Colony Capital 8-K Colony Financial Announces First Quarter 2010 Financial Results

Exhibit 99.1

COLONY FINANCIAL ANNOUNCES FIRST QUARTER 2010 FINANCIAL RESULTS

Los Angeles, CA, May 12, 2010/Business Wire/ – Colony Financial, Inc. (NYSE: CLNY) (the “Company”) today announced financial results for the first quarter ended March 31, 2010.

2010 Highlights

• First quarter net income and core earnings of $0.14 per basic and diluted share and adjusted net income of $0.18 per basic and diluted share excluding the Company’s share of one-time investment transaction costs

• Announced three transactions during the first quarter representing the investment of $59.6 million of equity capital:

• Participated with affiliates and in partnership with the FDIC to acquire approximately 1,200 loans at a discounted purchase price of approximately 44% of the aggregate unpaid principal balance of approximately $1 billion

• Participated in the acquisition of a $66.0 million pari-passu interest in a performing first mortgage loan on a Class A office building in Manhattan at a discounted purchase price of approximately 68% of the unpaid principal balance

• Participated in the origination of a five-year, $30 million recourse loan to a world renowned photographer bearing an interest rate of 14% per annum and secured by two townhomes and a photography catalog

• Total invested and committed capital to-date has reached $233 million, or 85% of the proceeds from our IPO and concurrent private placement, having made or committed to the following investments in the current quarter:

• In May, participated in the acquisition of a performing 103-hotel portfolio mezzanine loan at a discounted purchase price of 82% of the unpaid principal balance and a senior CMBS-related bond at a discounted purchase price of 42% of its face value; these two investments have a blended current yield of approximately 7%

• Also in May, committed to participate in the acquisition of a German non-performing loan portfolio at a discounted purchase price of 19% of the aggregate unpaid principal balance of the portfolio

Operating Results

For the first quarter of 2010, equity in income of unconsolidated joint ventures and interest income contributed $3.9 million and $0.2 million, respectively, to total income of $4.1 million. Total expenses for the quarter were $2.0 million. Administrative expenses accounted for $1.2 million, of which administrative expenses reimbursed to the Company’s external manager were $0.3 million. As a result, during the first quarter of 2010, the Company reported net income of $2.1 million, or $0.14 per basic and diluted share.

Results included $0.6 million of the Company’s pro-rata share of one-time investment transaction costs, which must be fully expensed in the period incurred, and reduce equity in income of unconsolidated joint ventures. Excluding the Company’s pro-rata share of these one-time investment transaction costs, adjusted equity in income of unconsolidated joint ventures and adjusted total income were $4.5 million and $4.7 million, respectively, during the first quarter of 2010. After total expenses of $2.0 million, the Company generated adjusted net income before one-time investment transaction costs of $2.7 million, or $0.18 per basic and diluted share, during the quarter.

Adjusted equity in income of unconsolidated joint ventures, adjusted total income, adjusted net income and adjusted net income per basic and diluted share, each before one-time investment transaction costs, are non-GAAP financial measures that adjust equity in income of unconsolidated joint ventures, total income, net income and net income per basic and diluted share, each as computed in accordance with GAAP, respectively, by eliminating investment transaction costs incurred by our unconsolidated joint ventures in connection with their acquisition of assets. The Company believes that these adjusted income metrics are useful to investors because they present a better understanding of the recurring performance of the assets owned by our unconsolidated joint ventures. The Company has presented reconciliations of these non-GAAP measures to their most directly comparable GAAP counterparts in the financial information that appears later in this release.

“We remain on target to deploy our IPO capital by the end of the current quarter. Furthermore, we are seeing an increasing supply of potential transactions that meet our yield and credit investment criteria,” said Richard Saltzman, the Company’s President and Chief Executive Officer.

Book Value

Colony Financial’s book value per common share on March 31, 2010 was $19.47 before the accrual of deferred underwriting expenses, unchanged from December 31, 2009. The deferred underwriting expenses relate to our initial public offering, whereby the Company’s manager paid $5.75 million of the underwriting discounts and the underwriters in the initial public offering deferred receipt of $5.75 million in underwriting discounts. The Company has agreed to reimburse its manager, by issuing stock, for the underwriting expenses it paid and to pay the underwriters their deferred underwriting discounts, in cash, if, during any period of four consecutive calendar quarters during the 24 full calendar quarters after the initial public offering, the Company’s Core Earnings for any such four-quarter period exceeds an 8% performance hurdle rate.

The Company’s GAAP book value per common share was $18.68 on March 31, 2010 after giving effect to the deferred underwriting expenses, unchanged from December 31, 2009.

Core Earnings

Colony Financial’s Core Earnings, a non-GAAP financial measure, was $2.1 million, or $0.14 per basic and diluted share, during the first quarter of 2010. Core Earnings is used to compute incentive fees payable to the Company’s manager and the Company believes it is a useful measure for investors to better understand the Company’s cash-based earnings. For these purposes, Core Earnings is defined as GAAP net income (loss) excluding: (i) non-cash equity compensation expense; (ii) the expenses incurred in connection with our formation and our IPO, including the deferred underwriting expenses; (iii) the incentive fee; (iv) real estate depreciation and amortization (to the extent that we foreclose on any properties underlying our target assets); and, (v) any unrealized gains, losses or other non-cash items recorded in the period. The amount will be adjusted to exclude one-time events pursuant to changes in GAAP and certain other non-cash charges after discussions between the Company’s manager and the Company’s independent directors and after approval by a majority of the independent directors.

Dividend

On March 24, 2010, Colony Financial’s Board of Directors declared a dividend of $0.16 per share of common stock for the quarter ended March 31, 2010. The dividend was paid April 15, 2010, to shareholders of record on April 5, 2010. The Company’s dividend policy is set by its Board of Directors and will be evaluated on a quarterly basis based upon the deployment of the Company’s capital and its taxable earnings and cash flow.

Conference Call

Colony Financial will host a conference call at 7 a.m. PT / 10 a.m. ET on Thursday, May 13, 2010, to discuss results for the first quarter of 2010. To participate in the event by telephone, please dial (877) 941-2068 five to 10 minutes prior to the start time (to allow time for registration) and use conference ID 4284254. International callers should dial (480) 629-9712. A digital replay will be available beginning May 13, 2010, at 10 a.m. PT / 1 p.m. ET, through May 27, 2010, at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial (800) 406-7325 (U.S.), and use passcode 4284254. International callers should dial (303) 590-3030 and enter the same conference ID number. The call will also be broadcast live over the Internet and can be accessed on the Investor Relations section of the Company’s Web site atwww.colonyfinancial.com. To listen to the live webcast, please visit the site at least 15 minutes prior to the start of the call in order to register, download and install any necessary audio software. A replay of the call will also be available for 90 days on the Web site.

About Colony Financial, Inc.

Colony Financial is a real estate finance company that is focused primarily on acquiring, originating and managing commercial mortgage loans, which may be performing, sub-performing or non-performing loans (including loan-to-own strategies), other commercial real estate-related debt investments, CMBS, REO properties and other real estate-related assets. The Company intends to elect and qualify to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes. For more information, visitwww.colonyfinancial.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company’s control, that may cause actual results to differ significantly from those expressed in any forward-looking statement. Statements regarding the following subjects, among others, may be forward-looking and may impact the Company’s expectations regarding its financial condition and results of operations: use of proceeds of the Company’s initial public offering; business and investment strategy; projected operating results and expected yields from our investments; financing and advance rates for the Company’s target assets; expected leverage; general volatility of the securities markets in which the Company invests; expected investments; expected co-investment allocations and related requirements; interest rate mismatches between the Company’s assets and its borrowings used to fund such investments; changes in interest rates and the market value of the Company’s assets; changes in prepayment rates on the Company’s assets; effects of hedging instruments on the Company’s assets; rates of default or decreased recovery rates on the Company’s assets; the degree to which hedging strategies may or may not protect the Company from interest rate volatility; impact of changes in governmental regulations, tax law and rates, and similar matters; the Company’s ability to maintain its qualification as a REIT for U.S. federal income tax purposes; the Company’s ability to maintain its exemption from registration under the 1940 Act; availability of investment opportunities in mortgage-related and real estate-related investments and other securities; availability of qualified personnel; estimates relating to the Company’s ability to make distributions to its stockholders in the future; the Company’s understanding of its competition; and market trends in the Company’s industry, interest rates, real estate values, the debt securities markets or the general economy.

All forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the Company’s periodic reports filed from time to time with the Securities and Exchange Commission.

Investor Contact:

Colony Financial, Inc.

Darren Tangen

Chief Financial Officer

(310) 552-7230

Addo Communications, Inc.

Andrew Blazier

(310) 829-5400

andrewb@addocommunications.com

Media Contact:

Kristin Celauro

Owen Blicksilver P.R., Inc.

(732) 433-5200

kristin@blicksilverpr.com

(FINANCIAL TABLES FOLLOW)

COLONY FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	March 31, 2010 (Unaudited)			December 31, 2009
ASSETS
Investments in unconsolidated joint ventures	$	188,034		$	129,087
Cash and cash equivalents		99,507			157,330
Other assets		1,866			1,112
Total assets	$	289,407		$	287,529
LIABILITIES AND EQUITY
Liabilities:
Accrued and other liabilities	$	1,275		$	1,112
Due to affiliate		863			476
Dividends payable		2,341			1,024
Deferred underwriting discounts and commissions payable to underwriters		5,750			5,750
Deferred underwriting discounts and commissions reimbursable to Manager		5,750			5,750
Total liabilities		15,979			14,112
Commitments and contingencies
Equity:
Stockholders’ equity:
Preferred Stock, $0.01 par value, 50,000,000 shares authorized, none outstanding		—			—
Common stock, $0.01 par value, 450,000,000 shares authorized, 14,631,000 shares issued and outstanding		146			146
Additional paid-in capital		275,262			275,247
Distributions in excess of earnings		(1,669	)		(1,424	)
Accumulated other comprehensive loss		(362	)		(592	)
Total stockholders’ equity		273,377			273,377
Noncontrolling interest		51			40
Total equity		273,428			273,417
Total liabilities and equity	$	289,407		$	287,529

COLONY FINANCIAL, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31, 2010
Income
Equity in income of unconsolidated joint ventures	$	3,915
Interest income		170
Total income		4,085
Expenses
Base management fees		660
Investment expenses		99
Administrative expenses		929
Administrative expenses reimbursed to affiliate		271
Total expenses		1,959
Foreign exchange loss, net of gain on foreign currency hedge of $5		(28	)
Net income		2,098
Net income attributable to noncontrolling interest		2
Net income attributable to common stockholders	$	2,096
Net income per share:
Basic	$	0.14
Diluted	$	0.14
Weighted average number of common shares outstanding:
Basic		14,625,000
Diluted		14,912,500
Dividends declared per common share	$	0.16

COLONY FINANCIAL, INC.

CORE EARNINGS (Loss) (Unaudited)

(In thousands)

	Three Months Ended March 31, 2010
GAAP Net income attributable to common stockholders	$	2,096
Adjustment to GAAP net income to reconcile to Core Earnings:
Non-cash equity compensation expense		15
Core Earnings		2,111
Basic Core Earnings per share of common stock	$	0.14
Diluted Core Earnings per share of common stock	$	0.14
Basic weighted average common shares outstanding		14,625,000
Diluted weighted average common shares outstanding		14,912,500

COLONY FINANCIAL, INC.

ADJUSTED TOTAL AND NET INCOME (Loss) (Unaudited)

(In thousands)

	Three Months Ended March 31, 2010
	As presented in accordance with GAAP			Adjustment to exclude one-time investment transaction costs		As adjusted
Equity in income of unconsolidated joint ventures	$	3,915		$	568	$	4,483
Interest income		170			—		170
Total income		4,085			568		4,653
Less: Total Expenses, foreign exchange loss, net of gain and net income attributable to non-controlling interests		(1,989	)		—		(1,989	)
Net income attributable to common shareholders		2,096			568		2,664
Basic net income per common share	$	0.14		$	0.04	$	0.18
Diluted net income per common share	$	0.14		$	0.04	$	0.18
Basic weighted average common shares outstanding		14,625,000
Diluted weighted average common shares outstanding		14,912,500