CapitalSource Inc. of Chevy Chase, Md., said Monday that its third-quarter net loss widened 11.2% from the previous quarter, to $274 million, as it increased its loss allowance by 97 basis points, to 5.48% of commercial loan assets.
John Delaney, CapitalSource's chief executive, said in a press release that the $14.2 billion-asset company expects "elevated credit charges to continue into 2010" but that it is "comfortable" with total loss projections it gave in August.
The loss of 87 cents a share was 61 cents worse than the average analyst estimate.
Impaired commercial loans were 13.85% of commercial loan assets, up 174 basis points. The percentage had jumped 387 basis points in the second quarter.
Chargeoffs fell 19.2% from the previous quarter, to $135 million. The third quarter included a $50 million "judgmental reserve" for commercial real estate.
CapitalSource's ratio of tangible common equity to tangible assets fell 28 basis points, to 15.94%. At its CapitalSource Bank subsidiary the ratio rose 22 basis points, to 12.71%.
CapitalSource Bank, a California industrial bank, was started last year when CapitalSource bought 22 branches and some assets from Fremont Investment and Loan, an industrial loan company owned by Fremont General Corp. in Brea, Calif.
CapitalSource applied to become a bank holding company last November as a part of an effort to convert its bank subsidiary to a commercial charter, which it said it believed would enable it to offer a wider variety of deposit products and other services. But the company gave up on the bid this year after months passed without being granted approval.