CapitalSource
| File:CapitalSource logo.png | |
| Company type | Subsidiary |
|---|---|
| Template:NASDAQ (until 2014) | |
| Industry | Financial services |
| Founded | 2000 in Chevy Chase, Maryland |
| Defunct | Template:End date and age |
| Headquarters | Los Angeles, California |
Key people | James J. Pieczynski (president) |
| Products | Asset-based loans |
| Parent | PacWest Bancorp (2014-present) |
| Website | www |
CapitalSource operates as a commercial lending entity within the United States and functions as a division of Pacific Western Bank. It specializes in providing senior debt financing, with loan amounts ranging from $5 million up to $100 million, targeting middle-market businesses across the country. The company serves sectors such as technology, real estate, healthcare, security, small business, golf finance, and equipment leasing. Managing assets totaling $16 billion and maintaining 80 full-service branches throughout California, CapitalSource functions as an on-balance sheet lender that internally originates, underwrites, and administers its loans. Its loan portfolio is predominantly composed of first mortgage loans, cash-flow-based financing, and asset-backed lending.
History
Established in 2000 by future U.S. Congressman John Delaney (D-MD) alongside Jason Fish, CapitalSource began with initial capital exceeding $500 million—the largest private finance company capitalization at that time. The company went public in 2003 on the New York Stock Exchange, trading under the ticker symbol CSE. In 2006, it transitioned to a Real Estate Investment Trust (REIT) structure to capitalize on tax advantages enhancing its market position; however, it relinquished REIT status in 2009 and reverted to a C-Corporation framework.
CapitalSource divested from a contentious hotel development project associated with rapper Jay-Z and developer Andre Balazs after disposing of the property note at a loss. Additionally, in 2010, CapitalSource Bank exercised foreclosure on the "Manhattan Blue" condominium development due to inadequate unit sales.
The firm shifted its corporate headquarters to Los Angeles early in 2012. By 2013, it was recognized as a significant lender to Aeon Financial, an entity noted for aggressive acquisition of tax liens.
In July 2013, PacWest Bancorp acquired CapitalSource for approximately $2.29 billion, with the transaction completing in April 2014. Following the merger, CapitalSource's shares ceased trading under the CSE symbol on April 7, 2014; shareholders received compensation through cash payments and shares of PACW stock. This consolidation created California’s sixth-largest publicly traded commercial bank, holding assets exceeding $16 billion.
After the acquisition, Pacific Western Bank faced community opposition during subsequent acquisition attempts—for instance, resistance emerged during its proposed 2017 purchase of California United Bank amid concerns regarding commitments to low-income lending.
Recognition
CapitalSource Bank played a key role in establishing the Elder Financial Protection Network (EFPN) and was honored with a Certificate of Recognition from the California State Legislature for its contributions. Gary Dunn, serving as Vice President of Community Reinvestment Act (CRA) at the bank, holds the position of Treasurer on EFPN’s Board of Directors. In 2010, CapitalSource Bank received the Bank Enterprise Award from the Community Development Financial Institutions Fund under the U.S. Treasury Department, acknowledging its investments in low-income and economically challenged communities within California.