Capmark Financial Group Inc. Issues Quarterly Report as of and for the three months ended March 31, 2013

  Capmark Financial Group Inc. Issues Quarterly Report as of and for the three
  months ended March 31, 2013

Business Wire

HORSHAM, Pa. -- May 13, 2013

Capmark Financial Group Inc. (the “Company”) today issued its Quarterly Report
as of and for the three months ended March 31, 2013. The Company reported a
net loss of $1.8 million for the three months ended March 31, 2013 and had
consolidated total assets of $2.2 billion, consolidated total liabilities of
$1.3 billion, and stockholders’ equity of $0.9 billion as of March 31, 2013.

Highlights for the first quarter were:

  *The Company realized total proceeds of $180 million from the monetization
    of loan and REO assets.
  *The Company achieved consolidated net gains on loans, investments and real
    estate of $12 million.
  *Capmark Bank made a distribution to Capmark Financial Group Inc. of $157
    million.
  *The Company paid a cash distribution of $4.50 per share on March 22, 2013
    to shareholders of record on March 15, 2013, bringing aggregate
    distributions to shareholders since emergence from bankruptcy to $19.00
    per share.
  *The Company paid an additional $68 million to prepetition creditors
    including $21 million under the settlement agreement with Japanese
    lenders, $3 million under the settlement agreement with creditors of
    Crystal Ball Holdings of Bermuda Limited and $44 million from the disputed
    claims reserve.
  *The Company recorded an unrealized gain of $14 million on its shares in a
    collateralized debt obligation which was included in accumulated other
    comprehensive income on the consolidated balance sheet as of March 31,
    2013. The Company received $14 million of cash proceeds when the shares
    were redeemed subsequent to the end of the first quarter.
  *The Company continued to reduce its staffing levels and office locations
    commensurate with the reduction in assets and operating activities. The
    Company reduced its staff from 90 employees at year end to 70 at March 31,
    2013 and expects to have approximately 55 employees by the end of the
    second quarter. The Company also plans to reduce its five office locations
    at March 31, 2013 to three by the end of the second quarter.

Consolidated Balance Sheet

The Company had consolidated total assets of $2.2 billion and $2.9 billion as
of March 31, 2013 and December 31, 2012, respectively, primarily comprised of
a portfolio of loans, real estate, real estate-related assets and cash and
cash equivalents. Assets totaling $1.1 billion and $1.4 billion were held at
Capmark Bank and $171.1 million and $253.5 million of assets were associated
with discontinued operations as of March 31, 2013 and December 31, 2012,
respectively.

The Company had consolidated total liabilities of $1.3 billion and $1.5
billion as of March 31, 2013 and December 31, 2012, respectively. Capmark Bank
had liabilities of $0.9 billion and $1.0 billion and liabilities of $84.0
million and $114.7 million were associated with discontinued operations as of
March 31, 2013 and December 31, 2012, respectively. Capmark Bank’s liabilities
were primarily comprised of Federal Deposit Insurance Corporation
(“FDIC”)-insured deposit liabilities as of March 31, 2013 and December 31,
2012.

Total stockholders’ equity was $0.9 billion as of March 31, 2013 as compared
to $1.3 billion as of December 31, 2012. The reduction was primarily due to
the $451.1 million of cash distributions to holders of the Company’s common
stock.

Consolidated Results of Operations

The Company had income from continuing operations before income taxes of $1.7
million in the three months ended March 31, 2013, primarily due to $12.3
million of interest income on loans held for sale and investment securities
available for sale and $10.3 million of noninterest income substantially
offset by $18.9 million of noninterest expense and $2.0 million of interest
expense. Interest income in the three months ended March 31, 2013 included the
recognition of $5.5 million of previously deferred interest on loans held for
sale. Noninterest income of $10.3 million primarily included $12.1 million of
realized gains on full or partial dispositions of loans held for sale
partially offset by $1.1 million of net losses from the application of LOCOM
to loans held for sale. Noninterest expense of $18.9 million included $8.8
million of compensation and benefits costs and $5.7 million of professional
fees, of which $2.0 million was attributable to fees of restructuring and
advisory professionals and $0.8 million was attributable to fees associated
with the new markets tax credit (“NMTC”) assets. Compensation and benefits
costs in the three months ended March 31, 2013 included $1.8 million for
severance costs and $1.5 million for long term incentive plans. Interest
expense of $2.0 million primarily included $10.2 million of contractual
interest expense from deposit liabilities at Capmark Bank offset by $8.4
million from the accretion of the fresh start accounting premium for the
deposit liabilities.

Liquidity

As of March 31, 2013, the Company’s continuing operations had $1.2billion in
total cash and cash equivalents (including restricted cash), of which $1.0
billion was held by Capmark Bank and $0.2 billion was held by its other
subsidiaries. The following table summarizes the cash, cash equivalents and
restricted cash from continuing operations (in thousands):

                                                       
Cash, Cash Equivalents and Restricted     March 31, 2013     December 31, 2012
Cash
Capmark Bank cash and cash                $   1,025,104      $    1,296,156
equivalents
Non-Capmark Bank:
Cash and cash equivalents                     78,753              182,726
Restricted cash                              105,222            75,219
Total cash, cash equivalents and
restricted cash attributable to           $   1,209,079      $    1,554,101
continuing operations


The following table summarizes the components of restricted cash from
continuing operations (in thousands):

Restricted Cash                           March 31, 2013     December 31, 2012
Cash from consolidated VIEs               $   77,243         $    49,663
Bankruptcy disputed administrative,
priority and convenience class claims         8,865               8,865
escrow
Distribution escrow                           9,778               7,462
Other                                        9,336              9,229
Restricted cash from continuing           $   105,222        $    75,219
operations
                                                                  

Cash from consolidated variable interest entities (“VIEs”) is from entities
that are no longer owned by the Company but continue to be recognized on the
Company’s balance sheet because derecognition criteria under GAAP have not
been met. The increase in the related restricted cash as of March 31, 2013 as
compared to December 31, 2012 was due primarily to the monetization of an
underlying asset in an NMTC-related VIE which resulted in cash at the VIE. In
the second quarter of 2013, the Company received $40.5 million attributable to
that restricted cash.

The Company’s primary sources of liquidity are expected to be (1)proceeds
from the sale of loans, including discounted payoffs received in connection
with loan workout efforts, (2) proceeds from the sale of real estate, (3)
principal and interest payments on loans, (4) distributions received from
equity investments and (5) sales of other assets in its portfolio.

Capmark Bank has cash and cash equivalents in excess of all of its remaining
deposit liabilities and other liabilities as well as its expected operating
expenses over the next 12 months. On October 2, 2009, Capmark Bank consented
to cease and desist orders (the “C&D Orders”) with the FDIC and the Utah
Department of Financial Institutions (“UDFI”). Capmark Bank is prohibited
under the C&D Orders from declaring or paying dividends or making any other
form of payment representing a reduction in capital to Capmark Financial Group
Inc. without the prior written consent or non-objection of the FDIC and the
UDFI.

The Company expects to generate sufficient liquidity to meet its needs for
cash in its Non-Capmark Bank operations over the next 12 months, including
paying its operating expenses. The Company also expects that Capmark Bank has
sufficient liquidity to meet its needs for cash for the next 12 months,
including paying its operating expenses and interest and principal due on
maturing deposit liabilities and other liabilities.

The Company paid a cash distribution of $4.50 per share on March 22, 2013 to
shareholders of record on March 15, 2013. For U.S. federal income tax
purposes, any distribution by the Company to its shareholders will be
characterized as a dividend to the extent of the Company’s current or
cumulative earnings and profits. Distributions made in excess of earnings and
profits are next treated as a return of capital to the extent of the
shareholders’ basis.

The Company will consider making additional distributions to shareholders of
cash in excess of working capital needs and expects to make a distribution in
the second quarter of 2013; however the specific timing and amount of any
distribution have not been determined.

Supplemental Financial Information

The Company’s Quarterly Report as of and for the three months ended March 31,
2013 and March 31, 2012 and related supplemental financial information may be
found on the Company’s website (www.capmark.com) under the heading “Financial
Reporting.”

Investor Conference Call

The Company will hold a conference call for investors to be broadcast live
over the Internet on May 16, 2013 at 3:00 p.m. Eastern Time regarding the
topics addressed in this news release and the Quarterly Report as of and for
the three months ended March 31, 2013 and March 31, 2012 and related
supplemental financial information. To listen to the conference call, please
go to the Company’s website (www.capmark.com) under the heading “Investor
Relations” at least fifteen minutes prior to the scheduled start time to
register and download and install any necessary audio software. For those who
are unable to listen to the live broadcast, an archived replay will be
available on the website for a period of time. Investors who have questions
for the Company’s management can participate in the conference call by dialing
the following:

  *Toll free number: (877) 254-2825
  *International: (937) 641-0548
  *Conference ID# 69500595

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements.
These statements are based on management’s current expectations and beliefs
but are subject to a number of factors and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. Such forward-looking statements are made only as
of the date of this release. The Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in the
Company’s expectations with regard thereto or changes in events, conditions,
or circumstances on which any such statement is based.

About Capmark®:

Capmark is a real estate finance company focused on the management of its
commercial real estate-related assets and businesses with a view to maximizing
their value. Capmark is headquartered in Horsham, Pennsylvania and operates
principally in North America. For more information, visit www.capmark.com


CAPMARK FINANCIAL GROUP INC.
Consolidated Balance Sheet (unaudited)
(in thousands, except share amounts)


                                        March 31, 2013   December 31, 2012
Assets
Cash and cash equivalents                 $   1,103,857      $   1,478,882
Restricted cash (1)                           105,222            75,219
Accounts and other receivables (1)            54,485             51,496
Investment securities available for           17,600             4,611
sale
Loans held for sale (1)                       440,399            591,814
Real estate investments (1)                   134,597            154,112
Equity investments                            209,105            248,350
Other assets (1)                              11,782             13,048
Assets of discontinued operations (1)        171,084           253,518    
Total assets                              $   2,248,131      $   2,871,050  
Liabilities and Equity
Liabilities:
Deposit liabilities                           910,380            1,018,601
Other borrowings (1)                          200,685            222,062
Other liabilities (1)                         111,470            127,457
Liabilities of discontinued                  83,966            114,719    
operations (1)
Total liabilities                            1,306,501         1,482,839  
Commitments and Contingent
Liabilities
Equity:
Common stock, $.001 par value; shares
authorized — 110,000,000; shares
issued and outstanding —100,242,722           100                100
at March 31, 2013 and December 31,
2012
Capital paid in excess of par value           790,192            1,240,834
Retained earnings                             88,524             90,313
Accumulated other comprehensive              7,493             (4,885     )
(loss) income, net of tax
Total Capmark Financial Group Inc.            886,309            1,326,362
stockholders’ equity
Noncontrolling interests                     55,321            61,849     
Total equity                                 941,630           1,388,211  
Total liabilities and equity              $   2,248,131      $   2,871,050  
____________________

      The following table presents assets of consolidated variable interest
      entities (“VIEs”) included in each balance sheet line item that can be
      used only to settle the obligations of the consolidated VIE and
(1)  liabilities of the consolidated VIE included in each balance sheet line
      item for which creditors or other interest holders do not have recourse
      to the general credit of Capmark Financial Group Inc. and its
      subsidiaries.
      

                                                                 
                 March 31,     December                         March        December
                               31,                              31,          31,
                 2013
                               2012                             2013         2012
Assets                                         Liabilities
Restricted       $ 77,243      $ 49,663        Other            $ 4,865      $ 4,903
cash                                           borrowings
Accounts and                                   Other
other              864           1,055         liabilities        1,651        2,011
receivables
                                               Liabilities
Loans held         139,017       181,794       of                7,574       13,580
for sale                                       discontinued
                                               operations
Real estate        22,734        22,225        Total            $ 14,090     $ 20,494
investments                                    liabilities
Other assets       2,037         1,482
Assets of
discontinued      53,260       65,606
operations
Total assets     $ 295,155     $ 321,825
                                                                             


CAPMARK FINANCIAL GROUP INC.
Consolidated Statement of Comprehensive Income (Loss) (unaudited)
(in thousands, except per share data)


                                   Three months ended   Three months ended
                                     March 31, 2013         March 31, 2012
Net Interest Income
Interest income                      $    12,324            $    38,273
Interest expense                         2,023                20,000    
Net interest income                      10,301               18,273    
Noninterest Income
Net gains on loans                        10,832                 21,281
Net gains (losses) on                     800                    (2,799    )
investments and real estate
Other losses, net                         (1,489    )            (7,818    )
Equity in income of joint                 465                    3,631
ventures and partnerships
Fee revenue                               133                    1,877
Net real estate investment and           (454      )           2,047     
other income
Total noninterest income                 10,287               18,219    
Net revenue                              20,588               36,492    
Noninterest Expense
Compensation and benefits                 8,760                  14,778
Professional fees                         5,670                  5,877
Occupancy and equipment                   658                    1,413
Other expenses                           3,850                7,495     
Total noninterest expense                18,938               29,563    
Income from continuing
operations before income tax              1,650                  6,929
provision
Income tax provision (benefit)           159                  (344      )
Income from continuing
operations after income tax               1,491                  7,273
provision
Loss from discontinued
operations, net of tax (includes         (8,173    )           (11,219   )
gain on sale of $0 and $12,518,
respectively)
Net loss                                  (6,682    )            (3,946    )
Plus: Net loss attributable to           4,893                26,947    
noncontrolling interests
Net (loss) income attributable       $    (1,789    )           23,001    
to Capmark Financial Group Inc.
Other comprehensive income
(loss)
Net unrealized gain (loss) on             13,310                 (211      )
investment securities
Net foreign currency translation         (932      )           (3,121    )
Other comprehensive income               12,378               (3,332    )
(loss)
Comprehensive income (loss)
attributable to Capmark              $    10,589           $    19,669    
Financial Group Inc.
Basic and diluted net income per     $    0.06              $    0.34
share from continuing operations
Basic and diluted net (loss)
income per share attributable to         (0.02     )           0.23      
Capmark Financial Group Inc.
Basic weighted average shares             99,781                 99,594
outstanding
Diluted weighted average shares           99,787                 99,705
outstanding
                                                                           


CAPMARK FINANCIAL GROUP INC.
Consolidated Statement of Changes in Stockholders’ Equity (unaudited)
(in thousands, except number of shares)


                                      Three Months Ended     Year ended
                                                         December 31, 2012
                                      March 31, 2013
Common Stock
Number of shares outstanding at          100,242,722            100,052,475
beginning of period
Additional shares issued                 —                      243,767
Treasury shares retired                 —                    (53,520      )
Number of shares outstanding at         100,242,722          100,242,722  
end of period
Common Stock
Balance at beginning of period        $  100                 $  100
Additional shares issued                —                    —            
Balance at end of period                100                  100          
Capital Paid in Excess of Par
Value
Balance at beginning of period           1,240,834              2,692,602
Additional shares issued                 —                      —
Shareholder distributions                (451,092     )         (1,454,296   )
Treasury shares retired                  —                      (648         )
Stock-based compensation                450                  3,176        
Balance at end of period                790,192              1,240,834    
Retained Earnings (Accumulated
Deficit)
Balance at beginning of period           90,313                 (31,651      )
Net (loss) income attributable to       (1,789       )        121,964      
Capmark Financial Group Inc.
Balance at end of period                88,524               90,313       
Accumulated Other Comprehensive
(Loss) Income, net of tax
Balance at beginning of period           (4,885       )         (1,617       )
Other comprehensive (loss) income       12,378               (3,268       )
Balance at end of period                7,493                (4,885       )
Total Capmark Financial Group           886,309              1,326,362    
Inc. Stockholders’ Equity
Noncontrolling Interests
Balance at beginning of period           61,849                 178,960
Net loss attributable to                 (4,893       )         (52,288      )
noncontrolling interests
Other comprehensive (loss) income
attributable to noncontrolling           —                      —
interests
Other (includes impact of sale of       (1,635       )        (64,823      )
discontinued operations assets)
Balance at end of period                55,321               61,849       
Total Equity                          $  941,630            $  1,388,211    
                                                                             


CAPMARK FINANCIAL GROUP INC.
Consolidated Statement of Cash Flows (unaudited)
(in thousands)


                                   Three months ended   Three months ended
                                     March 31, 2013         March 31, 2012
Net Cash Provided By Operating
Activities of Continuing             $   125,778           $   532,234     
Operations
Investing Activities of
Continuing Operations
Net (increase) decrease in               (30,003     )          33,319
restricted cash
Proceeds from sales of
investment securities classified         240                    —
as available for sale
Repayments of investment
securities classified as                 —                      569,257
available for sale
Proceeds from sales of real              20,315                 122,710
estate investments
Proceeds from sales of/capital
distributions from equity                39,353                 5,338
investments
Other investing activities, net         2                    (664        )
Net cash provided by investing
activities of continuing                29,907               729,960     
operations
Financing Activities of
Continuing Operations
Repayments of debt                       —                      (272,473    )
Repayments of other borrowings           (21,377     )          (322,109    )
Repayment of deposit liabilities         (99,819     )          (660,927    )
Distribution to shareholders             (451,092    )          —
Other financing activities, net         (150        )         —           
Net cash used in financing
activities of continuing                (572,438    )         (1,255,509  )
operations
Effect of Foreign Exchange Rates        (676        )         (6,810      )
on Cash
Discontinued Operations
Net cash (used in) provided by
operating activities of                  (4,924      )          7,857
discontinued operations
Net cash used in investing
activities of discontinued               (2,467      )          (30,186     )
operations
Net cash used in financing
activities of discontinued              (20,517     )         —           
operations
Net cash used in discontinued            (27,908     )          (22,329     )
operations
Net Decrease in Cash and Cash            (445,337    )          (22,454     )
Equivalents
Cash and Cash Equivalents,              1,568,920            2,737,811   
Beginning of Period(1)(2)
Cash and Cash Equivalents, End       $   1,123,583         $   2,715,357   
of Period(3)(4)
                                                                            
Supplemental Disclosures of Cash
Flow Information:
Income taxes refunded, net               177                   3,249
Interest paid                            15,413                 54,177
____________________

Notes:

      Cash and cash equivalents exclude restricted cash of $150.4 million from
(1)  continuing and discontinued operations and include non-restricted cash
      of discontinued operations of $90.0 million, respectively as of December
      31, 2012.
      
      Cash and cash equivalents exclude restricted cash of $232.7 million from
(2)   continuing and discontinued operations and include non-restricted cash
      of discontinued operations of $4.4 million, respectively as of December
      31, 2011.
      
      Cash and cash equivalents exclude restricted cash of $182.2 million from
(3)   continuing and discontinued operations and include non-restricted cash
      of discontinued operations of $19.7 million, respectively as of March
      31, 2013.
      
      Cash and cash equivalents exclude restricted cash of $174.4 million from
(4)   continuing and discontinued operations and include non-restricted cash
      of discontinued operations of $0.7 million, respectively as of March 31,
      2012.
      

Contact:

Capmark Financial Group Inc.
Thomas L. Fairfield, 215-328-1555