CapitalSource Inc. (NYSE:CSE), made significant changes earlier in the year with its Executive Chairman, John K. Delaney taking an immediate leave from that role to pursue a political career in the United States House of Representatives.
With a departure by the founder of CapitalSource, the company which also owns CapitalSource Bank no longer calls the D.C. area's wealthiest district -- Chevy Chase, Maryland -- home. Instead the company has named its Los Angeles, California office for that role, and is located on the 33rd floor of 633 W 5th street, commonly known as the U.S. Bank tower which is also the tallest in Los Angeles and California.
The move is unusual considering California is often labeled as one of the most unfriendly states to business, even surpassing Maryland in that regard. The Tax Foundation ranked California 48th in its 2012 State Business Tax Climate Index while Maryland was only marginally better being ranked 42nd. The corporate income tax (CIT) in California was reduced to 8.84% while in Maryland the CIT is 8.25%, a change from 7% in 2007.
But the relocation is partly due to CapitalSource having its banking operations -- all of its 21 branches -- located in the Los Angeles area of Southern California. The banking operations were formed through the purchase Fremont Investment & Loan in 2008 when financial firms scrambled for stability in traditional banking during the housing crash and economic downturn. CapitalSource Bank began operations in July 2008.
CapitalSource which trades on the New York Stock Exchange is still below 2007 levels of nearly $30 a share. The company closed yesterday at $6.53 with a market capitalization of approximately $1.61 billion.