Commercial lender CapitalSource Inc (CSE.N) posted a third-quarter loss of $274 million, hurt mainly by a two-fold rise in loan loss provisions, and said it expects elevated credit charges to continue into 2010.
We increased our general provision for commercial loan losses this quarter in light of continuing stress in our commercial real estate portfolio, the company said.
CapitalSource, which transformed itself from a real estate investment trust to a bank in January, said net loss for the quarter was 87 cents a share, compared with a profit of $13.7 million, or 5 cents a share, last year.
Analysts on average expected a loss of 26 cents a share for the quarter, according to Thomson Reuters I/B/E/S.
Provision for loan losses rose to $221.4 million from $110.3 million, last year.
CapitalSource joins a host of other U.S. commercial banks that have seen their profits slip as they increase provision for bad loans amidst rising defaults.
Net investment income fell about 14 percent to $135.7 million.
Shares of the company closed at $3.56 Friday on the New York Stock Exchange.