Colony Capital 8-K Completion of Acquisition or Disposition of Assets

Exhibit 99.1

COLONY FINANCIAL, INC.

Pro forma consolidated balance sheet as of March 31, 2011 (unaudited) and statements of operations for the three months ended March 31, 2011 and year ended December 31, 2010 (unaudited)

COLONY FINANCIAL, INC.

PRO FORMA CONSOLIDATED BALANCE SHEET

(In thousands, except share and per share data)

(Unaudited)

	March 31, 2011
			Pro Forma
	As Reported		Adjustments			Adjusted
ASSETS
Investments in unconsolidated joint ventures	$	259,111	$	(5,181	)(a)	$	253,930
Cash and cash equivalents		8,467		8,968	(a)		17,435
Loans receivable, net		108,863					108,863
Subscriptions receivable, net		235,014					235,014
Other assets		7,938					7,938
Total assets	$	619,393	$	3,787		$	623,180
LIABILITIES AND EQUITY
Liabilities:
Secured financing	$	13,967	$			$	13,967
Accrued and other liabilities		5,555					5,555
Due to affiliates		1,898					1,898
Dividends payable		5,563					5,563
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		38,483		—			38,483
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, 17,384,000 shares issued and outstanding		174					174
Additional paid-in capital		330,807					330,807
Common stock subscribed		235,014					235,014
Retained earnings		2,952		3,787	(a)		6,739
Accumulated other comprehensive income		1,715					1,715
Total stockholders’ equity		570,662		3,787			574,449
Noncontrolling interest		10,248					10,248
Total equity		580,910		3,787			584,697
Total liabilities and equity	$	619,393	$	3,787		$	623,180

See notes to unaudited pro forma consolidated financial statements.

COLONY FINANCIAL, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31, 2011
				Pro Forma
	As Reported			Adjustments			Adjusted
Income
Equity in income of unconsolidated joint ventures	$	8,484		$	(198	) (b)(c)	$	8,286
Interest income		2,165						2,165
Other operating income		561						561
Total income		11,210			(198	)		11,012
Expenses
Base management fees		1,296						1,296
Investment expenses		369						369
Investment expenses reimbursed to affiliate		318						318
Interest expense		510						510
Administrative expenses		1,125						1,125
Administrative expenses reimbursed to affiliate		390						390
Total expenses		4,008			—			4,008
Foreign exchange loss, net of gain on foreign currency hedge of $9		(54	)					(54	)
Income before income tax benefit		7,148			(198	)		6,950
Income tax benefit		228						228
Net income		7,376			(198	)		7,178
Net income attributable to noncontrolling interest		13						13
Net income attributable to common stockholders	$	7,363		$	(198	)	$	7,165
Net income per share:
Basic	$	0.42					$	0.41
Diluted	$	0.41					$	0.40
Weighted average number of common shares outstanding:
Basic		17,378,000						17,378,000
Diluted		17,840,500						17,840,500

See notes to unaudited pro forma consolidated financial statements.

COLONY FINANCIAL, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Year Ended December 31, 2010
				Pro Forma
	As Reported			Adjustments			Adjusted
Income
Equity in income of unconsolidated joint ventures	$	24,227		$	(335	)(c)(d)	$	23,892
Interest income		3,158						3,158
Other operating income		40						40
Total income		27,425			(335	)		27,090
Expenses
Base management fees		3,542						3,542
Investment expenses		442						442
Interest expense		555						555
Administrative expenses		3,687						3,687
Administrative expenses reimbursed to affiliate		1,656						1,656
Total expenses		9,882			—			9,882
Other income and expenses
Realized gain on sale of loan receivable		603						603
Foreign exchange loss, net of gain on foreign currency hedge of $43		(149	)					(149	)
Income before income taxes		17,997			(335	)		17,662
Income tax provision		(243	)					(243	)
Net income		17,754			(335	)		17,419
Net income attributable to noncontrolling interest		23						23
Net income attributable to common stockholders	$	17,731		$	(335	)	$	17,396
Net income per share:
Basic	$	1.20					$	1.18
Diluted	$	1.18					$	1.16
Weighted average number of common shares outstanding:
Basic		14,716,200						14,716,200
Diluted		15,003,700						15,003,700

See notes to unaudited pro forma consolidated financial statements.

COLONY FINANCIAL, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

1. Pro Forma Adjustments

On July 7, 2011, ColFin FRB Investor, LLC (“FRB Investor”), an unconsolidated joint venture in which Colony Financial, Inc. (the “Company”) holds a 5.91% ownership interest, completed the sale of 5,000,000 shares of common stock in First Republic Bank. The shares were sold in connection with First Republic Bank’s secondary public offering. FRB Investor, which owned an approximate 19.5% interest in First Republic Bank prior to the disposition, currently owns an approximate 15.6% interest in First Republic Bank. The Company’s indirect ownership interest in First Republic Bank is approximately 0.9% through its ownership in FRB Investor.

The Company’s unaudited pro forma consolidated financial statements give effect to the disposition of 19.9% of its investment in First Republic Bank. The Company’s pro forma balance sheet as of March 31, 2011 includes adjustments to reflect the disposition as if it had occurred at that date. The statements of operations for the three months ended March 31, 2011 and the year ended December 31, 2010 include adjustments to reflect the disposition as if it had occurred at the beginning of each period presented. The following pro forma adjustments are included:

(a) Represents the Company’s share of proceeds, reduction in investment in unconsolidated joint venture and gain on sale of approximately $9.0 million, $5.2 million and $3.8 million, respectively, resulting from the sale of 5,000,000 shares of First Republic Bank’s common stock by FRB Investor in connection with the closing of First Republic Bank’s secondary offering on July 7, 2011.

(b) Represents the reduction of the Company’s pro rata share of First Republic Bank’s net income for the three months ended March 31, 2011 as a result of FRB Investor’s sale of shares in First Republic Bank’s secondary public offering.

(c) Does not include the non-recurring gain on sale of approximately $3.8 million resulting from the Company’s disposition of a portion of its indirect interest in First Republic Bank.

(d) Represents the reduction of the Company’s pro rata share of First Republic Bank’s net income for the year ended December 31, 2010 as a result of FRB Investor’s sale of shares in First Republic Bank’s secondary public offering.