The Long Case for Capital Source Inc.

Rudyard Kipling wrote “If you can trust yourself when all men doubt you but make allowance for their doubting too,” then you’ll be a man. But that trust shown by early investors in financials has resulted in more of a ‘poorer man’. I believe just as the financial sector goes through typical complete purge by ‘investors’, it’s high time to look at financial company, which is building a financial institution in this turmoil - Capital Source Inc. (CSE).

Capital Source is an almost $3B market cap leading middle market finance company, which was providing loans to SMB (small medium businesses) and especially to healthcare sector. The Company was enjoying REIT status. But now it is changing gears strategically to make good of current lending expertise and acquiring great deposit sources to make itself a good middle market focus bank with a great balance sheet in a market desperately seeking one, which is southern CA. In essence, CSE is bringing together a fund distribution knowledge base with its secure and growing fund raising capability.