource Inc.
                              Adjusted Earnings
                                 (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 items, including real estate depreciation, amortization of deferred financing fees, non-cash equity compensation, certain realized and unrealized gains and losses on residential mortgage investments held in our portfolio as of the balance sheet date 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.

                              CapitalSource Inc.
                      Adjusted Earnings Reconciliations
                                 (Unaudited)
                   ($ in thousands, except per share data)

    Reconciliation of our reported net income to adjusted earnings for the
    three months ended March 31, 2008, December 31, 2007 and March 31, 2007,
    were as follows:

                                                   Three Months Ended
                                           March 31, December 31,    March 31,
                                               2008         2007         2007

    Net income (loss)                        $6,771     $(15,034)     $78,690
      Add:
        Real estate depreciation and
         amortization (1)                     8,760        8,557        6,762
        Amortization of deferred
         financing fees (2)                  11,953        9,961        5,508
        Non-cash equity compensation          6,514       12,581       10,712
        Net realized and unrealized losses
         on residential mortgage investment
         portfolio including related
         derivatives (3)                     27,394       25,571        7,180
        Unrealized loss on derivatives and
         foreign currencies, net             47,634       35,728          328
        Unrealized loss on investments,
         net                                  4,657        2,946           47
        Provision for loan losses             5,659       33,952       14,926
        Recoveries (4)                            -            -            -
      Less:
        Charge offs                           6,076        6,008       10,250
        Non-recurring items                       -            -            -
        Adjusted earnings                  $113,266     $108,254     $113,903

    Net income (loss) per share:
      Basic - as reported                     $0.03       $(0.07)       $0.44
      Diluted - as reported                   $0.03       $(0.07)       $0.43

    Average shares outstanding:
      Basic - as reported               220,085,148  210,021,621  179,324,672
      Diluted - as reported             221,493,514  210,021,621  181,743,884

    Adjusted earnings per share:
      Basic                                   $0.51        $0.52        $0.64
      Diluted (5)                             $0.51        $0.51        $0.63

    Average shares outstanding:
      Basic                             220,085,148  210,021,621  179,324,672
      Diluted (6)                       221,493,514  211,609,633  184,200,063

    (1) Depreciation and amortization for direct real estate investments only.
        Excludes depreciation for corporate leasehold improvements, fixed
        assets and other non-real estate items.
    (2) Includes amortization of deferred financing fees and other non-cash
        interest expense.
    (3) Includes adjustments to reflect certain realized and unrealized gains
        and losses on residential mortgage investments held in our portfolio
        as of the balance sheet date and related derivative instruments.
    (4) Includes all recoveries on loans during the period.
    (5) Adjusted to reflect the impact of adding back noncontrolling interests
        expense of $1.3 million for the three months ended March 31, 2007, to
        adjusted earnings due to the application of the if-converted method on
        non-managing member units, which are considered dilutive to adjusted
        earnings per share, but are antidilutive to GAAP net income per share
        for this period.
    (6) Adjusted to include average non-managing member units of 2,456,179 for
        the three months ended March 31, 2007, which are considered dilutive
        to adjusted earnings per share, but are antidilutive to GAAP net
        income per share for this period.



                              CapitalSource Inc.
                      Adjusted Earnings Reconciliations
                                 (Unaudited)
                   ($ in thousands, except per share data)

    For our Commercial Finance segment, Healthcare Net Lease segment and
    Residential Mortgage segment, reconciliations of reported net income to
    adjusted earnings for the three months ended March 31, 2008 and
    December 31, 2007, were as follows:

                                   Three Months Ended March 31, 2008
                                                     Residential
                           Commercial   Healthcare    Mortgage   Consolidated
                             Finance     Net Lease   Investment      Total

    Net income (loss)        $45,546       $4,800     $(43,575)      $6,771
      Add:
        Real estate
         depreciation and
         amortization (1)          -        8,760            -        8,760
        Amortization of
         deferred financing
         fees (2)             11,316          312          325       11,953
        Non-cash equity
         compensation          6,514            -            -        6,514
        Net realized and
         unrealized losses
         on residential
         mortgage investment
         portfolio including
         related
         derivatives (3)           -            -       27,394       27,394
        Unrealized loss on
         derivatives and
         foreign currencies,
         net                  47,634            -            -       47,634
        Unrealized loss on
         investments, net      4,657            -            -        4,657
        Provision for loan
         losses                2,971            -        2,688        5,659
        Recoveries (4)             -            -            -            -
      Less:
        Charge offs            5,155            -          921        6,076
        Non-recurring items        -            -            -            -
    Adjusted earnings       $113,483      $13,872     $(14,089)    $113,266

    Net income per share:
      Basic - as reported      $0.21        $0.02       $(0.20)       $0.03
      Diluted - as
       reported                $0.21        $0.02       $(0.20)       $0.03

    Average shares
     outstanding:
      Basic - as
       reported          220,085,148  220,085,148  220,085,148  220,085,148
      Diluted - as
       reported          221,493,514  221,493,514  221,493,514  221,493,514

    Adjusted earnings per
     share:
      Basic                    $0.51        $0.06       $(0.06)       $0.51
      Diluted                  $0.51        $0.06       $(0.06)       $0.51

    Average shares
     outstanding:
      Basic              220,085,148  220,085,148  220,085,148  220,085,148
      Diluted            221,493,514  221,493,514  221,493,514  221,493,514


                                  Three Months Ended December 31, 2007
                                                     Residential
                           Commercial   Healthcare    Mortgage   Consolidated
                             Finance     Net Lease   Investment      Total

    Net income (loss)           $706       $4,245     $(19,985)    $(15,034)
      Add:
        Real estate
         depreciation and
         amortization (1)          -        8,557            -        8,557
        Amortization of
         deferred financing
         fees (2)              9,007          172          782        9,961
        Non-cash equity
         compensation         12,581            -            -       12,581
        Net realized and
         unrealized losses
         on residential
         mortgage investment
         portfolio including
         related
         derivatives (3)           -            -       25,571       25,571
        Unrealized loss on
         derivatives and
         foreign currencies,
         net                  35,728            -            -       35,728
        Unrealized loss on
         investments, net      2,946            -            -        2,946
        Provision for loan
         losses               33,302            -          650       33,952
        Recoveries (4)             -            -            -            -
      Less:
        Charge offs            5,818            -          190        6,008
        Non-recurring items        -            -            -            -
    Adjusted earnings        $88,452      $12,974       $6,828     $108,254

    Net income per share:
      Basic - as reported      $0.00        $0.02       $(0.09)      $(0.07)
      Diluted - as
       reported                $0.00        $0.02       $(0.09)      $(0.07)

    Average shares
     outstanding:
      Basic - as
       reported          210,021,621  210,021,621  210,021,621  210,021,621
      Diluted - as
       reported          210,021,621  210,021,621  210,021,621  210,021,621

    Adjusted earnings per
     share:
      Basic                    $0.42        $0.06        $0.04        $0.51
      Diluted                  $0.42        $0.06        $0.03        $0.51

    Average shares
     outstanding:
      Basic              210,021,621  210,021,621  210,021,621  210,021,621
      Diluted            211,609,633  211,609,633  211,609,633  211,609,633

    (1) Depreciation and amortization for direct real estate investments only.
        Excludes depreciation for corporate leasehold improvements, fixed
        assets and other non-real estate items.
    (2) Includes amortization of deferred financing fees and other non-cash
        interest expense.
    (3) Includes adjustments to reflect certain realized and unrealized gains
        and losses on residential mortgage investments held in our portfolio
        as of the balance sheet date and related derivative instruments.
    (4) Includes all recoveries on loans during the period.



                              CapitalSource Inc.
                      Adjusted Earnings Reconciliations
                                 (Unaudited)
                   ($ in thousands, except per share data)

    For our Commercial Finance segment, Healthcare Net Lease segment and
    Residential Mortgage segment, reconciliations of reported net income to
    adjusted earnings for the three months ended March 31, 2007, were as
    follows:

                                   Three Months Ended March 31, 2007
                                                     Residential
                           Commercial   Healthcare    Mortgage   Consolidated
                             Finance     Net Lease   Investment      Total

    Net income (loss)        $78,729       $1,258      $(1,297)     $78,690
      Add:
        Real estate
         depreciation and
         amortization (1)          -        6,762            -        6,762
        Amortization of
         deferred financing
         fees (2)              4,863           95          550        5,508
        Non-cash equity
         compensation         10,712            -            -       10,712
        Net realized and
         unrealized losses
         on residential
         mortgage investment
         portfolio including
         related
         derivatives (3)           -            -        7,180        7,180
        Unrealized loss on
         derivatives and
         foreign currencies,
         net                     328          -            -            328
        Unrealized loss on
         investments, net         47          -            -             47
        Provision for loan
         losses               14,926          -            -         14,926
        Recoveries (4)             -          -            -              -
      Less:
        Charge offs           10,250          -            -         10,250
        Non-recurring items        -          -            -              -
        Adjusted earnings    $99,355     $8,115       $6,433       $113,903

    Net income per share:
      Basic - as reported      $0.44      $0.01       $(0.01)         $0.44
      Diluted - as reported    $0.43      $0.01       $(0.01)         $0.43

    Average shares
     outstanding:
      Basic - as
       reported          179,324,672  179,324,672  179,324,672  179,324,672
      Diluted - as
       reported          181,743,884  181,743,884  181,743,884  181,743,884

    Adjusted earnings per
     share:
      Basic                    $0.55        $0.05        $0.04        $0.64
      Diluted (5)              $0.55        $0.05        $0.03        $0.63

    Average shares
     outstanding:
      Basic              179,324,672  179,324,672  179,324,672  179,324,672
      Diluted (6)        184,200,063  184,200,063  184,200,063  184,200,063

    (1) Depreciation and amortization for direct real estate investments only
        Excludes depreciation for corporate leasehold improvements, fixed
        assets and other non-real estate items.
    (2) Includes amortization of deferred financing fees and other non-cash
        interest expense.
    (3) Includes adjustments to reflect certain realized and unrealized gains
        and losses on residential mortgage investments held in our portfolio
        as of  the balance sheet date and related derivative instruments.
    (4) Includes all recoveries on loans during the period.
    (5) Adjusted to reflect the impact of adding back noncontrolling interests
        expense of $1.3 million for the three months ended March 31, 2007, to
        adjusted earnings due to the application of the if-converted method on
        non-managing member units, which are considered dilutive to adjusted
        earnings per share, but are antidilutive to GAAP net income per share
        for this period.
    (6) Adjusted to include average non-managing member units of 2,456,179 for
        the three months ended March 31, 2007, which are considered dilutive
        to adjusted earnings per share, but are antidilutive to GAAP net
        income per share for this period.



                              CapitalSource Inc.
                           Selected Financial Data
                                 (Unaudited)

                                                   Three Months Ended
                                            March 31, December 31,  March 31,
                                                2008        2007        2007

    Commercial Finance Segment:

    Performance ratios:
      Adjusted return on average assets         4.34%       3.39%       4.68%
      Adjusted return on average equity        23.87%      18.00%      23.90%
      Yield on average interest earning
       assets                                  10.26%      11.12%      12.47%
      Cost of funds                             5.45%       6.44%       6.15%
      Net finance margin                        5.74%       5.79%       7.52%
      Operating expenses as a percentage
       of average total assets                  2.03%       2.20%       2.60%
      Efficiency ratio (operating expenses
       / net investment income and other
       income)                                 50.79%      48.52%      32.93%

    Leverage ratios:
      Total debt to equity (as of period
       end)                                     4.37x       4.39x       4.16x
      Equity to total assets (as of period
       end)                                    18.07%      18.20%      19.18%
      Core lending spread                       7.12%       6.13%       5.13%

    Average balances ($ in thousands):
      Average loans                        $9,848,101  $9,658,941  $8,116,297
      Average assets                       10,487,426  10,347,669   8,603,621
      Average interest earning
       assets                              10,082,728  10,005,790   8,406,627
      Average income earning assets        10,082,728  10,005,790   8,406,627
      Average borrowings                    8,366,784   8,278,134   6,775,031
      Average equity                        1,906,553   1,949,243   1,686,186

    Healthcare Net Lease Segment:

    Performance ratios:
      Adjusted return on average assets         5.07%       4.64%       3.93%
      Adjusted return on average equity        15.82%      14.59%      11.14%
      Yield on average income earning
       assets                                  10.41%      10.11%      10.46%
      Cost of funds                             7.07%       7.07%       7.12%
      Net finance margin                        6.32%       6.02%       5.95%
      Operating expenses as a percentage
       of average total assets                  4.09%       4.27%       4.38%
      Operating expenses (excluding direct
       real estate depreciation) as a
       percentage of average total assets       0.83%       1.07%       1.10%
      Efficiency ratio (operating expenses
       / net investment income and other
       income)                                 64.26%      67.64%      75.97%
      Efficiency ratio (operating expenses
       excluding direct real estate
       depreciation) / net investment
       income and other income)                12.98%      16.98%      19.13%

    Leverage ratios:
      Total debt to equity (as of period
       end)                                     1.57x       1.54x       1.42x
      Equity to total assets (as of period
       end)                                    35.75%      36.21%      39.01%

    Average balances ($ in thousands):
      Average assets                       $1,096,445  $1,108,478    $837,087
      Average interest earning
       assets                                  35,296      42,014      24,287
      Average income earning assets         1,102,592   1,104,748     810,909
      Average borrowings                      612,468     611,333     483,411
      Average equity                          351,756     352,839     295,522



                              CapitalSource Inc.
                           Selected Financial Data
                                 (Unaudited)

                                                   Three Months Ended
                                            March 31, December 31,  March 31,
                                                2008        2007        2007

    Consolidated CapitalSource Inc.:

    Performance ratios:
      Adjusted return on average assets         2.45%       2.40%       3.02%
      Adjusted return on average equity        16.48%      16.35%      21.05%
      Yield on average interest earning
       assets                                   8.41%       8.98%       9.69%
      Cost of funds                             5.14%       6.08%       5.89%
      Net finance margin                        4.17%       3.88%       4.69%
      Operating expenses as a percentage
       of average total assets                  1.51%       1.58%       1.73%
      Operating expenses (excluding direct
       real estate depreciation) as a
       percentage of average total assets       1.31%       1.38%       1.55%
      Efficiency ratio (operating expenses
       / net investment income and other
       income)                                 80.07%      60.01%      36.44%
      Efficiency ratio (operating expenses
       excluding direct real estate
       depreciation) / net investment income
       and other income)                       69.50%      52.47%      32.67%

    Leverage ratios:
      Total debt to equity (as of period
       end)                                     5.42x       5.80x       5.95x
      Equity to total assets (as of period
       end)                                    14.99%      14.31%      14.16%


    Average balances ($ in thousands):
      Average loans                        $9,848,101  $9,658,941  $8,116,297
      Average assets                       17,936,953  17,884,309  15,298,106
      Average interest earning assets      16,302,258  16,392,353  14,207,472
      Average income earning
       assets                              17,369,554  17,455,086  14,994,095
      Average borrowings                   14,753,537  14,856,622  12,860,904
      Average equity                        2,664,986   2,627,612   2,194,140



                              CapitalSource Inc.
                          Commercial Asset Portfolio
                                 (Unaudited)
                               ($ in thousands)

                      March 31, 2008      December 31, 2007    March 31, 2007
    Composition of
     portfolio by
     type:
      Senior secured
       loans (1)         $5,702,771   53%   $5,695,167  52%  $5,110,099   54%
      First mortgage
       loans (1)          2,858,991   27     2,995,048  28    2,814,286   30
      Subordinate
       loans (1)          1,197,560   11     1,177,522  11      714,150    7
      Direct real
       estate
       investments        1,016,972    9     1,017,604   9      805,650    9
    Total
     commercial
     assets             $10,776,294  100%  $10,885,341 100%  $9,444,185  100%

    Composition of
     portfolio by
     business:
      Corporate
       Finance           $2,940,112   28%   $2,979,241  28%  $2,470,651   26%
      Healthcare and
       Specialty
       Finance            3,960,284   36     3,952,270  36    3,592,443   38
      Structured
       Finance            3,875,898   36     3,953,830  36    3,381,091   36
    Total
     commercial
     assets             $10,776,294  100%  $10,885,341 100%  $9,444,185  100%


    (1) "Loans" include loans, loans held for sale and receivables under
        reverse-repurchase agreements.



                              CapitalSource Inc.
                             Credit Quality Data
                                 (Unaudited)

                                          March 31, December 31,  March 31,
                                              2008        2007        2007

    Loans 60 or more days contractually
     delinquent:
      As a % of total Commercial Assets(1)    0.69%       0.68%       0.77%
      As a % of total Commercial Loans(2)     0.77%       0.75%       0.85%

    Loans on non-accrual(3):
      As a % of total Commercial Assets       1.62%       1.57%       1.63%
      As a % of total Commercial Loans        1.79%       1.73%       1.78%

    Impaired loans(4):
      As a % of total Commercial Assets       3.67%       2.93%       2.97%
      As a % of total Commercial Loans        4.06%       3.23%       3.24%

    Total (excluding assets in multiple
     categories):
      As a % of total Commercial Assets       3.77%       3.10%       3.16%
      As a % of total Commercial Loans        4.17%       3.42%       3.46%

    Allowance for Loan Loss:
      As a % of total Commercial Assets       1.27%       1.28%       1.33%
      As a % of total Commercial Loans        1.40%       1.41%       1.45%

    Net Charge Offs (annualized):
      As a % of total average Commercial
       Assets                                 0.22%       0.22%       0.47%
      As a % of total average Commercial
       Loans                                  0.25%       0.25%       0.51%


    (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 $49.9 million,
         $55.5 million and $41.5 million as of March 31, 2008, December 31,
         2007 and March 31, 2007, respectively, that were also classified as
         loans 60 or more days contractually delinquent.

    (4)  Includes loans with an aggregate principal balance of $64.2 million,
         $55.5 million and $54.4 million, as of March 31, 2008, December 31,
         2007 and March 31, 2007, respectively, that were also classified as
         loans 60 or more days contractually delinquent, and loans with an
         aggregate principal balance of $174.5 million, $170.5 million and
         $153.8 million as of March 31, 2008, December 31, 2007 and March 31,
         2007, respectively, that were also classified as loans on non-accrual
         status.

SOURCE CapitalSource

http://www.capitalsource.com

The FIL transaction remains subject to conditions set forth in the respective regulatory approvals and to closing conditions set forth in the FIL purchase and assumption agreement. The regulatory approvals also permit CapitalSource Bank to purchase up to $2.2 billion of loans from CapitalSource.

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 March 31, 2008 was approximately $19.85 billion. Headquartered in Chevy Chase, Maryland, the Company had 535 employees as of March 31, 2008 in offices across the U.S. and in Europe. For more information, visit http://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 our proposed bank formation and asset purchase and liability assumption, 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," "assume," "believe," "expect," "estimate," "plan," "will," "look forward," and similar expressions are generally intended to identify forward-looking statements. All forward-looking statements (including statements regarding 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: the proposed bank transaction, including the asset purchase and liability assumption, may not be completed on the proposed terms and schedule or at all; changes in economic conditions; continued disruptions in credit and other markets; 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 2007 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 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.

SOURCE CapitalSource Inc.

http://www.capitalsource.com