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To: Johnny Canuck who wrote (44971)	9/11/2008 3:54:13 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 70763

CapitalSource shares fall on dividend cut Tuesday September 9, 5:04 pm ET CapitalSource shares drop after company slashes quarterly dividend to 5 cents from 60 cents NEW YORK (AP) -- Shares of CapitalSource Inc. dropped Tuesday after the financial services firm slashed its quarterly cash dividend by 92 percent. Shares fell $1.26, or 9.7 percent, to $11.73. Shares have traded between $7.56 and $22.42 in the past 12 months. ADVERTISEMENT Late Monday, the Chevy Chase, Md.-based company declared a dividend of 5 cents for the third quarter, payable on or about Sept. 30 to shareholders of record as of Sept. 17. This is down from a dividend of 60 cents paid in the last several quarters. While the dividend cut was widely expected, it was deeper than some analysts had anticipated. "We believe a more conservative dividend payout makes economic sense given the higher returns available on new loan originations, and a lower dividend also provides greater capital flexibility for the company as market conditions change," wrote Sandler O'Neill & Partners analyst Michael Taiano in a note to clients. "Nonetheless, the dividend level does fall short of the historical payout ratios and dividend yields of commercial banks, which some investors may find disappointing." Taiano maintained a "Hold" rating on the shares, adding that some investors could interpret the dividend cut as management's lack of confidence in the near-term cash flows of the company.