UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-06136

CORUS BANKSHARES, INC.

(Exact name of registrant as specified in its charter)

Minnesota (State or other jurisdiction of incorporation or organization)	41-0823592 (I.R.S. Employer Identification No.)
3959 N. Lincoln Ave., Chicago, Illinois (Address of principal executive offices)	60613-2431 (Zip Code)

(773) 832-3088
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of April 28, 2009, the Registrant had 53,711,680 common shares, $0.05 par value, outstanding.

EXPLANATORY NOTE

Corus Bankshares, Inc. is filing this Amendment No. 1 to its Quarterly Report on Form 10-Q for the period ended March 31, 2009 (the “Form 10-Q”) to correct typographical errors in the Section 1350 Certifications furnished as Exhibit 32 to the Form 10-Q. This Amendment No. 1 also contains currently dated certifications under Rule 13a-14(a)/15d-14(a) as Exhibits 31.1 and 31.2. Except as described above, no other changes were made to the Form 10-Q.

CORUS BANKSHARES, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
MARCH 31, 2009

TABLE OF CONTENTS

PART I. — FINANCIAL INFORMATION
ITEM 1. Financial Statements	1
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	85
ITEM 4. Controls and Procedures	85
PART II. — OTHER INFORMATION
ITEM 1. Legal Proceedings	86
ITEM 1A. Risk Factors	86
ITEM 6. Exhibits	95
Signature	96
Exhibit 31.1
Exhibit 31.2
Exhibit 32

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CORUS BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31			December 31			March 31
(dollars in thousands, except per share data)	2009			2008			2008
Assets
Cash and due from banks — noninterest-bearing	$	55,149		$	67,633		$	90,312
Interest-bearing deposits with the Federal Reserve		200,132			141,036			—
Federal funds sold		—			100,000			647,400
Cash and Cash Equivalents		255,281			308,669			737,712
Time deposits with banks		827,953			1,930,918			300,000
Securities:
Available-for-sale, at fair value
U.S. Government agencies (amortized cost $1,318,637, $1,621,499 and $3,304,369)		1,323,958			1,634,014			3,311,454
Other securities (amortized cost $698,720, $3,394 and $55,298)		698,897			2,839			70,093
Total Securities		2,022,855			1,636,853			3,381,547
Loans, net of unearned income		4,159,879			4,052,609			4,556,935
Less: Allowance for loan losses		338,622			269,357			87,477
Loans, net		3,821,257			3,783,252			4,469,458
Other real estate owned		499,076			408,987			53,174
Taxes receivable		140,646			134,168			11,949
Accrued interest receivable		31,736			31,126			29,374
Premises and equipment, net		32,951			33,284			28,001
Other assets		58,002			86,231			60,842
Total Assets	$	7,689,757		$	8,353,488		$	9,072,057
Liabilities and Shareholders’ (Deficit)/Equity
Liabilities:
Deposits:
Interest-bearing	$	6,960,431		$	7,384,427		$	7,537,851
Noninterest-bearing		197,036			208,033			245,935
Total Deposits		7,157,467			7,592,460			7,783,786
Subordinated debentures relating to Trust Preferred Securities		413,991			409,414			404,647
Other borrowings		444			725			47,249
Accrued interest payable		10,818			12,892			16,255
Dividends payable		—			—			13,762
Liability for credit commitment losses		94,116			35,550			7,350
Other liabilities		21,843			19,882			27,293
Total Liabilities		7,698,679			8,070,923			8,300,342
Shareholders’ (Deficit)/Equity:
Common stock (par value $0.05 per share, 130,000,000 shares authorized: 53,711,680, 53,710,980 and 55,012,380 shares outstanding, respectively)		2,686			2,686			2,751
Surplus		34,814			35,260			43,353
Equity awards outstanding		9,019			8,622			8,720
(Accumulated deficit)/Retained earnings		(48,273	)		236,703			704,162
Accumulated other comprehensive (loss)/income		(7,168	)		(706	)		12,729
Total Shareholders’ (Deficit)/Equity		(8,922	)		282,565			771,715
Total Liabilities and Shareholders’ (Deficit)/Equity	$	7,689,757		$	8,353,488		$	9,072,057

See accompanying notes to the consolidated financial statements.

1

CORUS BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended
	March 31
(in thousands, except per share data)	2009			2008
Interest, Points and Fees, and Dividend Income:
Interest, points and fees on loans	$	39,455		$	100,977
Federal funds sold		5			3,807
Interest-bearing deposits with the Federal Reserve		136			—
Time deposits with banks		9,268			256
Securities:
Interest		10,927			37,456
Dividends		—			1,180
Total Interest, Points and Fees, and Dividend Income		59,791			143,676
Interest Expense:
Deposits		62,023			88,886
Subordinated debentures relating to Trust Preferred Securities		4,149			7,067
Other borrowings		—			801
Total Interest Expense		66,172			96,754
Net Interest (Loss)/Income		(6,381	)		46,922
Provision for credit losses		193,250			36,800
Net Interest (Loss)/Income After Provision for Credit Losses		(199,631	)		10,122
Noninterest Income:
Securities gains/(losses), net		273			10,978
Service charges on deposit accounts		2,112			2,486
Other income		864			944
Total Noninterest Income		3,249			14,408
Noninterest Expense:
Employee compensation and benefits		8,958			9,046
OREO (gains)/losses, net		42,286			2,948
Other real estate owned and protective advances		20,852			403
Insurance — FDIC		5,985			1,594
Net occupancy		1,519			1,258
Depreciation — furniture & equipment		561			441
Data processing		461			470
Other expenses		7,564			3,085
Total Noninterest Expense		88,186			19,245
(Loss)/Income Before Income Taxes		(284,568	)		5,285
Income tax expense		408			777
Net (Loss)/Income	$	(284,976	)	$	4,508
Net (Loss)/Income per Common Share:
Basic	$	(5.31	)	$	0.08
Diluted	$	(5.31	)	$	0.08
Cash Dividends Declared per Common Share	$	—		$	0.25
Average Common Shares Outstanding:
Basic		53,711			55,012
Diluted		53,711			55,829

See accompanying notes to the consolidated financial statements.

2

CORUS BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIT)/EQUITY
THREE MONTHS ENDED MARCH 31, 2009
(Unaudited)

									(Accumulated			Accumulated
						Equity			Deficit) /			Other
	Common					Awards			Retained			Comprehensive
(dollars in thousands, except common share data)	Stock		Surplus			Outstanding			Earnings			Loss			Total
Balance at December 31, 2008	$	2,686	$	35,260		$	8,622		$	236,703		$	(706	)	$	282,565
Net loss		—		—			—			(284,976	)		—			(284,976	)
Other comprehensive loss:
Changes in net unrealized gains on securities		—		—			—			—			(6,189	)		(6,189	)
Reclassification adjustment for net gains realized in net loss		—		—			—			—			(273	)		(273	)
Income tax effect		—		—			—			—			—			—
Comprehensive loss																(291,438	)
Share-based compensation		—		—			409			—			—			409
Restricted stock vested, 700 common shares		—		8			(12	)		—			—			(4	)
Loss sharing (1)		—		(454	)		—			—			—			(454	)
Balance at March 31, 2009	$	2,686	$	34,814		$	9,019		$	(48,273	)	$	(7,168	)	$	(8,922	)

⁽¹⁾ Pursuant to the Commission Program for Commercial Loan Officers.

See accompanying notes to the consolidated financial statements.

THREE MONTHS ENDED MARCH 31, 2008
(Unaudited)

												Accumulated
						Equity						Other
	Common					Awards			Retained			Comprehensive
(dollars in thousands, except common share data)	Stock		Surplus			Outstanding			Earnings			Income			Total
Balance at December 31, 2007	$	2,751	$	44,602		$	8,215		$	713,416		$	20,413		$	789,397
Net income		—		—			—			4,508			—			4,508
Other comprehensive income/(loss):
Changes in net unrealized gains on securities		—		—			—			—			(715	)		(715	)
Reclassification adjustment for net gains realized in net income		—		—			—			—			(10,978	)		(10,978	)
Income tax effect		—		—			—			—			4,009			4,009
Comprehensive loss																(3,176	)
Share-based compensation		—		—			517			—			—			517
Restricted stock vested, 700 common shares		—		13			(12	)		—			—			1
Loss sharing (1)		—		(1,262	)		—			—			—			(1,262	)
Cash dividends declared on common stock, $0.25 per common share		—		—			—			(13,762	)		—			(13,762	)
Balance at March 31, 2008	$	2,751	$	43,353		$	8,720		$	704,162		$	12,729		$	771,715

⁽¹⁾ Pursuant to the Commission Program for Commercial Loan Officers.

See accompanying notes to the consolidated financial statements.

3

CORUS BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Three Months Ended
	March 31
(in thousands)	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income	$	(284,976	)	$	4,508
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:
Provision for credit losses		193,250			36,800
Depreciation and amortization		855			630
Accretion of investment discounts		(3,332	)		(36,061	)
Deferred income tax expense/(benefit), net of valuation allowance		32,042			(10,130	)
Deferred interest expense from subordinated debentures relating to Trust Preferred Securities		4,149			—
Securities (gains)/losses, net		(273	)		(10,978	)
Commissions, current year holdback and mark-to-market (1)		62			(1,590	)
Loss sharing/forfeitures(1)		(576	)		—
Share-based compensation expense		409			517
Loss of/(excess) tax benefits from share-based payment arrangements		4			(1	)
Loss on other real estate owned, net		42,286			2,948
(Increase)/Decrease in accrued interest receivable		(610	)		5,176
Decrease in accrued interest payable		(1,646	)		(1,002	)
(Increase)/Decrease in taxes receivable and other assets		(10,686	)		8,632
Increase in other liabilities		2,021			10,150
Net cash (used in)/provided by operating activities		(27,021	)		9,599
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities from time deposits with banks		1,208,757			—
Purchases of time deposits with banks		(105,792	)		(300,000	)
Proceeds from maturities of available-for-sale securities		101,494			2,220,651
Proceeds from sales of available-for-sale securities		250,291			60,994
Purchases of available-for-sale securities		(740,643	)		(1,869,110	)
Net increase in loans		(307,883	)		(185,263	)
Recoveries of previously charged-off loans		249			159
Purchases of premises and equipment		(522	)		(1,756	)
Proceeds from sale of other real estate owned		12,735			—
Capitalized expenditures on other real estate owned		(10,165	)		—
Net cash provided by/(used in) investing activities		408,521			(74,325	)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Decrease)/Increase in deposit accounts		(434,603	)		160,687
Decrease in other borrowings, net		(281	)		(7,696	)
(Loss of)/excess tax benefits from share-based payment arrangements		(4	)		1
Cash dividends paid on common shares		—			(13,761	)
Net cash (used in)/provided by financing activities		(434,888	)		139,231
Net (decrease)/increase in cash and cash equivalents		(53,388	)		74,505
Cash and cash equivalents at January 1		308,669			663,207
Cash and cash equivalents at March 31	$	255,281		$	737,712

⁽¹⁾ Pursuant to the Commission Program for Commercial Loan Officers.

See accompanying notes to the consolidated financial statements.

4

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements

1.	Regulatory Actions, Liquidity, and Going Concern Considerations
	As a result of the deepening problems related to our loan portfolio and our current financial condition, Corus Bankshares, Inc. (“Corus” or the “Company”) announced in February 2009 that, at the request of the Federal Reserve Bank of Chicago (the “FRB”) and the Office of the Comptroller of the Currency (the “OCC”), the Company and its wholly-owned subsidiary, Corus Bank, N.A. (the “Bank”), respectively, have entered into a Written Agreement (the “Agreement”) with the FRB and a Consent Order (the “Order”) with the OCC. The Agreement and the Order (collectively, the “Regulatory Agreements”) contain a list of strict requirements ranging from a capital directive, which requires Corus and the Bank to achieve and maintain minimum regulatory capital levels (in the Bank’s case, in excess of the statutory minimums to be classified as well-capitalized), to developing a liquidity risk management and contingency funding plan. In addition, as of May 1, the Bank was notified by the OCC that it is undercapitalized under the OCC’s Prompt Corrective Action rules and, therefore, subject to a number of additional statutory and regulatory requirements, including submission of an acceptable capital restoration plan to the OCC.
	Also as a result of our current financial condition, the Bank is subject to restrictions on the interest rates it may offer to its depositors. Under the applicable restrictions, the Bank cannot pay interest rates higher than 75 basis points above the national average rates for each deposit type. In light of the Bank’s historical practice of paying above average rates both locally and nationally, the Bank’s liquidity may be negatively impacted, possibly materially, due to deposit run-off to the extent that it is unable to continue offering above average rates.
	While the Company intends to take such actions as may be necessary to enable Corus and the Bank to comply with the requirements of the Regulatory Agreements and withstand the potential impact of the interest rate restrictions, there can be no assurance that Corus or the Bank will be able to comply fully with the provisions of the Regulatory Agreements, or that compliance with the interest rate restrictions and the Regulatory Agreements, in particular the regulatory capital requirements, will not have material and adverse effects on the operations and financial condition of the Company and the Bank. Any material failure to comply with the provisions of the Regulatory Agreements could result in further enforcement actions by both the FRB and the OCC, or the placing of the Bank into conservatorship or receivership.
	REGULATORY ACTIONS
	Written Agreement
	The Agreement with the FRB restricts the payment of dividends by the Company, as well as the taking of dividends or any other payment representing a reduction in capital from the Bank, without the prior approval of the FRB. The Agreement further requires that the Company shall not incur, increase, or guarantee any debt, repurchase or redeem any shares of its stock, or pay any interest or principal on subordinated debt or trust preferred securities, without the prior approval of the FRB. The Agreement also requires the Company to develop a capital plan by May 19, 2009, which shall address, among other things, the Company’s and the Bank’s current and future capital requirements, compliance with minimum capital ratios, the source and timing of additional funds necessary to meet future capital requirements, and procedures to notify the FRB within 30 days of each quarter-end if capital ratios fall below the required minimums. The Company is also required to submit cash flow projections for 2009, which were provided to the FRB on April 17, 2009. The Agreement also requires the Company to provide advance notice to the FRB in order to appoint any new director or senior executive officer, which the FRB may approve or disapprove. Finally, the Board of Directors of the Company (the “Board”) is required to submit written progress reports to the FRB within 30 days after the end of each calendar quarter.

5

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

Consent Order

The Order with the OCC requires the Bank, among other things,

• to establish a compliance committee to monitor and coordinate compliance with the Order;

• to achieve and maintain Tier 1 capital at least equal to 9% of adjusted total assets and at least equal to 12% of risk-weighted assets by June 18, 2009;

• to develop a three-year capital plan for the Bank by April 19, 2009, which includes, among other things, specific plans for maintaining adequate capital, a discussion of the sources and timing of additional capital, as well as contingency plans for alternative sources of capital;

• to develop, prior to involvement in any new products or services, or the resumption of commercial real estate lending, a strategic plan covering at least a three-year period, which shall, among other things, include a specific description of the goals and objectives to be achieved, the targeted markets, the specific Bank personnel who are responsible and accountable for the plan, and the appointment of a Chief Credit Officer;

• to revise and maintain by March 20, 2009, a liquidity risk management program, which assesses, on an ongoing basis, the Bank’s current and projected funding needs, and ensures that sufficient funds exist to meet those needs. The program must include specific plans for how the Bank is complying with regulatory restrictions which limit the interest rates the Bank can offer to depositors;

• to revise by May 19, 2009, the Bank’s loan policy and commercial real estate concentration management program. The Bank also must establish a new loan review program to ensure the timely and independent identification of problem loans and modify its existing program for the maintenance of an adequate allowance for loan and lease losses;

• to take immediate and continuing action to protect the Bank’s interest in certain assets identified by the OCC or any other bank examiner by developing a criticized assets report covering the entire credit relationship with respect to such assets;

• to develop by May 19, 2009, an independent appraisal review and analysis process to ensure that appraisals conform to appraisal standards and regulations, and to order, within 30 days following any event that triggers an appraisal analysis, a current independent appraisal or updated appraisal on loans secured by certain properties; and

• to develop by March 20, 2009, a revised Other Real Estate Owned (“OREO”) program to ensure that the OREO properties are managed in accordance with applicable banking regulations.

To date, the Bank has taken several steps to comply with the terms of the Order, including:

• The Board established a Compliance Committee to monitor and coordinate the Bank’s compliance with the provisions of the Order. The Committee consists of two independent directors and one employee director.

6

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

• The Bank delivered to the OCC a three-year capital plan on April 24, 2009, after requesting and receiving a one week extension on the original deadline. The Bank is in the process of working with the OCC and responding to feedback on its initial capital plan submission.

• The Board has submitted a Contingency Funding Plan to the OCC and is monitoring the Bank’s liquidity on a daily, weekly and monthly basis in accordance with the requirements of the Order.

• The initial set of Criticized Asset Reports (“CARs”) for both criticized loans and OREO have been completed as of March 31, 2009, and have been submitted to the Board and OCC for their review. Future CARs will be submitted to both the Bank Board and the OCC on a monthly basis.

• The Board has adopted an OREO Policy. In addition, reports on the status of OREO properties will be provided to the Board on at least a quarterly basis. The Bank is complying with this requirement through its monthly submission of the Criticized Asset and other OREO reports to the Board.

Prompt Corrective Action Notification

On May 1, 2009, based on its March 31, 2009, regulatory Report of Condition and Income (“Call Report”), the Bank received formal notification under the OCC’s Prompt Corrective Action (“PCA”) regime of its “undercapitalized” status. Accordingly, the Bank is subject to numerous mandatory statutory and regulatory requirements, including restrictions on capital distributions; a prohibition on the payment of “management fees” by the Bank to the Company or any other person having control of the Bank; restrictions on asset growth; and a prohibition against any new acquisitions, the establishment of new branch offices, or engaging in any new lines of business without prior approval from the OCC. Moreover, the OCC has discretionary authority to take additional actions with respect to the Bank as if the Bank were significantly undercapitalized, should the OCC make a determination that such additional actions are necessary to carry out the purposes of the PCA statute.

In addition, the Bank is required to submit a capital restoration plan deemed acceptable by the OCC no later than May 22, 2009, or such later time as the OCC may agree. The capital restoration plan must address, among other things, the steps the Bank will take to become adequately capitalized; the levels of capital to be attained during each year in which the plan will be in effect; how the Bank will comply with applicable restrictions and requirements associated with its undercapitalized status; and the types and levels of activities in which the Bank will engage. By statute, the OCC is not permitted to approve the Bank’s capital restoration plan unless the Company submits a written guarantee that the Bank will comply with the terms of the plan until the Bank has been adequately capitalized on average during each of four consecutive calendar quarters. As part of the guarantee, the Company is required to provide appropriate assurances of the Bank’s performance and must also provide assurances that the Company will fulfill any commitments to raise capital made in the capital restoration plan. Such a guarantee would have a priority over most of the other creditors of the holding company in bankruptcy, including the holders of the Company’s trust preferred securities and equity securities. The Company currently has approximately $3.1 billion in liquid assets and its principal obligations consist of approximately $414 million in trust preferred securities.

The Bank is developing a capital restoration plan but no assurances can be provided that it will be able to submit an acceptable plan, including the required Company guarantee. Failure of the Bank to submit an acceptable capital restoration plan would, among other things, result in the Bank becoming “significantly undercapitalized” under the OCC’s PCA rules, and therefore would become subject to additional regulatory restrictions. These restrictions include: requiring a recapitalization of the Bank through the sale of shares and obligations of the Bank, requiring that shares sold must be voting shares, or requiring the Bank to be acquired by another holding company or combined with another institution; imposing additional affiliate transaction restrictions; restricting interest rates the Bank may pay to “the prevailing rates” paid on like deposits in the region where the Bank is located; placing further restrictions on asset growth; placing further restrictions on the Bank’s activities, including the forced reduction or termination of any activity the OCC determines imposes excessive risk; requiring one or more of the following management changes: new election of directors, dismissal of directors or senior management officials, or hiring of senior executive officers; prohibiting the Bank from accepting deposits from correspondent institutions, including renewals and rollovers; prohibiting the Company from making any capital distribution without FRB approval; requiring divestiture of the Bank; or requiring the Bank to take “any other action” the OCC deems appropriate to further the purposes of PCA. In addition, as a significantly undercapitalized institution, the Bank would be prohibited from paying any bonus to a senior executive officer, or paying base compensation in excess of an officer’s prior 12-month average compensation without prior written approval from OCC. In addition to these remedial measures, the Bank and the Company also would be subject to other supervisory action including, among other things, the risk of additional supervisory or enforcement actions against the Company and/or the Board, or the placing of the Bank into conservatorship or receivership.

LIQUIDITY

The Bank must comply with federal restrictions on the interest rates the Bank may offer to its depositors. Under these restrictions, the Bank cannot pay interest rates higher than 75 basis points above the national average rates for each deposit type. This restriction is potentially significant to the Bank due to its historical practice of paying above average rates both locally and nationally.

As background, the Chicago banking market is extremely fragmented (over 140 banks and thrifts) and competitive. As Corus’ needs for additional funding grew over the years, the Bank explored several different deposit gathering strategies, including building new branches and acquiring brokered certificates of deposit. Corus concluded that building new branches was expensive and the success of this strategy uncertain. It was also a strategy that was already being pursued by numerous Chicago-area banks. Brokered deposits were not attractive since they were less likely to be available in a time of crisis. As an alternative, Corus decided that offering above average rates nationally, promoted via the internet, was the most efficient and cost effective strategy for the Bank. The strategy was scalable so deposits could be added or reduced based on the loan funding needs of the Bank and it was cost effective since the Bank wouldn’t be saddled with the overhead of a large branch network when loan volume declined.

7

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

This strategy makes Corus particularly vulnerable to a restriction on the level of interest rates it offers. Management believes Corus’ ability to attract deposits is a function of its ability to continue to offer rates above the national average. To the extent that Corus is restricted from offering high deposit interest rates, liquidity may be negatively impacted, possibly materially.

The current FDIC rules on interest rate restrictions establish that the Bank may not offer interest rates higher than 75 basis points above the rates of interest on deposits offered in the Bank’s normal market area. Corus submitted a plan to the FDIC that presented the Bank’s normal market area as the national market. The FDIC approved our national market designation and our use of the Bankrate.com average national rate table to determine the base rate. Corus began to offer deposit products using these rate limitations on January 24, 2009. From January 24, 2009, through March 31, 2009, Corus experienced deposit run-off of $323 million. However, it should be noted that part of the Bank’s strategy involved shrinking deposits as loan demand declined. For example, our unfunded loan commitments shrank by $322 million during the same period.

On January 27, 2009, a new rule was proposed by the FDIC that would amend its existing rules which impose interest rate restrictions on deposits that can be paid by depository institutions that are not “well-capitalized.” Under this new rule, affected depository institutions would be allowed to pay a “national rate” plus 75 basis points, and the FDIC would set and publish the national rate. To compute the national rate, the FDIC would use all the data that was available from approximately 8,300 banks and thrifts (and their branches) to determine a national average rate for each deposit product. Banks that are not well-capitalized would then be limited to paying 75 basis points over the national average rates set by the FDIC for each deposit product.

We do not know whether there will be changes to the proposed rule or whether it will be adopted at all, or what impact the final rule will have on Corus. However, the Bank has historically paid above average rates locally and nationally, and as a result, the restrictions on interest rates could cause a decrease in both new and existing deposits, which would adversely impact our business, financial condition, and results of operations.

GOING CONCERN

Corus is suffering from the extraordinary effects of what may ultimately be the worst economic downturn since the Great Depression. The effects of the current environment are being felt across many industries, with financial services and residential real estate being particularly hard hit. The effects of the downturn have been particularly severe during the last 180 days of 2008, and have continued into 2009. Corus, with a portfolio consisting primarily of condominium construction loans, many in the hard hit areas of Arizona, Nevada, south Florida and southern California, has seen a rapid and precipitous decline in the value of the collateral securing our loan portfolio. Thus, we are experiencing significant loan quality issues. The net loss of $285.0 million recorded by the Company in the first quarter of 2009 was primarily the result of significant increases in the provision for credit losses. The impact of the current financial crisis in the U.S. and abroad is having far-reaching consequences and it is difficult to say at this point when the economy will begin to recover. As a result, we cannot assure you that we will be able to resume profitable operations in the near future, or at all.

8

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

We have determined that significant additional sources of capital will be required for us to continue operations through 2009 and beyond. The Company’s Board of Directors has formed a Strategic Planning Committee. The Committee has hired an investment banking firm to seek all strategic alternatives to enhance the stability of the Company including a capital investment, sale, strategic merger or some form of restructuring. There can be no assurance that the Company will succeed in this endeavor and be able to comply with the new regulatory requirements. In addition, a transaction, which would likely involve equity financing, would result in substantial dilution to our current stockholders and could adversely affect the price of our common stock. If the Company does not comply with the new capital requirements contained in the Order, the regulators may take additional enforcement action against the holding company and the Bank.

It remains to be seen if those efforts will be successful, either on a short-term or long-term basis. In addition, it is unclear at this point what impact, if any, the interest rate restrictions included in the Order will have on Corus’ continued ability to maintain adequate liquidity. As a result of our financial condition, our regulators are continually monitoring our liquidity and capital adequacy. Based on their assessment of our ability to continue to operate in a safe and sound manner, our regulators at any time may take other and further actions, including placing the Bank into conservatorship or receivership, to protect the interests of depositors insured by the Federal Deposit Insurance Corporation.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future, and do not include any adjustments to reflect the possible future effects on the recoverability or classification of assets, and the amounts or classification of liabilities that may result from the outcome of any regulatory action, which would affect our ability to continue as a going concern.

9

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

2.	Consolidated Financial Statements
	The consolidated financial statements include the accounts of Corus, the Bank and various Bank subsidiaries created for the sole purpose of holding real estate assets obtained through foreclosure. The interim Consolidated Balance Sheets, Statements of Income, Changes in Shareholders’ Equity, and Cash Flows are unaudited. The interim financial statements reflect all adjustments (consisting only of normal recurring accruals) that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Pursuant to SEC rules, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted from these financial statements unless significant changes have taken place since the end of the most recent fiscal year. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Corus’ Annual Report on Form 10-K for the year ended December 31, 2008. The results of operations for the interim period may not be indicative of results to be expected for the full year.
	Change in Accounting Estimate
	In the first quarter of 2009, the Company reviewed the various assumptions within its Allowance for Credit Losses (the “Allowance”) analysis. This review was performed as a result of the rapidly changing credit environment. As a result of this review, among other changes, the Company reduced the historical loss factor used in the general reserve portion of the Allowance calculation from 24 months to 12 months to be more reflective of the current credit environment. In accordance with Financial Accounting Standards Board (“FASB”) No. 154, “Accounting Changes and Error Corrections,” this change is deemed as a change in accounting estimate and has been accounted for prospectively, effective January 1, 2009. The effect of this change in estimate increased the net loss approximately $85 million and increased the basic and diluted loss per share by $1.59 for the quarter ended March 31, 2009.
3.	Recent Accounting Pronouncements
	There have been no developments to recent accounting pronouncements, including the expected dates of adoption and estimated effects on the Company’s consolidated financial statements, from those disclosed in the Company’s 2008 Annual Report on Form 10-K, except for the following:
	In April 2009, the FASB issued FASB Staff Position No. FAS 141(R)-1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies” (“FSP 141(R)-1”) to amend SFAS 141 (revised 2007) “Business Combinations.” FSP 141(R)-1 addresses the initial recognition, measurement and subsequent accounting for assets and liabilities arising from contingencies in a business combination, and requires that such assets acquired or liabilities assumed be initially recognized at fair value at the acquisition date if fair value can be determined during the measurement period. If the acquisition-date fair value cannot be determined, the asset acquired or liability assumed arising from a contingency is recognized only if certain criteria are met. This FSP also requires that a systematic and rational basis for subsequently measuring and accounting for the assets or liabilities be developed depending on their nature. This FSP shall be effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is during or after 2010. The provisions of FSP 141(R)-1 will only impact Corus if the Company is party to a business combination after the statement has been adopted.

10

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

	In April 2009, the FASB issued FASB Staff Position SFAS 107-1 and Accounting Principles Board (APB) Opinion No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“SFAS 107-1 and APB 28-1”). This amends FASB Statement No. 107, “Disclosures about Fair Values of Financial Instruments,” to require disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements. The proposal also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in all interim financial statements. This proposal is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The Company plans to adopt SFAS 107-1 and APB 28-1 and provide the additional disclosure requirements for second quarter 2009.
	In April 2009, the FASB issued FASB Staff Position SFAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“SFAS 157-4”). This provides additional guidance in estimating fair value when the volume and level of activity for the asset or liability have significantly decreased as well as indicating circumstances that indicate a transaction is not orderly. SFAS 157-4 is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The Company plans to adopt the provisions of SFAS 157-4 during second quarter 2009; however its adoption is not expected to have a material impact on its consolidated financial statements.
	In April 2009, the FASB issued FASB Staff Position SFAS 115-2 and SFAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments.” This provides guidance in determining whether impairments in debt securities are other than temporary, and modifies the presentation and disclosures surrounding such instruments. This Staff Position requires separate display of losses related to credit deterioration and losses related to other market factors. When an entity does not intend to sell the security and it is more likely than not that an entity will not sell the security before recovery of its cost basis, it must recognize the credit component of other-than-temporary impairment in earnings and the remaining portion in other comprehensive income. This Staff Position is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The Company plans to adopt the provisions of this Staff Position during second quarter 2009; however its adoption is not expected to have a material impact on its consolidated financial statements.
4.	Allowance For Credit Losses
	The Allowance for Credit Losses analysis incorporates numerous quantitative measures including historical losses, changes to loan balances and unfunded commitments, and credit quality, as well as various qualitative factors. The Allowance for Credit Losses is comprised of the Allowance for Loan Losses and a separate Liability for Credit Commitment Losses. The Allowance for Loan Losses is a reserve against funded loan amounts, while the Liability for Credit Commitment Losses is a reserve against unfunded commitments. In the aggregate, the Allowance for Credit Losses had a balance of $432.7 million at March 31, 2009, which was comprised of a $338.6 million Allowance for Loan Losses and a $94.1 million Liability for Credit Commitment Losses.

11

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

In accordance with the results of Corus’ analysis, the Company had the following changes in the Allowance for Credit Losses:

	Three Months Ended
	March 31
(in thousands)	2009			2008
Balance at beginning of period	$	304,907		$	76,992
Provision for credit losses		193,250			36,800
Charge-offs		(65,668	)		(19,124	)
Recoveries		249			159
Balance at March 31	$	432,738		$	94,827

5.	Impaired Loans
	In accordance with Statement of Financial Accounting Standards No. 114, “Accounting by Creditors for Impairment of a Loan (as amended)” (“SFAS 114”), Corus classifies loans as impaired if, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.
	The following table presents details of impaired loans:

	Outstanding Balance of Impaired Loans (1)
	March 31		December 31		March 31
(in millions)	2009		2008		2008
Loans with a specific reserve	$	907	$	645	$	120
Loans with no specific reserve, but with an associated charge-off		554		688		182
Loans with no specific reserve and no associated charge-off		573		702		245
Total Impaired Loans	$	2,034	$	2,035	$	547
Specific reserve on impaired loans	$	137	$	141	$	11

⁽¹⁾ To the extent that Corus has both a first mortgage and a mezzanine loan associated with the same project, the loans are combined for purposes of the above table.

For the three months ended March 31, 2009 and 2008, average impaired loans totaled $2.1 billion and $537 million, respectively. Interest income recognized on impaired loans during the first quarter of 2009 and 2008 was $0.6 million and $2.3 million, respectively.

12

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

The table below illustrates the negative impact of nonaccrual loans on Corus’ interest income:

	Three Months Ended
	March 31
(in thousands)	2009		2008
Gross amount of interest that would have been recorded at the original rate	$	38,413	$	8,805
Interest that was recognized in income		408		413
Negative impact (foregone interest)	$	38,005	$	8,392

At March 31, 2009, impaired loans included one accruing troubled debt restructuring loan (“TDR”) with a balance of $35 million. The difference in interest income due to the restructuring of the loan was immaterial for the first quarter of 2009. At March 31, 2008, impaired loans included a different accruing TDR with a balance of $125 million. Interest income was $1.1 million lower in the first quarter of 2008 than it otherwise would have been as a result of the restructuring. The loan was paid off in full in March 2009.

6. Other Real Estate Owned

Other real estate owned (“OREO”) is comprised of real estate acquired, generally either through foreclosure or deed-in-lieu of foreclosure, in partial or full satisfaction of loans and is included as a separate line item in the balance sheet.

These properties are recorded at the lower of cost or estimated realizable value at the date of foreclosure, thus establishing a new cost basis. After foreclosure, valuations are performed at least quarterly by management. Subsequent decreases in value are reported as adjustments to the carrying amount and are included as a component of noninterest expense. Significant property improvements may be capitalized to the extent that the carrying value does not exceed the estimated realizable value. Disposal of an OREO asset may be achieved through the sale of the property as a whole to a bulk purchaser or via the sale of individual units. Adjusted cost basis is used to determine gains or losses on individual unit sales.

Gains or losses from the sale of OREO, as well as rental income and expenses from operations, are included in noninterest expense.

The Company foreclosed on six additional loans during the first quarter, bringing the total OREO portfolio to 16. A rollforward of the OREO activity since December 31, 2008, is as follows:

(dollars in thousands)	Amount
Balance at December 31, 2008	$	408,987
Additions:
Transfers from loans		134,945
Capitalized expenditures		10,165
Subtractions:
Impairment charges		(44,650	)
OREO sales — individual units		(10,371	)
Balance at March 31, 2009	$	499,076

13

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

As of the dates below, Corus’ OREO portfolio consisted of the following properties, listed by major metropolitan area:

	March 31				December 31				March 31
	2009				2008				2008
(dollars in thousands)	#		Amount		#		Amount		#		Amount
Florida:
Miami		1	$	73,235		1	$	80,906		1	$	29,000
Tampa		1		9,520		1		11,216		—		—
Orlando		1		8,627		1		8,627		—		—
Panama City		1		88,574		1		96,788		—		—
Florida Total		4		179,956		4		197,537		1		29,000
Nevada:
Reno		1		87,144		1		107,729		—		—
Las Vegas		2		74,452		—		—		—		—
Nevada Total		3		161,596		1		107,729		—		—
California:
Los Angeles		1		43,039		1		43,039		—		—
San Diego		2		46,606		1		21,034		1		19,171
California Total		3		89,645		2		64,073		1		19,171
Atlanta		2		37,609		1		20,251		—		—
Phoenix/Scottsdale		3		25,550		1		14,677		—		—
Chicago		1		4,720		1		4,720		1		5,003
Total		16	$	499,076		10	$	408,987		3	$	53,174

Prior to Corus’ taking possession of the OREO properties, the loans were categorized by the following collateral type:

	March 31				December 31				March 31
	2009				2008				2008
(dollars in thousands)	#		Amount		#		Amount		#		Amount
Condominium:
Construction		9	$	432,896		6	$	369,747		1	$	19,171
Conversion		6		61,460		3		34,520		1		29,000
Condominium Total		15		494,356		9		404,267		2		48,171
Other CRE
Office		1		4,720		1		4,720		1		5,003
Total		16	$	499,076		10	$	408,987		3	$	53,174

Eight of the OREO properties are currently being marketed for bulk sale. All but one of these properties is ready for occupancy and six of the eight properties are currently being operated as rental properties.

The other eight OREO properties are currently being sold as condominiums, on a unit-by-unit basis. Corus has sold 3% of these properties’ units since they became OREO.

14

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

The net expense associated with both OREO properties and loans pending foreclosure (protective advances) was as follows:

	Three Months Ended
	March 31
(in thousands)	2009			2008
OREO operating expenses	$	12,411		$	1,002
Protective advances		10,695			107
Rental/other income		(2,254	)		(706	)
Total	$	20,852		$	403

7.	Subordinated Debentures relating to Trust Preferred Securities
	As of March 31, 2009, Corus had $414.0 million in floating rate junior subordinated notes (the “Debentures”) which included the original issuance of $404.6 million in Debentures, as well as $9.4 million in deferred interest payments related to those Debentures. The Debentures were issued to unconsolidated subsidiary trusts of the Company (the “Trusts”). Each Trust’s sole purpose is to issue Trust Preferred Securities, and then use the proceeds of the issuance to purchase debentures with terms essentially identical to the Trust Preferred Securities, from the Company.
	The Debentures each mature 30 years from their respective issuance date, but are redeemable (at par) at Corus’ option at any time commencing on the fifth anniversary of their issuance (or upon the occurrence of certain other prescribed events). Furthermore, while interest payments on the Debentures are payable quarterly, so long as an event of default has not occurred, Corus may defer interest payments for up to 20 consecutive quarters. Events of default under the terms of the debenture agreements include failure to pay interest after 20 consecutive quarters of deferral, failure to pay all principal and interest at maturity, or filing bankruptcy.
	The deferral provisions were intended to provide Corus with a measure of financial flexibility during times of financial stress due to market conditions, such as the current state of the financial and real estate markets. During the deferral period Corus is precluded from declaring or paying any dividends to common shareholders or repurchasing its common stock, among other restrictions.
	On November 18, 2008, Corus’ Board of Directors (the “Board”) elected to defer further interest payments on each of the Debentures in order to conserve cash at the holding company. As no default has occurred, Corus exercised the right to defer interest payments for up to 20 consecutive quarters. The Company continues to accrue interest expense and, under the terms of the Debentures, is required to bring the interest payments current in the fourth quarter of 2013. The Company has provided appropriate notice of its election to defer interest payments to the Trustee of each Trust as required by the respective indentures.
	On February 18, 2009, the Company entered into the Agreement with the FRB. The Agreement restricts the Company from paying any interest or principal on subordinated debt or trust preferred securities, without the prior approval of the FRB. While no interest payments are required until 2013, the existence of the Agreement could ultimately result in a default under the provision of the Debentures.

15

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

	Interest and fees included in interest expense totaled $4.1 million and $7.1 million for three months ended March 31, 2009 and 2008, respectively. All of the outstanding Debentures are variable-rate, with interest rates ranging from three-month LIBOR plus 1.33% to three-month LIBOR plus 3.10%, resetting quarterly. The scheduled maturities of the Debentures range from 2033 through 2037.
8.	Regulatory Capital and Ratios
	The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory — and possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on the Company’s and Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.
	As presented in Note 1 to the consolidated financial statements, on February 18, 2009, the Company announced that, in coordination with, and at the request of, both the FRB and the OCC, the Company and the Bank, respectively, have entered into the Agreement with the FRB and the Order with the OCC. While the Agreement requires Corus to develop a capital plan to address the Company’s and the Bank’s capital requirements, it did not contain any changes with respect to the minimum capital ratios required for the Company. The Order, however, increases significantly the minimum capital ratios for the Bank to achieve and maintain by June 18, 2009. Under the Order, the minimum capital ratios are as follows: Tier 1 Leverage was increased to 9% and Tier 1 Risk-Based was increased to 12%. There was no change to the Total Risk-Based ratio, but, by definition it cannot be lower than the Tier 1 Risk-Based ratio of 12%.
	As of May 1, 2009, based on its March 31, 2009 Call Report, the Bank was not in compliance with the previous minimum capital ratios and was classified as “undercapitalized” under the OCC’s Prompt Corrective Action rules. The OCC may require an undercapitalized bank to comply with certain mandatory or discretionary supervisory actions as if the bank were in the next lower capital category. Future noncompliance with regulatory capital requirements raises substantial doubt about the Bank’s ability to stay solvent and the Company’s ability to continue as a going concern. In addition, the OCC could issue a Prompt Corrective Action directive or take other regulatory action, which could result in the Bank being placed into conservatorship or receivership and as a result could also cause the Company to be unable to continue as a going concern.
	At this point in the housing cycle, we are experiencing significant loan quality issues. The impact of the current financial crisis in the U.S. and abroad is having far-reaching consequences and it is difficult to say at this point when the economy will begin to recover. As a result, we cannot assure you that we will be able to resume profitable operations in the near future, or at all.
	We have determined that significant additional sources of capital will be required for us to continue operations through 2009 and beyond. The Company’s Board of Directors has formed a Strategic Planning Committee. The Strategic Planning Committee has hired an investment banking firm to seek all strategic alternatives to enhance the stability of the Company including a capital investment, sale, strategic merger or some form of restructuring, however, there can be no assurance that the Company will succeed in this endeavor and be able to comply with the new regulatory requirements. If the Company does not comply with the new capital requirements contained in the Order, the regulators may take additional enforcement action against the holding company and the Bank.

16

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-adjusted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). The Company and the Bank did not meet the applicable capital adequacy requirements as of March 31, 2009.

As noted above, as of May 1, 2009, the Bank was “undercapitalized” under the regulatory framework for prompt corrective action based on its March 31, 2009 Call Report. Below is a summary of both consolidated and Bank regulatory capital ratios:

												To qualify as “Adequately
							Minimum Capital					Capitalized” Under Prompt
	Actual						Requirement					Corrective Action Provisions (1)
(in millions)	Amount			Ratio			Amount		Ratio			Amount		Ratio
As of March 31, 2009
Tier 1 Leverage (2)
Corus Bankshares, Inc.	$	(3	)		0.0	%	$	327		4.0	%		NA		NA
Corus Bank, N.A.		341			4.2	%		325		4.0	%	$	325		4.0	%
Tier 1 Risk-Based (3)
Corus Bankshares, Inc.	$	(3	)		(0.1	)%	$	232		4.0	%		NA		NA
Corus Bank, N.A.		341			5.9	%		230		4.0	%	$	230		4.0	%
Total Risk-Based (4)
Corus Bankshares, Inc.	$	(3	)		(0.1	)%	$	464		8.0	%		NA		NA
Corus Bank, N.A.		418			7.3	%		461		8.0	%	$	461		8.0	%

NA — Not applicable.
(1)	The Bank cannot be deemed to be “well capitalized” under the prompt corrective action provisions pursuant to the Order. Minimum capital and ratios to be “adequately capitalized” disclosed because the Bank was “undercapitalized” at March 31, 2009.
(2)	Tier 1 capital, which is shareholders’ equity plus qualifying trust preferred securities, if any, (Holding Company only) and unrealized losses from defined benefit pension plan less goodwill, disallowed portion of deferred income taxes and unrealized gains on available-for-sale securities; computed as a ratio to quarterly average assets less goodwill, disallowed portion of deferred income taxes and unrealized gains on available-for-sale securities.
(3)	Tier 1 capital; computed as a ratio to risk-adjusted assets.
(4)	Total risk-based capital (equal to Tier 1 capital plus allowable trust preferred securities (Holding Company only) that do not qualify for Tier 1 capital treatment, qualifying loan loss allowance and SFAS 115 gain); computed as a ratio to risk-adjusted assets.

17

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

											To qualify as “Well-
						Minimum Capital					Capitalized” Under Prompt
	Actual					Requirement					Corrective Action Provisions
(in millions)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2008
Tier 1 Leverage (1)
Corus Bankshares, Inc.	$	377		4.4	%	$	345		4.0	%		NA		NA
Corus Bank, N.A.		622		7.2	%		344		4.0	%	$	431		5.0	%
Tier 1 Risk-Based (2)
Corus Bankshares, Inc.	$	377		6.2	%	$	245		4.0	%		NA		NA
Corus Bank, N.A.		622		10.2	%		244		4.0	%	$	367		6.0	%
Total Risk-Based (3)
Corus Bankshares, Inc.	$	755		12.3	%	$	490		8.0	%		NA		NA
Corus Bank, N.A.		701		11.5	%		489		8.0	%	$	611		10.0	%
As of March 31, 2008
Tier 1 Leverage (1)
Corus Bankshares, Inc.	$	1,012		11.2	%	$	362		4.0	%		NA		NA
Corus Bank, N.A.		941		10.5	%		357		4.0	%	$	447		5.0	%
Tier 1 Risk-Based (2)
Corus Bankshares, Inc.	$	1,012		13.8	%	$	294		4.0	%		NA		NA
Corus Bank, N.A.		941		13.0	%		290		4.0	%	$	436		6.0	%
Total Risk-Based (3)
Corus Bankshares, Inc.	$	1,250		17.0	%	$	589		8.0	%		NA		NA
Corus Bank, N.A.		1,032		14.2	%		581		8.0	%	$	726		10.0	%

NA — Not applicable.
(1)	Tier 1 capital, which is shareholders’ equity plus qualifying trust preferred securities, if any, (Holding Company only) and unrealized losses from defined benefit pension plan less goodwill, disallowed portion of deferred income taxes and unrealized gains on available-for-sale securities; computed as a ratio to quarterly average assets less goodwill, disallowed portion of deferred income taxes and unrealized gains on available-for-sale securities.
(2)	Tier 1 capital; computed as a ratio to risk-adjusted assets.
(3)	Total risk-based capital (equal to Tier 1 capital plus allowable trust preferred securities (Holding Company only) that do not qualify for Tier 1 capital treatment, qualifying loan loss allowance and SFAS 115 gain); computed as a ratio to risk-adjusted assets.

18

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

Concentrations in Commercial Real Estate Lending

In December 2006, the OCC, together with the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (the “Agencies”), issued guidance entitled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices” (the “Guidance”). The Guidance indicates it is intended to “reinforce and enhance the Agencies’ existing regulations and guidelines for real estate lending” and to “remind institutions that strong risk management practices and appropriate levels of capital are important elements of a sound Commercial Real Estate (“CRE”) lending program, particularly when an institution has a concentration in CRE loans.” Importantly, the Guidance states that it, “...does not establish specific CRE lending limits; rather, it promotes sound risk management practices and appropriate levels of capital that will enable institutions to continue to pursue CRE lending in a safe and sound manner.”

While the Guidance states that it, “...does not define a CRE concentration,” it does outline ‘supervisory monitoring criteria’ that, “...the Agencies will use as high-level indicators to identify institutions potentially exposed to CRE concentration risk.” Those criteria are: “(1) Total loans for construction, land development, and other land representing 100 percent or more of the institution’s total capital, or (2) Total commercial real estate loans representing 300% or more of the institution’s total capital, and the outstanding balance of the institution’s commercial real estate portfolio increasing by 50% or more during the prior 36 months.”

As of March 31, 2009, the Bank had balances outstanding for construction, land development, and other land-secured loans totaling $3.7 billion, which represented 878% of the Bank’s total capital. The Bank’s capital is essentially equal to its shareholder equity plus loan loss reserves (please see table above for further information). Also as of March 31, 2009, the Bank had commercial real estate loan balances outstanding totaling $4.1 billion, which represented 994% of the Bank’s total capital. As a result, the Bank’s ratios were both significantly greater than the regulatory criteria as of March 31, 2009.

The Order issued by the OCC includes a requirement that the Bank “adopt, implement and thereafter ensure Bank adherence to” a revised written commercial real estate (“CRE”) concentration management program (the “Program”) designed to manage the risk in the Bank’s CRE portfolio in accordance with regulatory guidelines. While Corus intends to comply with the OCC’s request, if and when the Bank resumes commercial lending, we will not be able to change the Bank’s commercial real estate concentration until such time as we originate new loans outside of the commercial real estate sector.

Dividend Restrictions

The Agreement entered into with the FRB prohibits the payment of any dividends, by either the Bank or the holding company, without FRB approval. The capital plan to be adopted pursuant to the OCC Order imposes additional restrictions on the Bank’s ability to declare a dividend, including, among other things, a prior written determination of no supervisory objection by the OCC. The payment of dividends by the Bank is further restricted by various other federal regulatory limitations. Among those restrictions, a national bank may not declare a dividend if the total amount of all dividends declared (including any proposed dividend) by the national bank in any calendar year exceeds the total of the national bank’s retained net income of that year to date, combined with its retained net income of the preceding two years. Based on these constraints, the Bank was not permitted to distribute any amount to the Company at March 31, 2009.

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CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

9.	Net Income/(Loss) Per Share
	Net income/(loss) per share was calculated as follows:

	Three Months Ended
	March 31
(in thousands, except per-share data)	2009			2008
Numerator:
Net income/(loss) attributable to common shares	$	(284,976	)	$	4,508
Denominator:
Average common shares outstanding — Basic		53,711			55,012
Effect of dilutive potential common shares		—			817
Average common shares outstanding — Diluted		53,711			55,829
Net income/(loss) per share:
Basic	$	(5.31	)	$	0.08
Diluted		(5.31	)		0.08

	For the three months ended March 31, 2009, diluted net income per share excluded the impact of 3,548,791 potential common shares because the effect would have been antidilutive. In addition, for the three months ended March 31, 2008, stock options outstanding to purchase 3,255,010 shares were not included in the computation of diluted earnings per share because the effect would have been antidilutive as the options were out-of-the money.
10.	Employee Benefit Plans
	Corus maintains a noncontributory defined benefit pension plan. No contributions were made during the three months ended March 31, 2009 and 2008. Based on information provided by Corus’ actuary, Corus does not expect to be required to make contributions to its pension plan for the remainder of 2009. Subject to the impact of actual events and circumstances that may occur during the remainder of 2009, Corus may make contributions to its pension plan, but the amount of any such contributions has not yet been determined.
	Net periodic benefit cost was comprised of the following:

	Three Months Ended
	March 31
(in thousands)	2009			2008
Service cost	$	269		$	244
Interest cost		417			401
Expected gain on plan assets		(390	)		(449	)
Actuarial Loss		162			—
Net Periodic Benefit Cost	$	458		$	196

20

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

11.	Income Taxes
	Corus’ effective tax rate for the first quarter of 2009 was (0.1)% as compared to 14.7% for the first quarter of 2008. A reconciliation of the statutory federal income tax rate to the effective rate is as follows:

	Three Months Ended
	March 31
	2009			2008
Statutory federal income tax rate		35.0	%		35.0	%
Valuation allowance		(36.7	)		—
State taxes		1.6			(15.5	)
Dividends received deduction		—			(5.6	)
Other, net		—			0.8
Effective Rate		(0.1	)%		14.7	%

	During the first quarter of 2009, Corus recorded a net deferred tax asset (“DTA”) valuation allowance of approximately $104.6 million. The adjustment was recorded in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). Under SFAS 109, management is required to assess whether it is more likely than not that some portion or all of the company’s DTA will not be realized. The rules require that, to the extent that tax rules could potentially limit the ultimate realization of the DTA (generally through a “carryback” to prior year’s taxable income), the assets be written down. While the benefit of the DTA could still materialize in the future, accounting rules limit the extent to which a company can utilize projections of future income to support current DTAs.
	Guidance for interim reporting of income taxes is provided in paragraphs 19 and 20 of APB 28 as well as FASB Interpretation No. 18. A company is required to project what its effective tax rate will be for the full year (including the impact of any valuation allowances for temporary differences originating during the year). This annualized effective tax rate should then be applied to each interim quarter during the year. The change in valuation allowance is attributable to deferred tax assets (including DTAs related to the allowance for loan losses and valuation adjustments to OREO properties) that originated in 2009. Therefore, management determined that it was appropriate to adjust the estimated annual effective tax rate for the year.
	As of March 31, 2009, the net DTA, after the impact of the valuation allowance, totaled approximately $11.3 million.
12.	Fair Value Measurements
	The Company adopted Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”), effective January 1, 2008. SFAS 157 defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements for fair value measurements. In accordance with FSP 157-2, the Company began to apply SFAS 157 for nonfinancial assets and nonfinancial liabilities on January 1, 2009.
	In April 2009, FASB Staff Position No. FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,” was issued to clarify the application of SFAS 157 for transactions that are not orderly in an inactive market and will be effective beginning in the second quarter of 2009.

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CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

Fair Value Hierarchy

SFAS 157 states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Under SFAS 157, fair value measurements are not adjusted for transaction costs. SFAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under SFAS 157 are described below:

Level 1 — Valuation is based upon quoted prices for identical instruments traded in active markets. An active market is one in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever possible;

Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuation techniques for which all significant assumptions are observable or can be corroborated by data in the market;

Level 3 — Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques primarily include the use of discounted cash flow models.

Note: An adjustment to a Level 2 input that is significant to the fair value measurement in its entirety might render the measurement a Level 3 measurement.

Fair Value Methodologies

The Company used the following methodologies to measure the fair value of its assets on a recurring basis:

Available-for-sale securities — Where quoted prices are available in an active market, securities are classified in Level 1 of the valuation hierarchy. The majority of the Company’s available-for-sale investments however, are fixed income instruments that are not quoted on an exchange, but are traded in active markets. The fair value of these securities is based on quoted market prices obtained from an external pricing service. In obtaining such data from the pricing service, Corus has evaluated the methodologies used to develop the fair values in order to determine whether such valuations are representative of an exit price in the Company’s principal markets. Corus’ principal markets for its securities portfolio are the secondary institutional markets, with an exit price that is predominantly reflective of bid level pricing in those markets. These securities are classified in Level 2 of the valuation hierarchy and include U.S. Government agencies and FDIC guaranteed bank notes.

22

CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

Interest rate swap agreements — These agreements entered into by the Company are executed in the dealer market and priced based on market quotes obtained from the counterparty that transacted the swap agreement. The market quotes were developed by the counterparty using market observable inputs, which primarily include the London Interbank Offered Rate (“LIBOR”) for swaps. As the fair value estimates for interest rate swaps are primarily based on LIBOR, which is a market observable input, the agreements are classified in Level 2 of the valuation hierarchy. The Company also considers nonperformance risk, including the likelihood of default by itself and its counterparties, when evaluating whether market quotes from the counterparty are representative of an exit price. The Company has a policy of executing derivative transactions only with highly rated and pre-approved counterparties. Furthermore, both credit risk of our counterparties and the Company’s default risk are mitigated through the pledging of collateral when certain thresholds are reached. Because of this collateral requirement, the Company concluded that the credit risk implied in the LIBOR swap curve was representative of the credit risk for the Company’s potential derivative liabilities. For these reasons, nonperformance risk is considered low and, accordingly, any such credit risk adjustments to the Company’s swap agreements would be immaterial.

We may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. The Company used the following methodologies to measure the fair value of its assets on a nonrecurring basis:

Loan impairment assessments — This occurs in situations where a loan is reviewed in accordance with Statement of Financial Accounting Standards No. 114, “Accounting by Creditors for Impairment of a Loan (as amended)” (“SFAS 114”) and the fair value of the loan is determined to be less than the recorded investment in the loan.

In accordance with SFAS 114, the fair value of a loan is determined based on either the present value of expected future cash flows discounted at the loan’s effective interest rate or as a practical expedient, based on the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. Considering the nature of Corus’ lending, the fair value of the collateral is the primary method utilized. Collateral valuations are based on either appraisals or internally-developed models.

As a result of current market conditions and the low level of real estate transactions, management utilizes fair value models which use unobservable inputs. More specifically, the unobservable inputs used in valuation models may include the extent to which presale buyers will ultimately close on their units, pricing (net of costs to sell) for the future sale of condominium units and the timeframe over which such sales may take place. In addition, to the extent that unit rentals can partially offset the cost to carry a project, occupancy percentages and rental rates are projected. Since Corus’ lending tends to be geographically concentrated, management has the benefit of observing data associated with many different loans in the same general location as a basis for deriving its estimates. As a result of these unobservable inputs, these measurements are classified in Level 3 of the valuation hierarchy.

OREO impairment assessments — This occurs in situations where an OREO property is reviewed in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets (as amended)” (“SFAS 144”), and the fair value of the property less costs to sell is determined to be less than the carrying amount of the property.

The valuations are based on either appraisals or internally-developed models, both of which use unobservable inputs similar to that of the loan impairment assessments discussed above. Thus, these measurements are classified in Level 3 of the valuation hierarchy.

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CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

The table below presents the balances of assets measured at fair value on a recurring or nonrecurring basis (no liabilities were measured at fair value at March 31, 2009):

	Fair Value at March 31, 2009
(in thousands)	Level 1		Level 2		Level 3		Total
Recurring basis:
Available-for-sale securities:
U.S. Government agencies	$	—	$	1,323,958	$	—	$	1,323,958
Other securities		2,523		696,374		—		698,897
Interest rate swap agreements		—		1,811		—		1,811
Total	$	2,523	$	2,022,143	$	—	$	2,024,666
Nonrecurring basis:
Loans, net	$	—	$	—	$	1,101,471	$	1,101,471
Other real estate owned		—		—		346,560		346,560
Total	$	—	$	—	$	1,448,031	$	1,448,031

The loans measured at fair value are net of specific reserves of $137 million, but exclude costs to sell of $35 million. For the three months ended March 31, 2009, total losses of $62 million were recorded to reflect the fair value adjustments.

The OREO measured at fair value exclude costs to sell of $12 million. For the three months ended March 31, 2009, total losses of $45 million were recorded to reflect the fair value adjustments. The amounts represent the fair value and related losses of OREO that was written down during the quarter and subsequent to its initial classification as OREO.

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CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

13.	Derivatives
	The Company adopted Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities,” effective January 1, 2009. The Company enters into certain derivative transactions primarily as part of its overall interest rate risk management process. Corus does not enter into derivative contracts for speculative purposes. Corus’ use of derivatives is limited to interest rate swaps which convert fixed rate brokered certificates of deposit to floating rate and are designated as fair value hedges under Statement of Financial Accounting Standards, No. 133, “Accounting for Derivative Instruments and Hedging Activities (as amended)” (“SFAS 133”). The swaps qualify for the shortcut method of accounting under SFAS 133. Based on this shortcut method of accounting treatment, no ineffectiveness is assumed.
	The following table reflects the change in fair value for interest rate contracts and the related hedged items included in the Consolidated Statements of Income:

		Three Months Ended
		March 31
(in thousands)	Income Statement Caption	2009			2008
Change in fair value on interest rate swaps hedging brokered deposits	Interest Expense — Deposits	$	390		$	(3,417	)
Change in fair value on brokered deposits — hedged item	Interest Expense — Deposits		(390	)		3,417

The following table reflects the fair value hedges included in the Consolidated Balance Sheets:

	March 31, 2009				December 31, 2008				March 31, 2008
	Notional		Fair		Notional		Fair		Notional		Fair
(in thousands)	Amount		Value		Amount		Value		Amount		Value
Included in other assets:
Interest rate swaps related to brokered deposits	$	79,000	$	1,811	$	92,500	$	2,201	$	194,003	$	3,270

14.

Legal Proceedings

During the first quarter of 2009, Corus and Mr. Robert J. Glickman, the Company’s former Chief Executive Officer, were named as defendants in a purported class action lawsuit filed in the U.S. District Court for the Northern District of Illinois alleging violations of federal securities laws. In April 2009, a second purported securities class action lawsuit was filed in the Northern District of Illinois against Corus and Mr. Glickman and adding as additional defendants Tim H. Taylor and Michael E. Dulberg. Later in April 2009, two additional securities class actions were filed in the Northern District of Illinois against Corus and Messrs. Glickman, Taylor, and Dulberg. One of the two most recent lawsuits also added as additional defendants members of the Company’s Board of Directors, specifically Messrs. Joseph P. Glickman, Robert J. Buford, Kevin R. Callahan, Rodney D. Lubeznik, Michael J. McClure, and Peter C. Roberts. These lawsuits, brought on behalf of shareholders who purchased the Company’s common stock between January 25, 2008 and January 30, 2009, allege primarily that the defendants violated the federal securities laws by disseminating materially false and misleading statements during the above-described period. The lawsuits seek unspecified damages.

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CORUS BANKSHARES, INC.
Notes to Consolidated Financial Statements — continued

	Corus and the individual defendants filed an unopposed motion to reassign the related, second-filed case to the judge assigned to the first-filed lawsuit, and that motion has been granted. Corus expects that the third-filed and fourth-filed cases will also be reassigned to this judge. Once all related cases are before the same judge, a lead plaintiff and counsel will be selected for these lawsuits and an amended complaint is then likely to be filed combining all four lawsuits. Defendants will have 45 days after the amended complaint is filed to answer or move to dismiss the complaint.
	Because these lawsuits were recently filed and there are significant uncertainties involved in any potential class action litigation, management is unable to predict the outcome of the purported class action lawsuits and therefore cannot currently reasonably determine the estimated future impact on the financial condition or results of operations of the Company. Corus and the individuals named intend to vigorously defend these lawsuits.
	Corus is involved in various legal proceedings involving matters that arise in the ordinary course of business. The consequences of these proceedings are not presently determinable but, in the opinion of management, these proceedings will not have a material effect on the results of operations, financial position, liquidity or capital resources.
15.	Supplemental Information to Statements of Cash Flows

Supplemental disclosure of cash flow information:

	Three Months Ended
	March 31
(in thousands)	2009		2008
Cash paid during the period for:
Interest	$	68,246	$	97,756
Noncash Investing and Financing Activities:
Loans transferred to other real estate owned	$	134,945	$	18,591
Loan charge-offs		65,668		19,124

26

CORUS BANKSHARES, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BUSINESS SUMMARY

Corus Bankshares, Inc. (“Corus” or the “Company”), incorporated in Minnesota in 1958, is a bank holding company registered under the Bank Holding Company Act of 1956. Corus, through its wholly-owned banking subsidiary, Corus Bank, N.A. (the “Bank”), is primarily focused on commercial real estate lending and deposit gathering. The third, and smaller, business of the Bank is servicing the check cashing industry.

As a result of the deepening problems related to our loan portfolio and our current financial condition, Corus Bankshares, Inc. (“Corus” or the “Company”) announced in February 2009 that, at the request of the Federal Reserve Bank of Chicago (the “FRB”) and the Office of the Comptroller of the Currency (the “OCC”), the Company and its wholly-owned subsidiary, Corus Bank, N.A. (the “Bank”), respectively, have entered into a Written Agreement (the “Agreement”) with the FRB and a Consent Order (the “Order”) with the OCC. The Agreement and the Order (collectively, the “Regulatory Agreements”) contain a list of strict requirements ranging from a capital directive, which requires Corus and the Bank to achieve and maintain minimum regulatory capital levels (in the Bank’s case, in excess of the statutory minimums to be classified as well-capitalized), to developing a liquidity risk management and contingency funding plan. In addition, as of May 1, the Bank was notified by the OCC that it is undercapitalized under the OCC’s Prompt Corrective Action rules and, therefore, subject to a number of additional statutory and regulatory requirements, including submission of an acceptable capital restoration plan to the OCC.

Also as a result of our current financial condition, the Bank is subject to restrictions on the interest rates it may offer to its depositors. Under the applicable restrictions, the Bank cannot pay interest rates higher than 75 basis points above the national average rates for each deposit type. In light of the Bank’s historical practice of paying above average rates both locally and nationally, the Bank’s liquidity may be negatively impacted, possibly materially, due to deposit run-off to the extent that it is unable to continue offering above average rates.

While the Company intends to take such actions as may be necessary to enable Corus and the Bank to comply with the requirements of the Regulatory Agreements and withstand the potential impact of the interest rate restrictions, there can be no assurance that Corus or the Bank will be able to comply fully with the provisions of the Regulatory Agreements, or that compliance with the interest rate restrictions and the Regulatory Agreements, in particular the regulatory capital requirements, will not have material and adverse effects on the operations and financial condition of the Company and the Bank. Any material failure to comply with the provisions of the Regulatory Agreements could result in further enforcement actions by both the FRB and the OCC, or the placing of the Bank into conservatorship or receivership.

REGULATORY ACTIONS

Written Agreement

The Agreement with the FRB restricts the payment of dividends by the Company, as well as the taking of dividends or any other payment representing a reduction in capital from the Bank, without the prior approval of the FRB. The Agreement further requires that the Company shall not incur, increase, or guarantee any debt, repurchase or redeem any shares of its stock, or pay any interest or principal on subordinated debt or trust preferred securities, without the prior approval of the FRB. The Agreement also requires the Company to develop a capital plan by May 19, 2009, which shall address, among other things, the Company’s and the Bank’s current and future capital requirements, compliance with minimum capital ratios, the source and timing of additional funds necessary to meet future capital requirements, and procedures to notify the FRB within 30 days of each quarter-end if capital ratios fall below the required minimums. The Company is also required to submit cash flow projections for 2009, which were provided to the FRB on April 17, 2009. The Agreement also requires the Company to provide advance notice to the FRB in order to appoint any new director or senior executive officer, which the FRB may approve or disapprove. Finally, the Board of Directors of the Company (the “Board”) is required to submit written progress reports to the FRB within 30 days after the end of each calendar quarter.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Consent Order

The Order with the OCC requires the Bank, among other things,

• to establish a compliance committee to monitor and coordinate compliance with the Order;

• to achieve and maintain Tier 1 capital at least equal to 9% of adjusted total assets and at least equal to 12% of risk-weighted assets by June 18, 2009;

• to develop a three-year capital plan for the Bank by April 19, 2009, which includes, among other things, specific plans to for maintaining adequate capital, a discussion of the sources and timing of additional capital, as well as contingency plans for alternative sources of capital;

• to develop, prior to involvement in any new products or services, or the resumption of commercial real estate lending, a strategic plan covering at least a three-year period, which shall, among other things, include a specific description of the goals and objectives to be achieved, the targeted markets, the specific Bank personnel who are responsible and accountable for the plan, and the appointment of a Chief Credit Officer;

• to revise and maintain by March 20, 2009, a liquidity risk management program, which assesses, on an ongoing basis, the Bank’s current and projected funding needs, and ensures that sufficient funds exist to meet those needs. The program must include specific plans for how the Bank is complying with regulatory restrictions which limit the interest rates the Bank can offer to depositors;

• to revise by May 19, 2009, the Bank’s loan policy and commercial real estate concentration management program. The Bank also must establish a new loan review program to ensure the timely and independent identification of problem loans and modify its existing program for the maintenance of an adequate allowance for loan and lease losses;

• to take immediate and continuing action to protect the Bank’s interest in certain assets identified by the OCC or any other bank examiner by developing a criticized assets report covering the entire credit relationship with respect to such assets;

• to develop by May 19, 2009, an independent appraisal review and analysis process to ensure that appraisals conform to appraisal standards and regulations, and to order, within 30 days following any event that triggers an appraisal analysis, a current independent appraisal or updated appraisal on loans secured by certain properties; and

• to develop by March 20, 2009, a revised Other Real Estate Owned (“OREO”) program to ensure that the OREO properties are managed in accordance with applicable banking regulations.

To date, the Bank has taken several steps to comply with the terms of the Order, including:

• The Board established a Compliance Committee to monitor and coordinate the Bank’s compliance with the provisions of the Order. The Committee consists of two independent directors and one employee director.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

• The Bank delivered to the OCC a three-year capital plan on April 24, 2009, after requesting and receiving a one week extension on the original deadline. The Bank is in the process of working with the OCC and responding to feedback on its initial capital plan submission.

• The Board has submitted a Contingency Funding Plan to the OCC and is monitoring the Bank’s liquidity on a daily, weekly and monthly basis in accordance with the requirements of the Order.

• The initial set of Criticized Asset Reports (“CARs”) for both criticized loans and OREO have been completed as of March 31, 2009, and have been submitted to the Board and OCC for their review. Future CARs will be submitted to both the Bank Board and the OCC on a monthly basis.

• The Board has adopted an OREO Policy. In addition, reports on the status of OREO properties will be provided to the Board on at least a quarterly basis. The Bank is complying with this requirement through its monthly submission of the Criticized Asset and other OREO reports to the Board.

Prompt Corrective Action Notification

On May 1, 2009, based on its March 31, 2009, regulatory Report of Condition and Income (“Call Report”), the Bank received formal notification under the OCC’s Prompt Corrective Action (“PCA”) regime of its “undercapitalized” status. Accordingly, the Bank is subject to numerous mandatory statutory and regulatory requirements, including restrictions on capital distributions; a prohibition on the payment of “management fees” by the Bank to the Company or any other person having control of the Bank; restrictions on asset growth; and a prohibition against any new acquisitions, the establishment of new branch offices, or engaging in any new lines of business without prior approval from the OCC. Moreover, the OCC has discretionary authority to take additional actions with respect to the Bank as if the Bank were significantly undercapitalized, should the OCC make a determination that such additional actions are necessary to carry out the purposes of the PCA statute.

In addition, the Bank is required to submit a capital restoration plan deemed acceptable by the OCC no later than May 22, 2009, or such later time as the OCC may agree. The capital restoration plan must address, among other things, the steps the Bank will take to become adequately capitalized; the levels of capital to be attained during each year in which the plan will be in effect; how the Bank will comply with applicable restrictions and requirements associated with its undercapitalized status; and the types and levels of activities in which the Bank will engage. By statute, the OCC is not permitted to approve the Bank’s capital restoration plan unless the Company submits a written guarantee that the Bank will comply with the terms of the plan until the Bank has been adequately capitalized on average during each of four consecutive calendar quarters. As part of the guarantee, the Company is required to provide appropriate assurances of the Bank’s performance and must also provide assurances that the Company will fulfill any commitments to raise capital made in the capital restoration plan. Such a guarantee would have a priority over most of the other creditors of the holding company in bankruptcy, including the holders of the Company’s trust preferred securities and equity securities. The Company currently has approximately $3.1 billion in liquid assets and its principal obligations consist of approximately $414 million in trust preferred securities.

The Bank is developing a capital restoration plan but no assurances can be provided that it will be able to submit an acceptable plan, including the required Company guarantee. Failure of the Bank to submit an acceptable capital restoration plan would, among other things, result in the Bank becoming “significantly undercapitalized” under the OCC’s PCA rules, and therefore would become subject to additional regulatory restrictions. These restrictions include: requiring a recapitalization of the Bank through the sale of shares and obligations of the Bank, requiring that shares sold must be voting shares, or requiring the Bank to be acquired by another holding company or combined with another institution; imposing additional affiliate transaction restrictions; restricting interest rates the Bank may pay to “the prevailing rates” paid on like deposits in the region where the Bank is located; placing further restrictions on asset growth; placing further restrictions on the Bank’s activities, including the forced reduction or termination of any activity the OCC determines imposes excessive risk; requiring one or more of the following management changes: new election of directors, dismissal of directors or senior management officials, or hiring of senior executive officers; prohibiting the Bank from accepting deposits from correspondent institutions, including renewals and rollovers; prohibiting the Company from making any capital distribution without FRB approval; requiring divestiture of the Bank; or requiring the Bank to take “any other action” the OCC deems appropriate to further the purposes of PCA. In addition, as a significantly undercapitalized institution, the Bank would be prohibited from paying any bonus to a senior executive officer, or paying base compensation in excess of an officer’s prior 12-month average compensation without prior written approval from OCC. In addition to these remedial measures, the Bank and the Company also would be subject to other supervisory action including, among other things, the risk of additional supervisory or enforcement actions against the Company and/or the Board, or the placing of the Bank into conservatorship or receivership.

LIQUIDITY

The Bank must comply with federal restrictions on the interest rates the Bank may offer to its depositors. Under these restrictions, the Bank cannot pay interest rates higher than 75 basis points above the national average rates for each deposit type. This restriction is potentially significant to the Bank due to its historical practice of paying above average rates both locally and nationally.

As background, the Chicago banking market is extremely fragmented (over 140 banks and thrifts) and competitive. As Corus’ needs for additional funding grew over the years, the Bank explored several different deposit gathering strategies, including building new branches and acquiring brokered certificates of deposit. Corus concluded that building new branches was expensive and the success of this strategy uncertain. It was also a strategy that was already being pursued by numerous Chicago-area banks. Brokered deposits were not attractive since they were less likely to be available in a time of crisis. As an alternative, Corus decided that offering above average rates nationally, promoted via the internet, was the most efficient and cost effective strategy for the Bank. The strategy was scalable so deposits could be added or reduced based on the loan funding needs of the Bank and it was cost effective since the Bank wouldn’t be saddled with the overhead of a large branch network when loan volume declined.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

This strategy makes Corus particularly vulnerable to a restriction on the level of interest rates it offers. Management believes Corus’ ability to attract deposits is a function of its ability to continue to offer rates above the national average. To the extent that Corus is restricted from offering high deposit interest rates, liquidity may be negatively impacted, possibly materially.

The current FDIC rules on interest rate restrictions establish that the Bank may not offer interest rates higher than 75 basis points above the rates of interest on deposits offered in the Bank’s normal market area. Corus submitted a plan to the FDIC that presented the Bank’s normal market area as the national market. The FDIC approved our national market designation and our use of the Bankrate.com average national rate table to determine the base rate. Corus began to offer deposit products using these rate limitations on January 24, 2009. From January 24, 2009, through March 31, 2009, Corus experienced deposit run-off of $323 million. However, it should be noted that part of the Bank’s strategy, as noted above, involved shrinking deposits as loan demand declined. For example, our unfunded loan commitments shrank by $322 million during the same period.

On January 27, 2009, a new rule was proposed by the FDIC that would amend its existing rules which impose interest rate restrictions on deposits that can be paid by depository institutions that are not “well-capitalized.” Under this new rule, affected depository institutions would be allowed to pay a “national rate” plus 75 basis points, and the FDIC would set and publish the national rate. To compute the national rate, the FDIC would use all the data that was available from approximately 8,300 banks and thrifts (and their branches) to determine a national average rate for each deposit product. Banks that are not well-capitalized would then be limited to paying 75 basis points over the national average rates set by the FDIC for each deposit product.

We do not know whether there will be changes to the proposed rule or whether it will be adopted at all, or what impact the final rule will have on Corus. However, the Bank has historically paid above average rates locally and nationally, and as a result, the restrictions on interest rates could cause a decrease in both new and existing deposits, which would adversely impact our business, financial condition, and results of operations.

GOING CONCERN

Corus is suffering from the extraordinary effects of what may ultimately be the worst economic downturn since the Great Depression. The effects of the current environment are being felt across many industries, with financial services and residential real estate being particularly hard hit. The effects of the downturn have been particularly severe during the last 180 days of 2008, and have continued into 2009. Corus, with a portfolio consisting primarily of condominium construction loans, many in the hard hit areas of Arizona, Nevada, south Florida and southern California, has seen a rapid and precipitous decline in the value of the collateral securing our loan portfolio. Thus, we are experiencing significant loan quality issues. The net loss of $285.0 million recorded by the Company in the first quarter of 2009 was primarily the result of significant increases in the provision for credit losses. The impact of the current financial crisis in the U.S. and abroad is having far-reaching consequences and it is difficult to say at this point when the economy will begin to recover. As a result, we cannot assure you that we will be able to resume profitable operations in the near future, or at all.

We have determined that significant additional sources of capital will be required for us to continue operations through 2009 and beyond. The Company’s Board of Directors has formed a Strategic Planning Committee. The Committee has hired an investment banking firm to seek all strategic alternatives to enhance the stability of the Company including a capital investment, sale, strategic merger or some form of restructuring. There can be no assurance that the Company will succeed in this endeavor and be able to comply with the new regulatory requirements. In addition, a transaction, which would likely involve equity financing, would result in substantial dilution to our current stockholders and could adversely affect the price of our common stock. If the Company does not comply with the new capital requirements contained in the Order, the regulators may take additional enforcement action against the holding company and the Bank.

30

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

It remains to be seen if those efforts will be successful, either on a short-term or long-term basis. In addition, it is unclear at this point what impact, if any, the interest rate restrictions included in the Order will have on Corus’ continued ability to maintain adequate liquidity. As a result of our financial condition, our regulators are continually monitoring our liquidity and capital adequacy. Based on their assessment of our ability to continue to operate in a safe and sound manner, our regulators at any time may take other and further actions, including placing the Bank into conservatorship or receivership, to protect the interests of depositors insured by the Federal Deposit Insurance Corporation.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future, and do not include any adjustments to reflect the possible future effects on the recoverability or classification of assets, and the amounts or classification of liabilities that may result from the outcome of any regulatory action, which would affect our ability to continue as a going concern.

PERSONNEL

On April 24, 2009, Robert J. Glickman resigned as President and Chief Executive Officer and Director of the Company and of the Bank, for personal reasons effective April 24, 2009. Joseph C. Glickman also resigned as Director and Chairman of the Board of the Company for personal reasons effective April 24, 2009. Neither resignation was the result of a disagreement with the Company, the Bank or other members of the Board of Directors of either the Company or the Bank. Robert J. Glickman is a vested participant in the Company’s pension plan and will be eligible to begin receiving payments. Joseph C. Glickman is a party to a deferred compensation agreement with the Company that provides him with deferred compensation for the remainder of his life with an annual benefit of $59,000, paid on a semi-monthly basis via the Company’s regular payroll. Other than as discussed above, neither will receive any severance payments or benefits.

Randy P. Curtis, currently Executive Vice President of the Company and Executive Vice President — Retail Banking of the Bank, will serve as interim President and Chief Executive Officer, subject to approval of the appropriate regulatory authorities, while the Board of Directors seeks a permanent successor. Mr. Curtis, age 50, was Senior Vice President-Retail Banking of the Bank from 1997 through 2005 and has been in his current position since 2005.

As a result, of the resignations, the number of directors of the Company was reduced from seven to five.

On May 11, 2009, Richard J. Koretz gave notice of his resignation as Executive Vice President and Chief Operating Officer of the Company, effective June 5, 2009, to pursue other opportunities. The Company does not currently intend to appoint a new Chief Operating Officer. On May 12, 2009, the Company announced the promotion of John Barkidjija to Executive Vice President Commercial Real Estate and Chief Credit Risk Officer.

RESULTS OF OPERATIONS

Corus reported a net loss of $285.0 million in the first quarter of 2009, compared with net income of $4.5 million in the same period of 2008. This translates to a diluted loss per share of $5.31 for the three months ended March 31, 2009, compared to diluted earnings per share of $0.08 for the three months ended March 31, 2008.

31

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Problem loans continue to grow as a result of the continuing nationwide downturn in the residential real estate market. Due to continued concerns about loan quality, Corus recorded a provision for credit losses of $193.3 million for the first three months of 2009, compared with $36.8 million during the same period of 2008. Further contributing to the Company’s net loss was the increase in the Company’s nonperforming assets to $2.5 billion (including $0.5 billion of other real estate owned), which led to a steep decline in the Company’s interest income. The Company’s interest income was not enough to offset its interest expense during the first quarter of 2009.

The Company has also experienced increases in noninterest expense. Noninterest expense increased primarily due to costs associated with the Company’s foreclosed real estate, including impairment charges of nearly $45 million. Additionally, the Company has experienced significant increases in its expenses associated with regulatory compliance and audits, FDIC insurance, as well as legal and consulting fees. These expenses will continue as a direct result of the Company’s ongoing troubled condition.

NET INTEREST LOSS / INCOME AND NET INTEREST MARGIN

Net interest loss/income, which is the difference between income on earning assets (interest, points and fees, and dividends) and interest expense on deposits and borrowings, has historically been the major source of earnings for Corus. The related net interest margin (the “NIM”) represents net interest loss/income as a percentage of the average earning assets during the period.

For the three months ended March 31, 2009, Corus reported net interest loss of $6.4 million and a NIM of (0.34)%. These results represent significant declines from the same period in 2008 when Corus reported net interest income of $46.9 million and a NIM of 2.14%.

The primary driver behind the net interest loss and decline in Corus’ NIM continues to be the significant growth in nonperforming assets, as a result of the continued deteriorating conditions in the housing market. Nonperforming assets consist of nonperforming loans (i.e. nonaccrual, past due 90 days or more, and troubled debt restructurings) and other real estate owned. While, under certain limited circumstances, Corus recognizes income on nonaccrual loans, in general this pool of assets earns essentially no income, which has a dramatic downward impact on the NIM. During the first quarter of 2009, nonperforming assets averaged $2.5 billion compared to $426 million for the first quarter of 2008.

The Company saw a decrease on rates paid on interest-bearing deposits, consistent with the FDIC rate restrictions discussed in detail in Note 1 to the consolidated financial statements. However, the cost of deposits did not decline at nearly the rate that the yield on loans and investments did.

Finally, a decrease in loan points and fee income also contributed to the net interest loss. Loan points and fee income for the three months ended March 31, 2009 and 2008 totaled $5.2 million and $14.9 million, respectively.

32

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Nonaccrual Loans

The accrual of interest income is discontinued on any loan for which payment in full of principal or interest is not expected. In addition, a loan will be placed in nonaccrual status if the loan is past due for a period of 90 days or more unless the loan is both well-secured and in the process of collection. For a loan to be “in process of collection,” the timing and amount of repayment must be reasonably certain. While interest is not being accrued for accounting purposes, the interest is still owed by the borrower.

When a loan is placed on nonaccrual status, previously accrued but uncollected interest is generally reversed against interest income. One exception relates to interest which has been capitalized into the loan principal balance through an interest reserve. Interest capitalized into the loan balance via interest reserve prior to the nonaccrual date is not reversed. This capitalized interest is considered part of the loan’s principal and, to the extent necessary, reserved for through the Allowance for Loan Losses. See further detail on the negative impact of nonaccrual loans on Corus’ interest income within Note 5 to the consolidated financial statements.

Interest payments received on nonaccrual loans are either applied against principal or reported as interest income, according to management’s judgment as to the collectibility of principal, which may change as conditions dictate. Loans may be returned to accrual status when collectibility of the total contractual principal and interest is expected and (1) the obligation is brought current, (2) the borrower has performed in accordance with contractual terms of the loan for a reasonable period of time, or (3) significant new equity is contributed from a source independent of the Bank.

33

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Average Balance Sheets and Net Interest Margin

	Three Months Ended March 31
	2009									2008
				Interest,									Interest,
	Average			Points & Fees,			Yield/			Average			Points & Fees,		Yield/
(in thousands)	Balance			and Dividends			Cost			Balance			and Dividends		Cost
Assets
Earning Assets:
Liquidity management assets (1)	$	3,456,394		$	20,343			2.39	%	$	4,304,224		$	43,151		4.03	%
Loans, net of unearned income		2,106,050			39,047			7.52	%		4,195,461			100,564		9.64	%
Nonaccrual loans		2,052,725			408			0.08	%		385,186			413		0.43	%
Total earning assets		7,615,169			59,798			3.18	%		8,884,871			144,128		6.52	%
Noninterest-earning assets:
Cash and due from banks — noninterest-bearing		81,304									104,237
Allowance for loan losses		(270,202	)								(71,165	)
Other real estate owned		489,437									41,169
Premises and equipment, net		33,290									27,336
Other assets		245,717									88,169
Total Assets	$	8,194,715								$	9,074,617
Liabilities and Shareholders’ Equity
Deposits — interest-bearing:
Retail certificates of deposit	$	5,109,560		$	50,046			3.97	%	$	5,429,771		$	68,796		5.10	%
Money market deposits		1,699,714			10,811			2.58	%		1,522,522			16,181		4.27	%
NOW deposits		181,819			500			1.12	%		251,653			1,432		2.29	%
Brokered certificates of deposit		104,009			534			2.08	%		198,000			2,325		4.72	%
Savings deposits		110,309			132			0.49	%		122,026			152		0.50	%
Total interest-bearing deposits		7,205,411			62,023			3.49	%		7,523,972			88,886		4.75	%
Subordinated debentures relating to Trust Preferred Securities		410,736			4,149			4.10	%		404,647			7,067		7.02	%
Other borrowings (2)		292			—			0.00	%		49,673			801		6.49	%
Total interest-bearing liabilities		7,616,439			66,172			3.52	%		7,978,292			96,754		4.88	%
Noninterest-bearing liabilities and shareholders’ equity:
Noninterest-bearing deposits		216,284									241,647
Other liabilities		92,845									52,310
Shareholders’ equity		269,147									802,368
Total Liabilities and Shareholders’ Equity	$	8,194,715								$	9,074,617
Earning assets	$	7,615,169		$	59,798			3.18	%	$	8,884,871		$	144,128		6.52	%
Interest-bearing liabilities	$	7,616,439			66,172			3.52	%	$	7,978,292			96,754		4.88	%
Net interest spread				$	(6,374	)		(0.34	)%				$	47,374		1.64	%
Net interest margin								(0.34	)%							2.14	%

Tax equivalent adjustments are based on a federal income tax rate of 35%.
(1)	Liquidity management assets primarily include time deposits with banks, U.S. Government agency securities, FDIC insured bank notes, equity securities, and federal funds sold. Dividends on the equity securities portfolio include a tax equivalent adjustment of $7,000 for 2009 and $445,000 for 2008, respectively.
(2)	Other borrowings may include federal funds purchased.

34

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

NONINTEREST INCOME

For the three months ended March 31, 2009, Corus reported $3.2 million of total noninterest income compared to $14.4 million during the three months ended March 31, 2008. The fluctuations from period to period are primarily the result of securities gains and losses as detailed below. Excluding securities gains, noninterest income decreased in 2009 by $0.5 million, or 13.2%, as compared to the same period of 2008.

	Three Months Ended
	March 31
(in thousands)	2009		2008
Securities gains/(losses), net	$	273	$	10,978
Service charges on deposit accounts		2,112		2,486
Other income		864		944
Total Noninterest Income	$	3,249	$	14,408
Noninterest Income, Excluding Securities gains/(losses), net	$	2,976	$	3,430

NONINTEREST EXPENSE

For the three months ended March 31, 2009, noninterest expense increased by $68.9 million, or 358%, as compared to the three months ended March 31, 2008. The significant fluctuation was primarily due to the increase in net Other Real Estate Owned (“OREO”) expense, as well as the expenses incurred in association with pending foreclosure (“protective advances”). Various other factors also contributed to the year over year fluctuations, but to a lesser extent.

In connection with management’s review of the valuation of the OREO portfolio that it performs at least on a quarterly basis, the Company recorded an impairment charge of $44.7 million relating to six of its OREO properties.

The Company incurred OREO operating expenses of $12.4 million during the first three months of 2009, which was an increase of $11.4 million compared to the same period in 2008. Further, the Company acquired six new properties during the first quarter of 2009 and incurred protective advance expenses of $10.7 million on certain pending foreclosures. The various expenses associated with maintaining these properties include real estate taxes, construction expenses, repairs and maintenance, utilities, insurance, and other property related expenses. Partially offsetting the OREO expense is operating income totaling $2.3 million and $0.7 million for the three months ended March 31, 2009 and 2008, respectively. The income relates to rental income earned from various properties owned. (See the “OREO” section for additional details.)

Also contributing to the increase in noninterest expense during the three months ended March 31, 2009, was an increase in deposit insurance of $4.4 million as compared to the same period in 2008. The increase was primarily the result of the FDIC’s approval to rebuild the deposit insurance fund. Premiums also increased because of the troubled condition of the Company. Please read Note 1 to the Company’s consolidated financial statements, titled “Regulatory Actions, Liquidity, and Going Concern Considerations,” for a detailed discussion regarding the Company’s troubled condition.

Additionally, as a direct result of the Company’s troubled condition, other expenses increased period over period. The increase was primarily due to legal expenses associated with various legal matters and/or reviews, including pending lawsuits and foreclosure proceedings. The Company has also seen an increase in OCC examination fees.

35

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

INCOME TAXES

Income tax expense was $0.4 million during the first three months of 2009, compared to income tax expense of $0.8 million during the first quarter of 2008. The effective tax rate decreased to (0.1)% in 2009, compared to 14.7% in 2008. This decrease is due primarily to the deferred tax asset valuation allowance recorded during the three months ended March 31, 2009 of $104.6 million. The adjustment was recorded in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). Under SFAS 109, management is required to reduce the carrying amounts of deferred tax assets if, based on the available evidence, it is not “more likely than not” that such assets will be realized. Management periodically assesses the need to establish, increase, or decrease a valuation allowance for deferred tax assets. Appropriate consideration is given to all available evidence (both positive and negative) related to the realization of the deferred tax assets. Evidence considered includes the nature and amount of taxable income and expense items, the availability of statutory carryback and carryforward periods, forecasts of future profitability and tax-planning strategies that may be implemented to increase the likelihood that deferred tax assets will be realized. If, after this periodic assessment, management determines that the realization of the deferred tax assets does not meet the “more likely than not” criteria, a valuation allowance is recorded, thereby reducing the deferred tax assets.

Corus’ net deferred tax asset was $11.3 million, after the impact of the valuation allowance, at March 31, 2009, and is supported entirely by a carryback against 2007 taxable income.

FINANCIAL CONDITION

LOAN PORTFOLIO

Overview

As discussed in the “Business Summary” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations, Corus is currently operating under restrictions stipulated by the Regulatory Agreements. Many of the restrictions impact Corus’ activities with respect to its loan portfolio. Where applicable, the impact of the Regulatory Agreements is incorporated into the following discussion.

Corus’ loan portfolio consists primarily of loans secured by condominium construction projects. We also have a small portfolio of loans secured by condominium conversion projects (converting apartment projects to condominiums, as distinct from new construction). Finally, we have a portfolio of loans secured by office buildings, apartment buildings, and hotels. The tables below break down the portfolio both by total commitment and funded balance.

Corus’ commercial real estate loans are collateralized by the underlying property and are almost always variable rate, with the vast majority tied to the 3-month London Inter-Bank Offered Rate (“LIBOR”), resetting quarterly. While Corus generally provides only senior debt, in some cases Corus provided mezzanine financing as well. Corus’ mezzanine loans are all subordinate to a Corus first mortgage loan. Interest rates charged for mezzanine loans are meaningfully higher than those charged for first mortgage loans (and tend to be fixed rate), but the loans also carry additional risk.

36

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

As of March 31, 2009, all 103 projects where Corus provided financing (with total commitments of $1 million or more) had an equity investor involved in the project. Of these 103 loans, 49 also involved a third-party mezzanine lender as part of the deal, which is 48% of the outstanding loans.

Construction loans typically have stated maturities ranging from two to four years (and are anticipated to fund over two to three years). The loans are funded throughout the term as construction progresses. Construction loans have interest reserves at inception. An interest reserve allows a borrower’s interest cost to be capitalized into the loan balance over the life of the loan. It has been Corus’ practice to limit the size of interest reserves such that borrowers will be required to make out-of-pocket interest payments to support slow-to-sell or slow-to-construct projects. Of course, there are exceptions where our interest reserves do carry loans past the anticipated completion of construction, but generally speaking, our interest reserves will not carry borrowers much past completion of construction. We historically tried to limit increases in interest reserves to situations where our loan balance was very well secured and such increases represented an opportunity for additional income. While we are currently prohibited from increasing interest reserves for any loans, as an inducement to borrowers to sell units, we will often allow a small percentage of closing proceeds to be used to pay interest and other project costs.

Originations

Corus did not originate any new commercial real estate loans in the first quarter of 2009. Furthermore, effective February 18, 2009, under the terms of the Consent Order, prior to resuming commercial real estate loan originations or engaging in any new products or services, the Company must develop a new strategic plan consistent with OCC expectations.

During 2009, the Company began to offer, on a limited basis, residential loans to potential buyers who were interested in purchasing condominium units for properties that are either owned by Corus or are secured by Corus loans. As of May 7, 2009, the Company has closed on 14 loans and has an additional ten loans pending approval. While the Company does not expect that residential loans will become a material part of its business, the Company hopes that offering these loans will provide some, albeit limited, support for its commercial real estate portfolio.

37

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Including unfunded commitments of $1.3 billion, the portfolio totals $5.4 billion as of March 31, 2009, as detailed below:

	Total Loan Commitments
	(funded balance + unfunded commitments)
	March 31		December 31		March 31
(in millions)	2009		2008		2008
Commercial real estate:
Condominium:
Construction	$	3,756	$	4,041	$	6,352
Conversion		114		175		523
Inventory		49		49		72
Total condominium		3,919		4,265		6,947
Other commercial real estate:
Office		654		659		656
Rental apartment		600		603		115
Hotel		172		172		205
Other		22		23		24
Loans less than $1 million		5		7		9
Total commercial real estate		5,372		5,729		7,956
Commercial		48		52		49
Residential real estate and other		14		15		20
Loans, net of unearned income	$	5,434	$	5,796	$	8,025
Mezzanine loans included in total commercial real estate (1)	$	38	$	48	$	135

⁽¹⁾ These loans are all subordinate to Corus first mortgage loans.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Commercial Real Estate Commitment Rollforward

The table below presents a rollforward of the total commitment of the Company’s commercial real estate loans for the first quarter of 2009:

	Three Months Ended
(in millions)	March 31, 2009
Beginning Total Commitment	$	5,729
Originations (1)		—
Paydowns/Payoffs		(141	)
Loan charge-offs		(66	)
Transfers to OREO		(140	)
Other		(10	)
Ending Total Commitment	$	5,372

⁽¹⁾ Originations include commitment increases to existing loans.

Reclassifications

We have seen condominium loans where the borrowers have decided that the current market values their project higher as an apartment than as a condominium. As such, they have revised their plans and are focusing their efforts on managing their properties as apartments. In one instance during the first quarter 2009, the borrower stopped managing the project as an apartment and began marketing the project as a condominium. Consistent with the changes in the borrowers’ plans, Corus reclassified the loans for disclosure purposes.

The table below presents the various reclassifications (in total commitment):

	Three Months Ended
(in millions)	March 31, 2009
Reclassification From:
Condominium	$	(54	)
Rental apartment		(47	)
Total Reclassification From		(101	)
Reclassification To:
Rental apartment		54
Condominium		47
Total Reclassification To	$	101

39

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

The following table details the composition of Corus’ outstanding loans:

	Funded Loan Balances
	March 31		December 31		March 31
(in millions)	2009		2008		2008
Commercial real estate:
Condominium:
Construction	$	2,930	$	2,884	$	3,549
Conversion		114		172		509
Inventory		49		49		70
Total condominium		3,093		3,105		4,128
Other commercial real estate:
Rental apartment		527		478		66
Office		391		348		236
Hotel		73		42		40
Other		22		22		24
Loans less than $1 million		4		5		7
Total commercial real estate		4,110		4,000		4,501
Commercial		37		40		39
Residential real estate and other		13		13		17
Loans, net of unearned income	$	4,160	$	4,053	$	4,557
Mezzanine loans included in total commercial real estate (1)	$	36	$	44	$	124

⁽¹⁾ These loans are all subordinate to Corus first mortgage loans.

40

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

The following tables provide a breakdown of Corus’ commercial real estate loan portfolio by size and geographic distribution:

Commercial Real Estate Loan Portfolio By Size

	Total Commitment as of March 31, 2009 (1)
	Total									Other
	Condominium					Office				CRE					Total
(dollars in millions)	#			Amount		#		Amount		#			Amount		#		Amount
$180 million and above		2	(2)	$	275		—	$	—		—	(2)	$	90		2	$	365
$140 million to $180 million		4	(2)		578		1		144		—	(2)		82		5		804
$100 million to $140 million		12	(2)		1,390		2		218		—	(2)		44		14		1,652
$60 million to $100 million		6			483		3		239		3			210		12		932
$20 million to $60 million		23			916		1		53		9			315		33		1,284
$1 million to $20 million		29			277		—		—		8			53		37		330
Loans less than $1 million		—			—		—		—	NM				5	NM			5
Total		76		$	3,919		7	$	654		20		$	799		103	$	5,372

NM — Not Meaningful.
(1)	Includes both funded and unfunded commitments and letters of credit.
(2)	As of March 31, 2009, Corus had three loans secured by properties best described as “mixed use.” The underlying collateral included a condominium component combined with either a hotel or apartments. For presentation purposes, the commitment amount has been split between the appropriate categories. However, with respect to the “#” of loans, the loans have been included with condominium loans.

41

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Commercial Real Estate Loan Portfolio By Major Metropolitan Area

	Total Commitment as of March 31, 2009 (1)
	Total									Other
	Condominium					Office				CRE					Total
(dollars in millions)	#			Amount		#		Amount		#			Amount		#		Amount
Florida:
Miami/Southeast Florida		14		$	997		—	$	—		2		$	35		16	$	1,032
Tampa		3			66		—		—		1			73		4		139
Other Florida		2			27		—		—		3			74		5		101
Florida Total		19			1,090		—		—		6			182		25		1,272
California:
Los Angeles		9	(4)		614		1		85		5	(4)		157		15		856
San Diego		3			58		—		—		2			99		5		157
San Francisco		1	(4)		72		—		—		—	(4)		44		1		116
California Total		13			744		1		85		7			300		21		1,129
Washington, D.C.(2)		5			130		6		569		—			—		11		699
Atlanta		8			432		—		—		2			65		10		497
Chicago		4			231		—		—		3			75		7		306
New York City		7			292		—		—		—			—		7		292
Las Vegas		4			168		—		—		1			25		5		193
Austin		2	(4)		99		—		—		—	(4)		82		2		181
Hawaii		1			168		—		—		—			—		1		168
Other (3)		13			565		—		—		1			65		14		630
Loans less than $1 million		—			—		—		—	NM				5	NM			5
Total		76		$	3,919		7	$	654		20		$	799		103	$	5,372

NM — Not Meaningful.
(1)	Includes both funded and unfunded commitments and letters of credit.
(2)	Includes northern Virginia and Maryland loans.
(3)	Includes 11 metropolitan areas, none of which exceeds three percent of the total.
(4)	As of March 31, 2009, Corus had three loans secured by properties best described as “mixed use.” The underlying collateral included a condominium component combined with either a hotel or apartments. For presentation purposes, the commitment amount has been split between the appropriate categories however with respect to the “#” of loans, the loans have been included with condominium loans.

Other CRE includes $600 million in rental apartment commitments, two hotel loans ($90 million commitment in Los Angeles and $82 million commitment in Austin), and five other smaller loans.

As noted in the above table, the total commitments of mixed use properties are, for illustrative purposes only, allocated by the underlying collateral type. It should be further noted that management views each loan as individual loans, despite the fact that there is more than one collateral type. This enables management to assess the overall performance of the loan.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

The following table provides the remaining number of condominium units available for sale by geographic location and by completion status in buildings collateralizing Corus’ condominium loans:

Remaining Condominium Units By Major Metropolitan Area

	As of March 31, 2009
					Expected Completion Timeframe
	Total		Completed		0-6 Months		6-12 Months		> 12 Months
	#		#		#		#		#
Florida:
Miami/Southeast Florida		2,905		1,613		1,292		—		—
Tampa		876		876		—		—		—
Other Florida		193		193		—		—		—
Florida Total		3,974		2,682		1,292		—		—
California:
Los Angeles		1,161		478		335		348		—
San Diego		212		212		—		—		—
San Francisco		187		—		—		—		187
California Total		1,560		690		335		348		187
Washington, D.C.(1)		439		155		284		—		—
Atlanta		1,334		321		1,013		—		—
Chicago		687		154		332		201		—
New York City		496		249		57		83		107
Las Vegas		959		959		—		—		—
Austin		458		260		—		—		198
Hawaii		291		—		—		291		—
Other		1,945		1,120		124		588		113
Total		12,143		6,590		3,437		1,511		605

⁽¹⁾ Includes northern Virginia and Maryland loans.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

The table below provides details regarding the unit presales and closings in condominium buildings collateralizing Corus’ completed condominium loans:

	Unit Sales Associated Completed Projects
			Units
	# of		Total				Remaining at March 31, 2009
	Loans		Project		Closed		Presold (1)		Not Presold
Florida:
Miami/Southeast Florida		10		2,350		737		819		794
Tampa		3		1,554		678		—		876
Other Flordia		2		444		251		8		185
Florida Total		15		4,348		1,666		827		1,855
California:
Los Angeles		4		569		91		85		393
San Diego		3		417		205		—		212
San Francisco		—		—		—		—		—
California Total		7		986		296		85		605
Washington D.C. (2)		3		377		222		10		145
Atlanta		5		709		388		16		305
Chicago		2		452		298		58		96
New York City		3		516		267		147		102
Las Vegas		4		1,437		478		335		624
Austin		1		348		88		5		255
Hawaii		—		—		—		—		—
Other		9		1,989		869		207		913
Total		49		11,162		4,572		1,690		4,900

(1)	Represents number of units that are under contract to be sold.
(2)	Includes northern Virginia and Maryland loans.

In certain markets, it is very common for buyers to sign contracts committing them to the purchase of a condominium unit well in advance of project completion. These advance purchases are referred to as presales and typically include a deposit from the buyer. Once construction of the building is complete, buyers can then close on their units. If buyers do not close on their purchase, they typically lose their deposit. Under certain conditions, such as delays in delivery of units, the buyer can sometimes get out of a presale contract.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

The table below provides details regarding the unit presales and closings in condominium buildings under construction collateralizing Corus’ condominium loans:

	Unit Sales Associated with Projects Under Construction
			Units
	# of		Total				Remaining at March 31, 2009
	Loans		Project		Closed		Presold (1)		Not Presold
Florida:
Miami/Southeast Florida		4		1,334		42		1,029		263
Tampa		—		—		—		—		—
Other Flordia		—		—		—		—		—
Florida Total		4		1,334		42		1,029		263
California:
Los Angeles		5		683		—		120		563
San Diego		—		—		—		—		—
San Francisco		1		187		—		—		187
California Total		6		870		—		120		750
Washington D.C. (2)		2		284		—		50		234
Atlanta		3		1,045		32		135		878
Chicago		2		534		1		234		299
New York City		4		247		—		20		227
Las Vegas		—		—		—		—		—
Austin		1		198		—		85		113
Hawaii		1		291		—		57		234
Other		4		825		—		64		761
Total		27		5,628		75		1,794		3,759

(1)	Represents number of units that are under contract to be sold.
(2)	Includes northern Virginia and Maryland loans.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Cost overruns

Given the nature of Corus’ lending, cost overruns is an issue in many projects. We routinely get completion guarantees from individuals and entities, and those guarantors have covered much of the overruns. When guarantors cannot do so, we have seen mezzanine lenders cover some of the cost overruns. On some occasions, though, Corus has absorbed some or all of the cost overruns in the form of higher loan exposure. Corus’ position is that construction must be completed if possible, since it is generally better to have a larger loan on a completed building than a smaller loan on a partially built structure.

The table below presents a summary of cost overruns associated with construction loans still outstanding at March 31, 2009:

(dollars in millions)	Cost Overruns
Source	Amount			Percentage
Equity/Guarantors	$	146			39	%
Mezzanine Lenders		84			23	%
Corus		65			17	%
Other		28			8	%
Unidentified		49			13	%
Total	$	372			100	%
Total commitment of construction loans	$	4,882
Overruns as a % of total commitment		7.62	%

The Other category consists primarily of funds provided from portions of earnest money deposits relating to sales of individual condominium units which occurred after the loan was closed. The Unidentified category consists primarily of overruns where it was not yet determined who would cover the cost.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

ASSET QUALITY

Asset Quality Measures

	March 31			December 31			March 31
(dollars in thousands)	2009			2008			2008
Total Nonperforming Loans (NPLs)	$	2,035,856		$	2,036,503		$	547,517
Other Real Estate Owned (OREO)	$	499,076		$	408,987		$	53,174
Total Nonperforming Assets (NPLs + OREO)	$	2,534,932		$	2,445,490		$	600,691
NPLs / Total Loans		48.94	%		50.25	%		12.02	%
Potential Problem Loans	$	1,333,157		$	1,106,720		$	589,665
Allowance for Loan Losses	$	338,622		$	269,357		$	87,477
Allowance for Loan Losses / Total Loans		8.14	%		6.65	%		1.92	%
Liability for Credit Commitment Losses	$	94,116		$	35,550		$	7,350

Nonperforming Assets

	March 31		December 31		March 31
(in thousands)	2009		2008		2008
Nonaccrual
Condominium:
Construction	$	1,593,982	$	1,648,712	$	232,216
Conversion		104,341		136,298		156,081
Inventory		44,046		44,046		—
Total condominium		1,742,369		1,829,056		388,297
Other commercial real estate:
Rental apartment		202,434		156,831		31,222
Office		45,503		39,354		—
Other		6,000		—		—
Total commercial real estate		1,996,306		2,025,241		419,519
Commercial		869		846		28
Residential real estate and other		—		—		—
Total nonaccrual		1,997,175		2,026,087		419,547
Loans 90 days or more past due		3,295		1,707		2,994
Troubled debt restructurings (1)		35,386		8,709		124,976
Total Nonperforming Loans		2,035,856		2,036,503		547,517
Other real estate owned (“OREO”)		499,076		408,987		53,174
Total Nonperforming Assets	$	2,534,932	$	2,445,490	$	600,691

⁽¹⁾ To the extent not included in either nonaccrual or loans 90 days or more past due.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Asset Quality Overview

Problem loans continue to grow as a result of the continuing nationwide downturn in the residential real estate market. Looking at our largest markets (Miami, Los Angeles, Atlanta, Las Vegas, New York City, Washington D.C., Chicago, San Diego, and Phoenix), we find that sales of condominiums have dropped dramatically. Specifically, looking at the most recent market data obtained by the Company, year over year declines in condominium units sold were as high as 40% in some of our markets.

The precipitous deterioration of market conditions during 2008, which has continued into 2009, is reflected in Corus’ portfolio of condominium secured projects, with increases in nonperforming loans, as well as elevated charge-offs and loan loss provisions, and a growing portfolio of OREO. We expect that the residential real estate market will remain weak throughout the remainder of 2009 and perhaps into 2010. We believe that once consumers can again expect modest annual increases in value, they should be far more interested in buying homes than they are today. However, we cannot predict when conditions will improve.

Previously, in many of our problem loan situations, either the borrower or a mezzanine lender subordinate to Corus supported the project/loan with substantial amounts of additional cash. However, more recently, these additional funds have generally not been forthcoming from either the borrower or the mezzanine lender. In many cases, the borrowers and mezzanine lenders are experiencing financial difficulties and have been unable to support projects. For those problem loans where the borrower or mezzanine lender chooses not to, or is unable to, take the necessary steps to resolve issues, we will not hesitate to foreclose.

Nonperforming Assets

Nonperforming assets include loans which are nonaccrual, loans 90 days or more past due, troubled debt restructurings and other real estate owned. The sections below provide details of the Company’s significant nonperforming assets, which are listed in the table on the previous page.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Nonaccrual Commercial Real Estate Loans

Corus’ general practice is that when a loan deteriorates such that collection of all principal and interest is no longer expected, the loan will be placed on nonaccrual. In addition, a loan will be placed in nonaccrual status if the loan is past due for a period of 90 days or more, unless the loan is both well-secured and in the process of collection. For a loan to be “in process of collection,” the timing and amount of repayment must be reasonably certain.

As of March 31, 2009, balances outstanding on nonaccrual loans totaled $2.0 billion, which were almost exclusively commercial real estate loans. Balances of the nonaccrual commercial real estate loans at March 31, 2009 are listed below by major metropolitan area:

	Nonaccrual Commercial Real Estate Loans as of March 31, 2009
	Condominium						Other CRE						Total
			Funded		Total				Funded		Total				Funded		Total
(dollars in millions)	#		Balance		Commitment		#		Balance		Commitment		#		Balance		Commitment
Florida:
Miami		12	$	873	$	921		2	$	34	$	34		14	$	907	$	955
Tampa		3		66		66		—		—		—		3		66		66
Other Florida		2		26		26		1		29		29		3		55		55
Florida Total		17		965		1,013		3		63		63		20		1,028		1,076
San Diego		3		59		59		1		44		44		4		103		103
Los Angeles		—		—		—		2		19		19		2		19		19
California Total		3		59		59		3		63		63		6		122		122
Atlanta		4		299		382		2		59		65		6		358		447
Las Vegas		3		150		157		1		23		25		4		173		182
Phoenix/Scottsdale		2		82		85		—		—		—		2		82		85
Chicago		1		61		82		—		—		—		1		61		82
Washington D.C.		1		25		28		1		46		82		2		71		110
New York City		2		16		16		—		—		—		2		16		16
Austin		1		16		17		—		—		—		1		16		17
Other		2		69		69		—		—		—		2		69		69
Total		36	$	1,742	$	1,908		10	$	254	$	298		46	$	1,996	$	2,206

The amounts in the table above for the nonaccrual commercial real estate loans are presented net of $344 million in cumulative charge-offs. In addition, the allowance for loan losses as of March 31, 2009 includes associated specific reserves of $137 million.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

The table below presents a rollforward of the balance of nonaccrual commercial real estate loans for the three months ended March 31, 2009:

	Three Months Ended
	March 31, 2009
				Funded			Total
(dollars in millions)	#			Balance			Commitment
Beginning Balance		48		$	2,025		$	2,361
Additions		4			102			109
Subtractions:
Loan charge-offs	NA				(66	)		(66	)
Transferred to OREO		(6	)		(135	)		(140	)
Balance changes	NA				70			(58	)
Balance at March 31, 2009		46		$	1,996		$	2,206

NA — Not applicable.

Subsequent to March 31, 2009, the Company has foreclosed or is in the process of foreclosing 12 of the nonaccrual loans as detailed later in this report.

When a loan is placed on nonaccrual, interest income is generally not recognized. Any payments received are typically recorded as a reduction in principal. The table below illustrates the negative impact of nonaccrual loans on Corus’ interest income:

	Three Months Ended
	March 31
(in thousands)	2009		2008
Gross amount of interest that would have been recorded at the original rate	$	38,413	$	8,805
Interest that was recognized in income		408		413
Negative impact (foregone interest)	$	38,005	$	8,392

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Cost Overruns on Nonaccrual Loans

As discussed above, cost overruns are an issue that many projects experience. While Corus’ preference is that either the equity investors or the mezzanine lender (to the extent there is one) fund any cost overruns, Corus may ultimately have to do so. As of March 31, 2009 there were 46 nonaccrual loans, 15 of which experienced cost overruns at least partially funded by Corus. The table below summarizes the extent to which Corus continued providing funds to those 15 loans subsequent to the loan becoming nonaccrual:

	Loans with Cost Overruns
	Listed as Nonaccrual
			As of March 31, 2009
			Funded		Total		Amount Funded
(dollars in millions)	#		Balance		Commitment		while on Nonnaccrual
Florida
Miami		6	$	216	$	216	$	56
Other Florida		1		14		14		1
California Total		7		230		230		57
California:
San Diego		1		36		36		—
Los Angeles		1		14		14		4
California Total		2		50		50		4
Las Vegas		3		151		157		10
Phoenix/Scottsdale		2		81		85		12
Houston		1		47		47		—
Total		15	$	559	$	569	$	83

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Completion Stages of Projects Associated with Nonaccrual Condominium Loans

The following table provides the remaining number of units available for sale related to nonaccrual condominium loans by geographic location and by completion status:

Remaining Nonaccrual Condominium Units Available For Sale By Major Metropolitan Area

	As of March 31, 2009
			Units
							Expected Completion Timeframe
	Loans		Total		Completed		0-6 Months		6-12 Months		> 12 Months
	#		#		#		#		#		#
Florida:
Miami/Southeast Florida		12		2,642		1,510		1,132		—		—
Tampa		3		876		876		—		—		—
Other Florida		2		193		193		—		—		—
Florida Total		17		3,711		2,579		1,132		—		—
San Diego		3		212		212		—		—		—
Atlanta		4		1,052		39		1,013		—		—
Las Vegas		3		825		825		—		—		—
Phoenix/Scottsdale		2		261		261		—		—		—
Chicago		1		332		—		332		—		—
Washington D.C.		1		84		—		84		—		—
New York City		2		117		10		—		—		107
Austin		1		260		260		—		—		—
Other		2		393		280		—		—		113
Total		36		7,247		4,466		2,561		—		220

52

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Unit Sales of Condominium Projects Associated with Nonaccrual Loans

The table below provides details regarding the unit presales and closings in completed condominium buildings collateralizing Corus’ nonaccrual loans:

	Unit Sales Associated with Nonaccrual Completed Projects
			Units
	# of		Total				Remaining at March 31, 2009
	Loans		Project		Closed		Presold (1)		Not Presold
Florida:
Miami/Southeast Florida		9		2,043		533		764		746
Tampa		3		1,554		678		—		876
Other		2		444		251		8		185
Florida Total		14		4,041		1,462		772		1,807
San Diego		3		417		205		—		212
Atlanta		1		104		65		1		38
Las Vegas		3		888		63		328		497
Phoenix/Scottsdale		2		285		24		83		178
New York City		1		25		15		1		9
Austin		1		348		88		5		255
Other		1		396		116		78		202
Total		26		6,504		2,038		1,268		3,198

⁽¹⁾ Represents number of units that are under contract to be sold.

In certain markets, it is very common for buyers to sign contracts committing them to the purchase of a condominium unit well in advance of project completion. These advance purchases are referred to as presales and typically include a deposit from the buyer. Once construction of the building is complete, buyers can then close on their units. If buyers do not close on their purchase, they typically lose their deposit. Under certain conditions, such as delays in delivery of units, the buyer can sometimes get out of a presale contract.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

The table below provides details regarding the unit presales and closings in condominium buildings under construction collateralizing Corus’ nonaccrual loans:

	Unit Sales Associated with Nonaccrual Projects Under Construction
			Units
	# of		Total				Remaining at March 31, 2009
	Loans		Project		Closed		Presold (1)		Not Presold
Miami/Southeast Florida		3		1,132		—		942		190
Atlanta		3		1,045		32		135		878
Chicago		1		333		1		142		190
Washington D.C.		1		84		—		—		84
New York City		1		107		—		—		107
Other		1		113		—		—		113
Total		10		2,814		33		1,219		1,562

⁽¹⁾ Represents number of units that are under contract to be sold.

While Corus has completion guarantees on each of the ten loans still under construction, in the event of significant cost overruns, we consider the financial strength of most of the guarantors to be weak. Corus considers only two of the completion guarantees to be viable. Even though construction is mostly complete on these properties, we do not expect the other guarantors to be willing or able to honor the guarantee if there are significant cost overruns.

We obtain personal guarantees for partial loan repayment for various loans in our portfolio. However, out of our 46 nonaccrual loans, we assigned value to only three of the loans’ guarantees. The total value assigned was $8.2 million.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Collateral Values Relative to Loan Exposure for Nonaccrual Loans

Nonaccrual loans are subjected to a loan-by-loan review whereby the Company’s current credit exposure is compared to the value of the underlying collateral (includes both “hard assets” and the estimated value of any loan guarantees). If the analysis yields a shortfall, Corus will specifically reserve for such shortfall. Subsequently, these reserves may be charged-off when a loss is confirmed (generally when foreclosure is expected or the borrower stops supporting the loan). While Corus will often order appraisals to support the collateral valuation, internal assessments are used as well.

The table below compares the remaining outstanding balance (net of any charge-offs) of Corus’ nonaccrual loans to the fair value of the underlying collateral as well as the method in which the fair value was determined:

											Method in which
			Current								Fair Value Determined
			Funded		Fair Value of		Collateral Shortfalls		Cumulative				Internal
(dollars in millions)	#		Balance		Collateral		(i.e., Specific Reserves)		Charge-Offs		Appraisal		Estimate
Florida:
Miami		14	$	907	$	994	$	45	$	141		10		4
Tampa		3		66		66		—		23		2		1
Other Florida		3		55		57		—		28		1		2
Florida Total		20		1,028		1,117		45		192		13		7
San Diego		4		103		117		—		—		3		1
Los Angeles		2		19		25		—		15		2		—
California Total		6		122		142		—		15		5		1
Atlanta		6		358		364		69		—		3		3
Las Vegas		4		173		181		6		95		1		3
Phoenix/Scottsdale		2		82		86		—		39		1		1
Chicago		1		61		67		11		—		1		—
Washington, D.C.		2		71		81		6		—		2		—
New York City		2		16		21		—		3		1		1
Austin		1		16		18		—		—		—		1
Other		2		69		73		—		—		2		—
Total		46	$	1,996	$	2,150	$	137	$	344		29		17

Corus previously focused its lending efforts on markets that previously experienced among the highest rates of housing growth and price increases. As a result of the economic downturn, these areas have an excess supply of housing units and are experiencing significant price declines. As a result, management considers the markets where most of its nonaccrual loans are located to be distressed residential housing markets.

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CORUS BANKSHARES, INC.
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Financial Condition and Results of Operations — continued

Further Details Related to Nonaccrual Loans

Borrowers are experiencing financial distress as a direct result of the dramatic economic downturn. In order for developers to be successful in building condominium projects, it is important that they sell the individual condominium units shortly after construction is completed. Developer profits on a project can quickly dissipate due to the “carry” costs if the sellout period extends beyond what was originally anticipated. Unanticipated declines in selling prices magnify the impact such that developers can quickly come to the conclusion that after paying off creditors, there is not likely to be anything left for them. Sales pace and pricing combined with difficulties obtaining incremental financing to support the project as needed present the borrower with a difficult situation. It is typically at this point that a developer discontinues supporting the loan and the loan becomes nonaccrual. Importantly, management is continuously monitoring the loan portfolio and will place a loan on nonaccrual when collection of interest is in question.

Given current market conditions, workout options are limited. In cases where management believes that the developer is well qualified to complete the project and effectively sell the units, Corus may opt to continue working with that developer. Otherwise, foreclosure is the best option. Management evaluates each situation individually.

Troubled Debt Restructurings

As of March 31, 2009, Corus had one loan classified as Troubled Debt Restructurings not otherwise included above in either nonaccrual or 90 days past due. The loan relates to an apartment project in Los Angeles, which had an outstanding balance of $35.7 million at March 31, 2009 and was fully funded.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Other Real Estate Owned (“OREO”)

The remaining component of nonperforming assets is OREO, which consists of 16 properties as of March 31, 2009 and is listed below by geographic distribution and by type of collateral at the time of possession:

	Other Real Estate Owned as of March 31, 2009
	Condominium
	Construction				Conversion				Office				Total
(dollars in thousands)	#		Amount		#		Amount		#		Amount		#		Amount
Florida:
Miami/Southeast Florida		1	$	73,235		—	$	—		—	$	—		1	$	73,235
Tampa		—		—		1		9,520		—		—		1		9,520
Orlando		—		—		1		8,627		—		—		1		8,627
Panama City		1		88,574		—		—		—		—		1		88,574
Florida Total		2		161,809		2		18,147		—		—		4		179,956
California:
Los Angeles		1		43,039		—		—		—		—		1		43,039
San Diego		2		46,606		—		—		—		—		2		46,606
California Total		3		89,645		—		—		—		—		3		89,645
Reno		1		87,144		—		—		—		—		1		87,144
Las Vegas		2		74,452		—		—		—		—		2		74,452
Atlanta		1		19,846		1		17,763		—		—		2		37,609
Phoenix/Scottsdale		—		—		3		25,550		—		—		3		25,550
Chicago		—		—		—		—		1		4,720		1		4,720
Total		9	$	432,896		6	$	61,460		1	$	4,720		16	$	499,076

Foreclosure Process

In situations where the loan sponsors are unwilling, or unable, to take the necessary steps to resolve non-compliance with the loan documents, Corus will pursue foreclosure and seek title to the project either with the borrower and mezzanine lender’s cooperation (usually through a deed-in-lieu of foreclosure or an assignment of ownership interest in lieu of foreclosure transaction), or without the borrower and mezzanine lender’s cooperation (usually through a foreclosure process and, ultimately, judicial sale).

Based on our experience thus far, there is no such thing as a typical foreclosure process, with some of the substantial differences due to: (1) loan sponsors’ cooperation (or lack thereof), (2) whether guarantees exist, particularly payment guarantees (in distinction to completion guarantees), and (3) jurisdiction. The prevailing jurisdiction can significantly affect both timing and process (with the presence of guarantees further affecting the process in certain states). The process can become significantly more complicated if the project sponsors file a Chapter 11 bankruptcy for the borrower (Corus’ borrowers are typically “single asset real estate debtors,” a group that is subject to special provisions in the bankruptcy law).

In general, Corus has found that a cooperative transaction can be, depending on the jurisdiction, accomplished fairly quickly, sometimes in as little as a few months. Corus has found that an uncooperative foreclosure can take much longer, anywhere from six months to as long as two years (or more), depending on the jurisdiction, and the level of opposition Corus receives from the borrower and/or mezzanine lender (with bankruptcy generally, although not necessarily, being another reflection of loan sponsor opposition).

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Subject to the inherent uncertainties outlined above, here is an illustrative example of a generalized foreclosure process, the process of a loan migrating from performing to nonperforming to foreclosure, and the potential impact to the allowance (including any typical migration from general reserve to specific reserve). Throughout this process, the loan risk rating and the related allowance for loans losses is continuously challenged.

1)	First signs of trouble and trying to work with loan sponsors. Depending on the extent of the problems, this could result in the loan being placed on nonaccrual and/or included as nonperforming. Some signs of trouble would include slow payments or slow sales of units.
2)	Loan experiences a default, with such default not corrected by loan sponsors within a reasonable period of time. While there are numerous possible events that can give rise to a default, some of the most common result from failures to: a) make timely payment of principal and/or interest, b) cover cost overruns, and c) complete the project substantially as agreed.
3)	The occurrence of an uncorrected material default would give rise to Corus taking the following actions — all of which would occur after the identification of a loan default:

a.	Issuing an official notice of default;
b.	Appraisal — Corus ordering an updated appraisal (the receipt of which could take one to two months after the order has been confirmed with the appraiser);
c.	Rating — Corus would review the loan’s rating, with loans subject to foreclosure proceedings typically downgraded to a rating of Substandard or worse (if not already so rated);
d.	SFAS 114 Assessment — A loan subject to foreclosure would be deemed impaired and, as such, would be individually reviewed by Corus for potential SFAS 114 impairment which could result in the establishment of a specific reserve;
e.	Charge-offs — To the extent amounts have not already been charged off, for loans subject to foreclosure and deemed impaired, Corus would charge-off any “shortfall” (as opposed to impaired loans in non-foreclosure situations, where Corus may establish a specific reserve for the shortfall); and
f.	Nonaccrual & Nonperforming Loan Status — Corus’ general practice is that when a loan deteriorates such that collection of all principal and interest is no longer expected, the loan would be placed on nonaccrual. Loans rated Substandard and where Corus has initiated foreclosure proceedings are typically placed on nonaccrual and thus become a nonperforming loan.

4) Foreclosure completed and OREO asset recorded.

Corus has historically found that advising loan parties it is initiating the foreclosure process sometimes motivates loan sponsors, particularly mezzanine lenders and/or institutional equity investors, to provide additional support for the project and Corus’ loan. While support had occurred on occasion in the past and generally foreclosure was initiated only after attempts at trying to come to a cooperative settlement with the borrowers, in recent months the level of support has generally eroded.

The foreclosure process is quite different from state to state. For example, Florida and Illinois are judicial foreclosure states. An actual lawsuit must be filed and each defendant (primarily the borrower and lien holders) must be served with summons, and then be given a chance to file an answer. Due to congestion in the courts, a routine foreclosure is likely to take about six months and a contested foreclosure could take a year or longer.

California, Georgia, Arizona, Texas and Nevada are non-judicial. Typically the action is commenced by recording a notice of default and allowing a specified time period to pass. After that a trustee under a deed of trust sets a sale and conducts it. The trustee is able to issue a deed that conveys good title to the purchaser at sale. In California, Nevada and Arizona the notices and time periods take about four months. In Georgia and Texas they take about thirty days or less.

58

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

As mentioned above, bankruptcy may create substantial delay in some instances. It should be noted however, that single asset real estate debtors are generally required to file a confirmable plan of reorganization within three months. That provision provides lenders with tremendous leverage to prevent endless delays in bankruptcy.

The above timing implies the project becoming OREO between four and twelve months after issuance of the default notice. Again, and as indicated above, this process could be stretched out substantially, perhaps extending out as long as two years (or more), depending upon jurisdiction and/or if the loan sponsors oppose Corus foreclosure.

Frequency of OREO Valuations

As mentioned previously in the “Foreclosure Process” section, an updated appraisal is obtained after a loan experiences a default and is the basis for the initial value of the OREO property. After foreclosure, valuations are performed at least quarterly by management, using a very similar methodology to how it assesses its impaired loan portfolio (refer to the valuation discussion in the “Allowance for Loan Losses” section of Management’s Discussion and Analysis of Financial Conditions and Results of Operations). A new appraisal from an independent appraiser is obtained annually if the property is held for more than one year.

Outlook for Workout and Resolution of OREO Properties

Corus generally has several options with regard to properties acquired via foreclosure. First, Corus could sell the property as a whole to a bulk purchaser. While this may be the quickest resolution, the pricing may be such that this is not the most desirable option. Second, Corus could complete the project, to the extent necessary, and internally manage the process of selling the units individually in the market. Finally, depending on the property and the market it is located in, Corus may opt to rent individual units until such time as property values recover and a bulk sale is more attractive. Importantly, each property is unique and management will decide on the best strategy for dealing with OREO properties on a case-by-case basis.

59

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Projects to be Sold in Bulk

Eight OREO properties are currently being marketed for bulk sale. All but one of the properties is ready for occupancy and six of the eight properties are currently being operated as rental properties.

The table below summarizes these eight properties:

OREO Projects to be Sold in Bulk as of March 31, 2009
(dollars in thousands)						If rented,			Carry Value at
Location	Property Type	OREO Date		Total Units		Occupancy %			March 31, 2009
Los Angeles	Condo - Construction		10/10/2008		100	NA			$	43,039
Atlanta	Condo - Conversion		3/3/2009		193		74	%		17,763
Phoenix	Condo - Conversion		10/7/2008		186		41	%		13,173
Tampa	Condo - Conversion		11/14/2008		199		95	%		9,520
Orlando	Condo - Conversion		11/14/2008		229		86	%		8,627
Phoenix	Condo - Conversion		3/24/2009		74		19	%		8,355
Chicago	Office		12/27/2006	NA		NA				4,720
Phoenix	Condo - Conversion		3/24/2009		37		10	%		4,022
Total									$	109,219

NA — Not applicable.

Projects to be Sold as Individual Units

There are eight OREO properties that are currently being sold as condominiums, on a unit-by-unit basis.

OREO Projects to be Sold as Individual Units as of March 31, 2009
				Estimated	Estimated
(dollars in thousands)				Completion	Cost to		Total		Units		Carry Value at
Location	Property Type	OREO Date		Timeframe	Complete		Units (1)		Sold (1)		March 31, 2009
Panama City	Condo - Construction		9/11/2008	NA	$	6,814		700		—	$	88,574
Reno	Condo - Construction		12/29/2008	NA		—		380		12		87,144
Miami/Southeast Florida	Condo - Construction		11/7/2008	NA		—		396		9		73,235
Las Vegas	Condo - Construction		2/5/2009	1-3 Months		2,500		305		—		62,762
San Diego	Condo - Construction		1/8/2009	NA		—		77		4		25,706
San Diego	Condo - Construction		3/11/2008	1-3 Months		2,846		180		44		20,900
Atlanta	Condo - Construction		12/2/2008	NA		—		163		8		19,846
Las Vegas	Condo - Construction		2/11/2009	NA		2,846		61		1		11,690
Total					$	15,006		2,262		78	$	389,857

NA — Not applicable as building is complete.
(1)	Represents the total number of units that were taken into OREO. Does not include units sold by devloper prior to the property becoming OREO.

The property located in Panama City, Florida was acquired by a wholly owned subsidiary of Corus through a deed-in-lieu of foreclosure in September 2008. Primarily as a means of resolving pending litigation and claims associated with the property, the subsidiary filed a petition under Chapter 11 of the United States Bankruptcy Code on September 29, 2008. The bankruptcy was not in any way a reflection of the financial health of Corus. The property consists of 765 units, 65 of which were sold prior to the deed-in-lieu transaction.

60

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

In addition to the above mentioned properties, the Company is in process of taking possession of 12 other properties collateralizing our loans. All of the loans have been classified as nonaccrual and have a total commitment of $408.0 million. The table below illustrates the geographical distribution of the loans in process of foreclosure in terms of funded balance:

	Loans in Process of Foreclosure
	Funded Loan Balances as of March 31, 2009
	Condominium
	Construction				Conversion				Total
(dollars in thousands)	#		Amount		#		Amount		#		Amount
Florida:
Miami		3	$	164,904		—	$	—		3	$	164,904
Tampa		—		—		2		47,604		2		47,604
Florida Total		3		164,904		2		47,604		5		212,508
Las Vegas		1		48,170		—		—		1		48,170
Houston		1		47,231		—		—		1		47,231
Phoenix/Scottsdale		1		37,963		—		—		1		37,963
San Diego (1)		1		13,681		1		9,844		2		23,525
Boston (2)		1		21,647		—		—		1		21,647
New York City		1		11,713		—		—		1		11,713
Total		9	$	345,309		3	$	57,448		12	$	402,757

(1)	Foreclosure of the property collateralizing the conversion loan completed in April 2009.
(2)	Foreclosure of the property completed in April 2009.

Loans in Process of Foreclosure — Condominium Units Available For Sale By Major Metropolitan Area

	As of March 31, 2009
			Units
							Expected Completion Timeframe
	Loans		Total		Completed		0-12 Months		> 12 Months
	#		#		#		#		#
Florida:
Miami		3		569		569		—		—
Tampa		2		658		658		—		—
Florida Total		5		1,227		1,227		—		—
Las Vegas		1		248		248		—		—
Houston		1		280		280		—		—
Phoenix/Scottsdale		1		74		74		—		—
San Diego		2		87		87		—		—
Boston		1		113		—		—		113
New York City		1		107		—		—		107
Total		12		2,136		1,916		—		220

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Potential Problem Loans

In addition to requiring the disclosure of “nonperforming loans” (i.e., loans which are nonaccrual and/or 90 days or more past due, as well as restructured loans), Industry Guide 3 of the U.S. Securities and Exchange Commission also requires the disclosure of loans which are not now nonperforming, but, “where known information about possible credit problems of borrowers causes management to have serious doubts as to the ability of such borrowers to comply with the present loan repayment terms and which may result in disclosure of such loans as nonperforming.”

As of March 31, 2009, management has identified 23 Potential Problem Loans, as detailed below:

	Potential Problem Loans as of March 31, 2009
	Condominium - Construction							Other Collateral Types							Total
				Funded		Total					Funded		Total				Funded		Total
(dollars in millions)	#			Balance		Commitment		#			Balance		Commitment		#		Balance		Commitment
Florida:
Miami		1		$	38	$	49		—		$	—	$	—		1	$	38	$	49
Other Florida		1			66		74		1	(1)		11		11		2		77		85
Florida Total		2			104		123		1			11		11		3		115		134
Los Angeles		9	(2)		516		611		—	(2)		72		90		9		588		701
Hawaii		1			74		169		—			—		—		1		74		169
Washington, D.C.		1			126		145		—			—		—		1		126		145
New York City		2			99		132		—			—		—		2		99		132
Chicago		1			72		72		—			—		—		1		72		72
Atlanta		1			33		34		—			—		—		1		33		34
Other		5			226		326		—			—		—		5		226		326
Total		22		$	1,250	$	1,612		1		$	83	$	101		23	$	1,333	$	1,713

(1)	Condominium conversion loan.
(2)	The underlying collateral included a condominium component combined with a hotel. The commitment amount has been split between the appropriate categories. With respect to the “#” of loans, the loan has been included with condominium loans.

The table below presents a rollforward of the balance of Potential Problem Loans for the three months ended March 31, 2009:

	Three Months Ended
	March 31, 2009
				Funded			Total
(dollars in millions)	#			Balance			Commitment
Beginning Balance		25		$	1,107		$	1,655
Additions		6			334			391
Subtractions:
Became a Nonperforming Loan		(5	)		(134	)		(147	)
Status improved		(3	)		(105	)		(164	)
Balance changes	NA				131			(22	)
Balance at March 31, 2009		23		$	1,333		$	1,713

NA — Not applicable.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

Allowance for Credit Losses

The Allowance for Credit Losses (the “Allowance”) is comprised of the Allowance for Loan Losses and a separate Liability for Credit Commitment Losses. The Allowance for Loan Losses is a reserve against funded loan amounts, while the Liability for Credit Commitment Losses is a reserve against unfunded commitments.

As of March 31, 2009, the Allowance for Credit Losses totaled $433 million, an increase of $338 million compared to March 31, 2008. A reconciliation of the activity in the Allowance for Credit Losses is as follows:

	Three Months Ended
	March 31
(in thousands)	2009			2008
Balance at beginning of period	$	304,907		$	76,992
Provision for credit losses		193,250			36,800
Charge-offs:
Commercial real estate:
Condominium:
Construction		(65,527	)		(3,435	)
Conversion		—			(15,689	)
Inventory		—			—
Total condominium		(65,527	)		(19,124	)
Other commercial real estate		(29	)		—
Commercial		(50	)		—
Residential real estate and other		(62	)		—
Total Charge-Offs		(65,668	)		(19,124	)
Recoveries:
Commercial real estate		—			—
Commercial		1			—
Residential real estate and other		248			159
Total Recoveries		249			159
Balance at March 31	$	432,738		$	94,827

During the first three months ended March 31, 2009, Corus recorded a provision for credit losses of $193 million. Even after charge-offs of $66 million, Corus’ Allowance has more than quadrupled since the same time last year. Furthermore, the increase in the Allowance, combined with total commitments declining year over year by $2.6 billion, resulted in an increase in our ratio of the Allowance to total commitments from 1.2% to 8.0%.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

The Allowance for Credit Losses is presented on Corus’ balance sheet as follows:

	March 31		December 31		March 31
(in thousands)	2009		2008		2008
Allowance for Loan Losses:
Specific reserve	$	137,247	$	140,684	$	11,015
General reserve		201,375		103,174		69,369
Unallocated		—		25,499		7,093
Total Allowance for Loan Losses		338,622		269,357		87,477
Liability for Credit Commitment Losses (1)		94,116		35,550		7,350
Total	$	432,738	$	304,907	$	94,827

⁽¹⁾ Included as a component of other liabilities.

Allowance for Loan Losses

1)	Specific Reserves
	As of March 31, 2009, Corus’ Allowance for Loan Losses included specific reserves of $137 million. Management’s determination as to which loans to specifically review for impairment is based on loan ratings as determined by management, in accordance with the regulatory standards of the Office of the Comptroller of the Currency (the “OCC”). Impairment testing was completed for all loans with the following characteristics: (1) loans which are rated Substandard, Doubtful, or Loss (regulatory classifications or definitions); (2) loans which are on nonaccrual status; (3) loans which are 90 days or more past due; and (4) loans determined to be a “Troubled Debt Restructuring.” In addition, for purposes of determining the appropriate Allowance at March 31, 2009, management applied additional procedures to identify impaired loans. These additional procedures included specifically reviewing all commercial real estate loans regardless of regulatory rating, excluding loans with balances less than $1 million (less than 1% of loan portfolio). Loans determined to be impaired were segregated from the remainder of the portfolio and were subjected to a specific review in an effort to determine whether or not a specific reserve was necessary and, if so, the appropriate amount of that reserve.
	The loans with specific reserves are primarily rated substandard and/or nonaccrual and are typically identified through Corus’ process of reviewing and reassessing the ratings on loans. The loan rating process is performed by commercial loan personnel. The accuracy of the loan ratings is validated via a third-party loan review which is performed quarterly, the results of which are reported directly to the Company’s Audit Committee. The third-party loan review covers a substantial amount of the portfolio each year.
	Corus typically measures impairment based on the estimated fair value of the underlying collateral. If foreclosure is probable though, Corus would always measure impairment based on the estimated fair value of the collateral.
	The determination as to whether or not a shortfall exists (and a resulting specific reserve) is typically dependent on the valuation of the underlying collateral (guarantees, forfeited earnest money deposits, etc. can supplement the collateral). While Corus uses appraisers to determine values, internal models are used as well. Valuations based on our internal models have generally been consistent with the valuations determined by the appraisers and, as such, management believes the internal valuations can be reasonably relied upon for valuation purposes.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

	Corus’ internal models generally reflect the value of a project on an as-completed basis. Therefore, for projects which are not yet complete, Corus must subtract its remaining unfunded commitment from the as-completed value to arrive at a net collateral value for the project. In some cases, management may believe that additional funds, above and beyond Corus’ unfunded commitment, will be needed to complete the project. In this case, if management believes that Corus will need to provide these additional funds, these amounts will be subtracted from the as-completed value as well.
	Corus then compares its recorded investment (i.e., balance outstanding) in the impaired loans against the net collateral value securing the project. For those impaired loans where the net collateral value is less than Corus’ recorded investment in the loan — what Corus refers to as a “shortfall”, Corus will establish a specific reserve in the allowance for loan losses equal to the shortfall. In general, Corus will maintain specific reserves for losses that are “unconfirmed” and record charge-offs for losses that become “confirmed.” Subsequent assessments will determine whether to record a charge-off on the loan equal to the shortfall.
	If the loan sponsors (borrowers and third-party mezzanine lenders) were providing material support to Corus’ loan and/or the project collateralizing the loan, Corus would generally consider a loss implied by the estimated shortfall on an impaired loan to be unconfirmed, and thus establish a specific reserve. At the point that loan sponsors cease providing material support to the loan and/or project, or if Corus believes foreclosure is probable, then Corus generally would deem the estimated loss to be confirmed and record a charge-off.
	Collateral values are initially based on an outside independent appraiser’s valuation determined at the inception of the loan. After inception, Corus generally arrives at an estimate of the fair value of the underlying collateral using the lower of appraised value or internally developed estimates.
2)	General Reserves
	The general reserve as of March 31, 2009 totaled $201 million, an increase of $98 million from March 31, 2008. The increases are consistent with the negative trends in the residential for-sale housing and mortgage markets, as reflected in the increased level of charge-offs and the increase in nonaccrual loans. Nonaccrual loans increased dramatically during the last twelve months to $2.0 billion at March 31, 2009, almost five times the balance at March 31, 2008.
	For those loans that were either not specifically reviewed as part of the specific reserve process or were reviewed but determined not to be “impaired”, a general reserve is calculated pursuant to SFAS No. 5 “Accounting for Contingencies.” Corus calculates its general reserve for its portfolio of commercial real estate secured projects, by separating the portfolio by: (1) collateral type — condominium construction, condominium conversion, other commercial real estate construction and other commercial real estate non-construction, (2) seniority of mortgage — first mortgages vs. “mezzanine” loans (i.e., second mortgages), and lastly (3) regulatory rating — Pass, Special Mention, and Substandard. Corus’ remaining loans (i.e., commercial, residential, overdrafts and other) are separated only by loan type (regulatory ratings are not factored in).

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

	The Company applies a historical net charge-off percentage against each of these subgroups (i.e., construction first mortgage Pass, construction first mortgage Special Mention, construction first mortgage Substandard, conversion first mortgage Pass, and first mortgage Special Mention, etc.) based on their respective historical net charge-offs (to the extent such charge-offs exist) over the past 12 months calculated as the sum of net charge-offs by subgroup divided by the average balances over that time frame.
	In the first quarter of 2009, the Company reduced the historical net charge-off analysis to a rolling 12 month instead of a 24 month historical view as management felt that this more closely represents Corus’ inherent losses. This change in estimate resulted in a significant increase in the reserve. While the economic environment is clearly in a state of flux, management believes that the 12 month charge-off history to be more reflective of what we would expect to be the inherent losses in the loan portfolio in this environment and is a conservative approach to the reserve amount. Also, the increase in the reserve amount that results from this shortened charge-off timeframe is consistent with the rise in nonperforming loans.
	In the past, the Bank had then applied a Management Adjustment Factor (“MAF”) that represented the loss factor used in the Bank’s ALLL calculation as the Bank did not have significant CRE charge-off history prior to 2007. However, in the first quarter of 2009, management decided to reduce the MAF to zero. As the Bank developed loss history the MAF was continually monitored to determine appropriateness of loss factors (i.e. does the inherent loss rate differ from historical loss experience). In the future, management will adjust the MAF percentage if circumstances dictated.
	Based on the risk factors discussed above, management believed that the overall risk in the portfolio had increased and as such, the Total Loss Factor was increased during the first quarter of 2009 reflecting a higher historical net charge-off factor. The increase was partially offset by a decreased MAF due to management placing a greater reliance on the historical net charge-off factor.
3)	Unallocated Reserves
	The Bank historically maintained an unallocated reserve in its Allowance for Loan Losses account, but reduced this to zero also in the first quarter of 2009. Management felt that having charge-off history for the past 12 months (as discussed in the General Reserves section above) and relying on that data to reserve for loan losses eliminated the need for an unallocated reserve. Similar to the discussion on the MAF factor above, an unallocated reserve is highly judgmental and subject to many moving pieces. Management will continue to monitor the appropriateness of this amount and adjust accordingly based on economic, environmental, and loan portfolio characteristic factors.

Liability for Credit Commitment Losses

The process for estimating the Liability for Credit Commitment Losses closely follows the process outlined above for the Allowance for Loan Losses. Specific reserves are typically not applicable to unfunded amounts since any specific reserve would first be applied to the funded balance. General reserves are based on the same loss factors used for the Allowance for Loan Losses. Given the current economic environment and the current loan portfolio characteristics (distressed geographic regions where properties are located and increasing levels of nonperforming loans), management felt it appropriate to utilize the same historical loss factors as the loan loss reserve.

66

CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

The allocation of the Allowance for Credit Losses was as follows:

	March 31		December 31		March 31
(in thousands)	2009		2008		2008
Commercial real estate:
Condominium:
Construction	$	350,147	$	229,611	$	58,394
Conversion		1,292		2,462		18,729
Inventory		32		35		928
Other commercial real estate:
Office		5,580		3,882		2,491
Rental apartment and other		73,853		39,709		5,270
Commercial		1,834		1,406		1,507
Residential real estate and other		—		143		172
Unallocated		—		27,659		7,336
Total	$	432,738	$	304,907	$	94,827

The increased allocation to rental apartment and other is consistent with the reclassification of several condominium construction and conversion loans to rental apartments reflecting the change in the underlying projects.

Guarantees

Most (but not all) of the Bank’s lending is done on a non-recourse basis, meaning the loan is secured by the real estate without further benefit of payment guarantees from borrowers. However, the Bank routinely receives guarantees of completion and guarantees that address “bad acts.” These various guarantees can be described as follows:

1)	Payment Guarantees
	Guarantor guarantees repayment of principal and interest. Often there might be limitations on the guaranteed amounts, and guarantors vary dramatically in their financial strength and liquidity. Overall, however, these guarantees would protect the Bank to a certain degree even if the sale proceeds from the asset were insufficient to repay the loan in full. The Bank does negotiate for and receive repayment guarantees in certain situations, but the vast majority of the Bank’s lending activity is done without repayment guarantees.
2)	Completion Guarantees (For construction loans)
	Guarantor guarantees to pay for costs necessary to complete the asset, to the extent such costs exceed the original budget. Upon completion of the asset, and provided there are no construction liens filed by contractors, such guarantees typically lapse. These guarantees do not protect the Bank from decreases in collateral value. They do help ensure that the Bank’s exposure in a deal is not higher than originally expected. Again, there are vast differences in the financial strength of completion guarantors, and in certain (relatively infrequent) circumstances, the Bank agrees to limits on, or even does without, completion guarantees. Overall, however, the Bank views completion guarantees from capable guarantors as a very important part of the underwriting process.

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3)	Bad Act Guarantees
	Guarantor guarantees repayment of losses incurred by the Bank in the event borrower commits fraud, negligence, or a wide variety of other “bad acts.” The scope of bad acts is often heavily negotiated. Very often it is defined to include bankruptcy filings, in which case Bad Act guarantees can help ensure that the Bank takes control of assets securing bad loans in a timely manner.

INVESTMENT PORTFOLIO

The investment portfolio, which Corus often refers to as the “liquidity management assets”, includes U.S. Government agency securities, time deposits with banks, FDIC guaranteed bank notes, interest-bearing deposits with the Federal Reserve, and federal funds sold. At March 31, 2009, the liquidity management assets stood at $3.0 billion versus $4.3 billion as of March 31, 2008. The Bank’s liquidity management assets as of March 31, 2009 included $1.3 billion of agency securities, $0.8 billion of time deposits with other financial institutions, $0.7 billion of FDIC guaranteed bank notes, and $0.2 billion of interest-bearing deposits with the Federal Reserve.

The portfolio of agency securities consists of short-term (one year or less), senior unsecured debt issued by the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and the Federal Home Loan Bank System (the “FHLB”). These organizations, which were chartered by Congress to facilitate home ownership, are most commonly referred to as government-sponsored enterprises (“GSE”). While Fannie Mae and Freddie Mac are publicly traded companies (under the symbols FNM and FRE, respectively), the FHLB is not publicly traded (instead owned by its member financial institutions, consisting of over 8,000 financial institutions from all 50 states). As of March 31, 2009, Corus had investments in GSE-issued debt totaling approximately $1.3 billion: $300 million issued by Fannie Mae, $575 million by Freddie Mac and $449 million by the FHLB. Approximately 81% of these securities mature during the second quarter of 2009, with the remaining securities maturing prior to December 31, 2009. The market for these securities is very liquid and the securities could be sold to meet the liquidity needs of the Company.

In September 2008, Fannie Mae and Freddie Mac were taken into conservatorship by the federal government and are now being managed, in part, by their regulator, the Federal Housing Finance Agency. While the federal government has not explicitly guaranteed the repayment of the senior debt of either entity, the actions that led to the conservatorship include several support initiatives that, in the management’s opinion, improve the likelihood that these debts will be repaid in full and in accordance with their terms and conditions. Likewise the FHLB debt does not carry any explicit government guarantee (debt issued by the FHLB are joint and several obligations of all 12 banks of the FHLB). The Company does not own any GSE preferred shares.

The Company’s portfolio of time deposits consists of institutional negotiable certificates of deposit (“CD”) issued by other, domestic financial institutions. These CDs are not protected by Federal Deposit Insurance Corporation insurance. As of March 31, 2009, the CD portfolio was diversified among 11 different large banking organizations with more than $50 billion of assets.

Although the CDs are negotiable, and could therefore be sold prior to maturity, management anticipates that the Company will hold most of the CDs until maturity. The Company buys predominantly short-term CDs and staggers the maturities of the CDs within its desired maturity range: $0.7 billion mature during the second quarter of 2009 and $0.1 billion of the CDs mature in the third quarter of 2009.

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At the time each CD was purchased, management believed that the issuing institution was well capitalized, and, as of December 31, 2008, each issuer reports capital levels in excess of well-capitalized thresholds. Furthermore, the Company attempts to minimize its credit risk by keeping abreast of the market, avoiding issuers with excessive “headline risks” or other perceived weaknesses, and/or purchasing CDs with shorter maturities. Of the $0.8 billion of CDs, approximately $344 million was on deposit at issuers who experienced a credit rating downgrade since the Company placed the deposit, however, none of these downgrades were to “speculative” levels. Of these $344 million of “downgraded” deposits, $326 million will mature in the second quarter of 2009 (or has already matured) and the other $18 million will mature in the third quarter of 2009.

During the first quarter of 2009, the Bank purchased FDIC guaranteed bank notes issued under the government’s Temporary Liquidity Guarantee Program (“TLGP”). These notes are senior unsecured debt issued by Federal Deposit Insurance Corporation insured depository institutions or FDIC designated affiliates of FDIC insured depository institutions and are 100% guaranteed by the full faith and credit of the FDIC. All guarantee fees are paid by the issuer. These notes can be issued with either fixed or floating rates.

As of March 31, 2009, the Bank had purchased approximately $0.7 billion of FDIC guaranteed bank notes from 10 different issuers. All of these notes bear interest at a floating rate and are based on 3 month Libor. Approximately 32% of these FDIC guaranteed bank notes mature in 2011 and another 67% mature in the first half of 2012.

TAXES RECEIVABLE

Due to losses incurred during 2008 and in the first quarter of 2009, Corus recorded $140.6 million of current tax benefits. This amount, which is recoverable through net operating loss carryback claims and other tax refund claims, is included in taxes receivable as of March 31, 2009.

OTHER ASSETS

Other assets consist primarily of deferred tax assets and the Bank’s required investment in Federal Reserve Bank stock. The decrease in other assets compared to 2008 was driven almost entirely by the change in the balance of the deferred tax assets and its related valuation allowance.

	Other Assets
	March 31		December 31		March 31
(in millions)	2009		2008		2008
Deferred Tax Assets	$	11	$	43	$	26
Federal Reserve Bank Stock		17		15		15
Other		30		28		20
Total Other Assets	$	58	$	86	$	61

Deferred tax assets result from differences between the timing of when income or expense is recorded for financial statement purposes compared to when the income or expense is taxable or deductible for tax return purposes. Multiple factors combined to drive the majority of the fluctuation in deferred taxes. First, the tax deduction related to the Provision for Credit Losses (which increases the Allowance for Loan Losses) is not allowed until the underlying loans are charged off. This results in an increase in deferred taxes receivable during periods of growth in the Allowance for Loan Losses. Another major factor impacting the balance of deferred taxes was the sale of Corus’ equity portfolio. Large deferred tax balances can arise during periods of increases or decreases in the value of investment portfolio values (in Corus’ case a large deferred tax liability due to the unrealized gains in the portfolio). The liquidation of the portfolio “unwound” the deferred liabilities. The increase in deferred taxes resulting from higher balances in the Allowance for Loan Losses and the liquidation of the equity securities portfolio was partially offset by a deferred tax valuation allowance. The valuation allowance was established to adjust the balance of the deferred tax asset to an amount that management determined is “more likely than not” to be realized. Please see the section titled “Income Tax Expense” for more information.

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COMPOSITION OF DEPOSITS

	March 31				December 31				March 31
(dollars in millions)	2009				2008				2008
Retail certificates of deposit	$	5,024	70	%	$	5,247	69	%	$	5,415	70	%
Money market		1,569	22			1,719	23			1,567	20
Demand		197	3			208	3			246	3
NOW		170	2			189	2			250	3
Savings		105	2			113	1			121	2
Brokered certificates of deposit		92	1			116	2			185	2
Total	$	7,157	100	%	$	7,592	100	%	$	7,784	100	%

At March 31, 2009, approximately 56% of the Bank’s $7.1 billion in retail deposits (excluding brokered deposits) were sourced from outside of Illinois. By marketing its deposit products nationally, the Bank is able to attract deposits without being limited to competing solely in the very competitive Chicago market. Total retail deposits consisted of approximately 170,000 accounts.

The strength of our deposit base is further bolstered by the recent increase in deposit insurance approved by the Federal Deposit Insurance Corporation (the “FDIC”). Effective October 3, 2008, the FDIC increased the level at which they insure deposits, in general, from $100,000 per account to $250,000 per account. While the increase in insurance is officially scheduled to expire December 31, 2009, many believe that the increase will ultimately be made permanent. While the majority of Corus’ deposits were fully insured under the old limits, nearly all of Corus’ external deposits, approximately 99%, are fully insured based on the new limits.

As discussed in Note 1 of the consolidated financial statements, as of February 18, 2009, the Bank consented and agreed to the issuance of a Consent Order (the “Order”) by the Office of the Comptroller of the Currency, its primary regulator. Among other things, the Order emphasizes that the Bank must comply with certain restrictions with regard to the interest rates the Bank may offer to its depositors. The current rule on interest rate restrictions states that a less than well-capitalized bank (which includes the Bank) cannot pay interest rates higher than 75 basis points above the national average rates for each deposit type. While the current rule clearly establishes the maximum rate, it does not define the Bank’s normal market. That decision rests currently with the FDIC.

Corus submitted a plan to the FDIC that defined our normal market area as the national market. In addition, this plan stated that the Bank would use the national average rates that appear on Bankrate.com each day. The FDIC approved our national market designation and our use of the daily Bankrate.com average national rate table to determine the “base” rate. Our maximum rate under the interest rate restriction rules would then be 75 basis points over the base rate for each deposit product.

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On January 27, 2009, a new rule was proposed by the FDIC that would amend its existing rules which impose interest rate restrictions on deposits that can be paid by depository institutions that are not “well-capitalized.” Under this new rule, affected depository institutions would be allowed to pay a “national rate” plus 75 basis points, and the FDIC would set and publish the national rate. To compute the national rate, the FDIC would use all the data that was available from approximately 8,300 banks and thrifts (and their branches) to determine a national average rate for each deposit product. Banks that are not well-capitalized would then be limited to paying 75 basis points over the national average rates set by the FDIC for each deposit product.

We do not know whether there will be changes to the proposed rule or whether it will be adopted at all, or what impact the final rule will have on Corus. However, the Bank has historically paid above average rates locally and nationally, and as a result, the restrictions on interest rates could cause a decrease in both new and existing deposits, which would adversely impact our business, financial condition, and results of operations.

The Chicago market is extremely fragmented (over 140 banks and thrifts) and competitive. As loan demand began to increase, the Bank explored several different deposit gathering strategies, including building new branches and acquiring brokered certificates of deposit. Ultimately, it was decided that the Bank would market its deposit products on a national basis.

Corus concluded that de novo branching was expensive and its success uncertain. It was also a strategy that was already being pursued by numerous Chicago-area banks. Since Corus did not have an extensive branch network, the decision to offer above average rates nationally proved to be the most efficient and cost effective strategy for the Bank. The strategy was scalable because deposits could be added or reduced based on the loan funding needs of the Bank and it was cost effective because the Bank wouldn’t be saddled with the overhead of a large branch network when loan volume declined. And since the Bank originated loans on a national basis, it made sense to originate deposits nationally as well.

Corus Bank’s ability to gather deposits is a function of its ability to continue to offer above national average rates and as stated above, we do not know what impact the new rule will have on the Bank’s deposit rates, and therefore, its ability to attract and retain deposit balances.

SUBORDINATED DEBENTURES RELATING TO TRUST PREFERRED SECURITIES

As of March 31, 2009, Corus had $414.0 million in floating rate junior subordinated notes (the “Debentures”) which included the original issuance of $404.6 million in Debentures, as well as $9.4 million in deferred interest payments related to those Debentures. The Debentures were issued to unconsolidated subsidiary trusts of the Company (the “Trusts”). Each Trust’s sole purpose is to issue Trust Preferred Securities, and then use the proceeds of the issuance to purchase debentures with terms essentially identical to the Trust Preferred Securities, from the Company.

The Debentures each mature 30 years from their respective issuance date, but are redeemable (at par) at Corus’ option at any time commencing on the fifth anniversary of their issuance (or upon the occurrence of certain other prescribed events). Furthermore, while interest payments on the Debentures are payable quarterly, so long as an event of default has not occurred, Corus may defer interest payments for up to 20 consecutive quarters. Events of default under the terms of the debenture agreements include failure to pay interest after 20 consecutive quarters of deferral, failure to pay all principal and interest at maturity, or filing bankruptcy.

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The deferral provisions were intended to provide Corus with a measure of financial flexibility during times of financial stress due to market conditions, such as the current state of the financial and real estate markets. During the deferral period Corus is precluded from declaring or paying any dividends to common shareholders or repurchasing its common stock, among other restrictions.

On November 18, 2008, Corus’ Board of Directors (the “Board”) elected to defer further interest payments on each of the Debentures in order to conserve cash at the holding company. As no default has occurred, Corus exercised the right to defer interest payments for up to 20 consecutive quarters. The Company continues to accrue interest expense and, under the terms of the Debentures, is required to bring the interest payments current in the fourth quarter of 2013. The Company has provided appropriate notice of its election to defer interest payments to the Trustee of each Trust as required by the respective indentures.

On February 18, 2009, the Company entered into a Written Agreement (the “Agreement”) with the Federal Reserve Bank of Chicago (the “FRB”). The Agreement restricts the Company from paying any interest or principal on subordinated debt or trust preferred securities, without the prior approval of the FRB. While no interest payments are required until 2013, the existence of the Agreement could ultimately result in a default under the provision of the Debentures.

All of the outstanding Debentures are variable-rate, with interest rates ranging from three-month LIBOR plus 1.33% to three-month LIBOR plus 3.10% (resetting quarterly). As such, management cannot say with certainty what the interest expense on the Debentures will be in the future. However, based on March 31, 2009, market interest rates, the interest expense would be approximately $15 million per annum.

Finally, while the Trusts are not consolidated with the Company for financial statement purposes, banking regulations allow for bank holding companies to include (up to certain limits) the amount of Trust Preferred Securities, issued by subsidiary trusts, in their regulatory capital calculations. As of March 31, 2009, Corus included $1.4 million of Trust Preferred Securities in its “Tier 1 Capital” and in “Tier 2 Capital.” See the section titled “Regulatory Capital and Ratios” of this Management’s Discussion and Analysis of Financial Condition and Results of Operations for further information.

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LIQUIDITY AND CAPITAL RESOURCES

Corus’ consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our ability to continue as a going concern is substantially dependent on the successful execution of the actions referred to in Note 1 of the consolidated financial statements. The uncertainty of successful execution of our plan, among other factors, raises substantial doubt as to our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

SOURCES

Corus (Holding Company)

At March 31, 2009, the holding company had cash and marketable equity securities of $6 million and $47 million, respectively, for a total of $53 million. By comparison, the holding company had cash and marketable equity securities of $203 million and $70 million, respectively, for a total of $273 million one year earlier. During the first half of 2008, the holding company sold its entire portfolio of equity securities in financial industry companies. See Uses section below regarding decrease in cash compared to 2008. At March 31, 2009, all holding company cash balances were held on deposit with the Bank.

Historically, the holding company has relied on a combination of earnings at the Bank, received in the form of dividends, and the issuance of Trust Preferred Securities as sources of liquidity. It is unlikely, however, that either source will be available for the foreseeable future.

Ongoing troubles in the credit market continue to negatively impact the Bank’s loan portfolio and earnings power thus limiting its ability to fund the holding company. In addition, on February 18, 2009, the holding company entered into a written agreement (the “Written Agreement”) with the Federal Reserve Bank of Chicago (the “FRB”). The Written Agreement, among other things, restricts the holding company from taking any dividends or any other payment representing a reduction in capital from the Bank, without the prior approval of the FRB.

Trust Preferred Securities are also not likely to be a source of liquidity to the holding company. The Agreement with the FRB includes a restriction limiting Corus’ ability to increase debt. Specifically, Corus is restricted from incurring, increasing or guaranteeing any debt without the prior approval of the FRB.

In an attempt to address the issues many banks are facing, the U.S. Treasury Department has made funds available to certain banks under its Troubled Asset Relief Program Capital Purchase Program (the “Program”). As disclosed in previous filings, the holding company submitted its application for funds under the Program on November 14, 2008. Corus has received a preliminary response from the Treasury Department indicating that it will not approve the application.

In an attempt to increase capital and secure additional liquidity for the holding company, the Company’s Board of Directors formed a Strategic Planning Committee. The Strategic Planning Committee hired an investment banking firm to seek all strategic alternatives to enhance the stability of the Company. Possible strategic alternatives include, among others, a capital investment, sale, strategic merger or some form of restructuring. The Company’s likelihood of success in this endeavor cannot be predicted at this time, particularly due to the Company’s troubled condition.

Absent securing some form of additional capital, the only other source of additional liquidity available to Corus is income earned on its cash held on deposit at the Bank.

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Corus Bank, N.A.

At March 31, 2009, Corus Bank, N.A. (the “Bank”), a wholly-owned subsidiary of Corus Bankshares, Inc., (the “holding company”), had liquid assets totaling $3.1 billion, or 40% of its total assets versus $4.4 billion, or 49% of total assets at March 31, 2008. The $3.1 billion in liquid assets includes cash of $55 million, time deposits with banks of $828 million, $200 million of interest bearing deposits with the Federal Reserve, and readily salable marketable securities of $2.0 billion. In addition to proceeds from sales or maturities of time deposits and securities, the Bank’s sources of cash include loan paydowns/payoffs and new customer deposits. Approximately $550 million of the Bank’s liquid assets were pledged as collateral to the Federal Reserve Bank.

As of March 31, 2009, the Bank had loans outstanding, net of the allowance for loan losses, of $3.8 billion. The portfolio consists almost exclusively of commercial real estate loans, primarily to condominium developers. The condominium loans typically require payment of principal either upon sale of individual units or at loan maturity. As presented in the Loan Portfolio section of this report, paydowns/payoffs have slowed recently as a result of the sagging market for residential housing in the U.S. Paydowns and payoffs totaled $141 million during the first three months of 2009, which is significantly less than the 2008 quarterly average of just over $500 million. We believe that this downward trend will continue if market conditions do not improve or worsen.

The other primary source of liquidity is from new deposits. However, our ability to attract new deposits and retain existing deposits may have been hampered by the restrictions now applicable to the Bank with respect to its ability to offer depositors above average interest rates. As emphasized in the Order issued by the OCC on February 18, 2009, the Bank must comply with federal statutory and regulatory restrictions on the interest rates the Bank may offer to its depositors. Under these restrictions, the Bank cannot pay interest rates higher than 75 basis points above the national average rates for each deposit type. This restriction is potentially significant to the Bank due to its historical practice of paying above average rates both locally and nationally.

As background, the Chicago banking market is extremely fragmented (over 140 banks and thrifts) and competitive. As Corus’ needs for additional funding grew over the years, the Bank explored several different deposit gathering strategies, including building new branches and acquiring brokered certificates of deposit. Corus concluded that building new branches was expensive and its success uncertain. It was also a strategy that was already being pursued by numerous Chicago-area banks. Brokered deposits were not attractive since they were less likely to be available in a time of crisis. As an alternative, Corus decided that offering above average rates nationally, promoted via the internet, was the most efficient and cost effective strategy for the Bank. The strategy was scalable so deposits could be added or reduced based on the loan funding needs of the Bank and it was cost effective since the Bank would not be saddled with the overhead of a large branch network when loan volume declined.

This strategy makes Corus particularly vulnerable to a restriction on the level of interest rates it offers. Management believes Corus’ ability to attract deposits is a function of its ability to continue to offer rates above the national average. To the extent that Corus is restricted from offering high deposit interest rates, liquidity may be negatively impacted, possibly materially.

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The current FDIC rules on interest rate restrictions establish that the Bank may not offer interest rates higher than 75 basis points above the rates of interest on deposits offered in the Bank’s normal market area. Corus submitted a plan to the FDIC that presented the Bank’s normal market area as the national market. The FDIC approved our national market designation and our use of the Bankrate.com average national rate table to determine the base rate. Corus began to offer deposit products using these rate limitations on January 24, 2009. From January 24, 2009 through March 31, 2009, Corus experienced deposit run-off of $323 million. However, it should be noted that part of the Bank’s strategy, as noted above, involved shrinking deposits as loan demand declined. For example, our unfunded loan commitments shrank by $322 million during the same period.

On January 27, 2009, a new rule was proposed by the FDIC that would amend its existing rules which impose interest rate restrictions on deposits that can be paid by depository institutions that are not “well-capitalized.” Under this new rule, affected depository institutions would be allowed to pay a “national rate” plus 75 basis points, and the FDIC would set and publish the national rate. To compute the national rate, the FDIC would use all the data that was available from approximately 8,300 banks and thrifts (and their branches) to determine a national average rate for each deposit product. Banks that are not well-capitalized would then be limited to paying 75 basis points over the national average rates set by the FDIC for each deposit product.

We do not know whether there will be changes to the proposed rule or whether it will be adopted at all, or what impact the final rule will have on Corus. However, the Bank has historically paid above average rates locally and nationally, and as a result, the restrictions on interest rates could cause a decrease in both new and existing deposits, which would adversely impact our business, financial condition, and results of operations.

In addition to the impact of interest rate restrictions, the Bank also faces the potentially negative impact of reputation risk. While insurance provided by the FDIC may negate this risk to borrowers who maintain balances at or below insurable amounts, it is uncertain to what extent the Bank will be able to maintain existing or attract new deposits due to negative publicity.

To address our ongoing liquidity concerns, the Bank has developed a Contingency Funding Plan (“CFP”). The intention of the CFP is to identify scenarios that may indicate possible funding problems leading to liquidity issues and have a response plan in place to minimize the risk of such liquidity issues. The CFP is intended to help Bank management anticipate and, to the extent possible, plan for a severe liquidity event. It identifies scenarios that are outside of “normal” conditions such as market-wide disruptions in the credit and/or capital markets or Bank specific situations that could affect the Bank’s ability to meet its day-to-day liquidity needs.

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USES

Corus (Holding Company)

While the holding company did not make any infusion into the Bank during the three months ended March 31, 2009, historically, one of the holding company’s primary uses of cash was capital infusions into the Bank. While such infusions were made to increase Bank capital such that the Bank could make larger loans, more recently infusions were made in an effort to strengthen the Bank after recent losses incurred during the second and third quarters of 2008. With only $53 million of cash and marketable equity securities remaining at March 31, 2009, the holding company’s ability to continue such capital infusions is limited (see discussion regarding Sources above).

Additional uses of holding company funds have also included dividends to shareholders, interest and principal payments on debt, share repurchases, the purchase of marketable securities, and the payment of operating expenses. While in 2008 Corus voluntarily eliminated its quarterly dividend and, under the terms of the Trust Preferred Securities, deferred all interest payments related to the Trust Preferred Securities, under the Agreement with FRB, any use of funds are now subject to FRB approval.

Finally, as of March 31, 2009, the holding company has two outstanding loan commitments related to loans originated by the Bank. Commitments under the loans total approximately $25 million. The loans are participations of Bank loans and fund on a last-in-first-out basis, meaning that the Bank would have to fund its entire commitment before the holding company funds anything. It is likely that the holding company will need to fund its commitment during the remainder of 2009.

Corus Bank, N.A.

The Bank’s historic principal uses of cash include loan funding (both new loans as well as drawdowns of unfunded loan commitments), depositor withdrawals and, to the extent applicable, dividends to the holding company (see section below entitled “Dividend Restrictions” for a further discussion). At March 31, 2009, the Bank had unfunded commercial real estate loan commitments of $1.2 billion. While there is no certainty as to the timing of drawdowns of these commitments, management anticipates the majority of the loan commitments will fund over the next 12 months.

The Bank must also retain sufficient funds to satisfy depositors’ withdrawal needs and cover operating expenses. Corus deposits are primarily from short-term certificates of deposit (“CDs”), virtually all with original maturities of one year or less, and money market accounts. These deposits present a potentially greater liquidity risk than would longer-term funding alternatives. The Bank must therefore be prepared to fund those withdrawals and, as such, internally allocates a substantial pool of its investment securities “against” deposits.

Finally, the Bank must have sufficient funds available to fund various operating expenses. Expenses associated with problem loans have increased during the first three months of 2009 as compared to the same period in 2008 and are expected to continue increasing. These costs include OREO property expenses, protective advances, legal, consulting, FDIC insurance costs, and others.

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REGULATORY CAPITAL AND RATIOS

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory—and possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on the Company’s and Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

As presented in Note 1 to the consolidated financial statements, on February 18, 2009, the Company announced that, in coordination with, and at the request of, both the FRB and the OCC, the Company and the Bank, respectively, have entered into the Agreement with the FRB and the Order with the OCC. While the Agreement requires Corus to develop a capital plan to address the Company’s and the Bank’s capital requirements, it did not contain any changes with respect to the minimum capital ratios required for the Company. The Order, however, increases significantly the minimum capital ratios for the Bank to achieve and maintain by June 18, 2009. Under the Order, the minimum capital ratios are as follows: Tier 1 Leverage was increased to 9% and Tier 1 Risk-Based was increased to 12%. There was no change to the Total Risk-Based ratio, but, by definition it cannot be lower than the Tier 1 Risk-Based ratio of 12%.

As of May 1, 2009, based on its March 31, 2009 Call Report, the Bank was not in compliance with the previous minimum capital ratios and was classified as “undercapitalized” under the OCC’s Prompt Corrective Action rules. The OCC may require an undercapitalized bank to comply with certain mandatory or discretionary supervisory actions as if the bank were in the next lower capital category. Future noncompliance with regulatory capital requirements raises substantial doubt about the Bank’s ability to stay solvent and the Company’s ability to continue as a going concern. In addition, the OCC could issue a Prompt Corrective Action directive or take other regulatory action, which could result in the Bank being placed into conservatorship or receivership and as a result could also cause the Company to be unable to continue as a going concern.

At this point in the housing cycle, we are experiencing significant loan quality issues. The impact of the current financial crisis in the U.S. and abroad is having far-reaching consequences and it is difficult to say at this point when the economy will begin to recover. As a result, we cannot assure you that we will be able to resume profitable operations in the near future, or at all.

We have determined that significant additional sources of capital will be required for us to continue operations through 2009 and beyond. The Company’s Board of Directors has formed a Strategic Planning Committee. The Strategic Planning Committee has hired an investment banking firm to seek all strategic alternatives to enhance the stability of the Company including a capital investment, sale, strategic merger or some form of restructuring, however, there can be no assurance that the Company will succeed in this endeavor and be able to comply with the new regulatory requirements. If the Company does not comply with the new capital requirements contained in the Order, the regulators may take additional enforcement action against the holding company and the Bank.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of total and Tier 1 capital (as defined in the regulations) to risk-adjusted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). The Company and the Bank did not meet the applicable capital adequacy requirements as of March 31, 2009.

As of March 31, 2009, the Bank was “undercapitalized” under the regulatory framework for prompt corrective action.

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Concentrations in Commercial Real Estate Lending

In December 2006, the OCC, together with the Board of Governors of the Federal Reserve System and the Federal Insurance Corporation (the “Agencies”), issued guidance entitled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices” (the “Guidance”). The Guidance indicates it is intended to “reinforce and enhance the Agencies’ existing regulations and guidelines for real estate lending” and, to “remind institutions that strong risk management practices and appropriate levels of capital are important elements of a sound Commercial Real Estate (“CRE”) lending program, particularly when an institution has a concentration in CRE loans.” Importantly, the Guidance states that it, “...does not establish specific CRE lending limits; rather, it promotes sound risk management practices and appropriate levels of capital that will enable institutions to continue to pursue CRE lending in a safe and sound manner.”

While the Guidance states that it, “...does not define a CRE concentration,” it does outline ‘supervisory monitoring criteria’ that, “...the Agencies will use as high-level indicators to identify institutions potentially exposed to CRE concentration risk.” Those criteria are: “(1) Total loans for construction, land development, and other land representing 100 percent or more of the institution’s total capital, or (2) Total commercial real estate loans representing 300% or more of the institution’s total capital, and the outstanding balance of the institution’s commercial real estate portfolio increasing by 50% or more during the prior 36 months.”

As of March 31, 2009, the Bank had balances outstanding for construction, land development, and other land-secured loans totaling $3.7 billion, which represented 878% of the Bank’s total capital. The Bank’s capital is essentially equal to its shareholder equity plus loan loss reserves. Also as of March 31, 2009, the Bank had commercial real estate loan balances outstanding totaling $4.1 billion, which represented 994% of the Bank’s total capital. As a result, the Bank’s ratios were both significantly greater than the regulatory criteria as of March 31, 2009.

The Order issued by the OCC includes a requirement that the Bank “adopt, implement and thereafter ensure Bank adherence to” a revised written commercial real estate (“CRE”) concentration management program (the “Program”) designed to manage the risk in the Bank’s CRE portfolio in accordance with regulatory guidelines. While Corus intends to comply with the OCC’s request, if and when the Bank resumes commercial lending, we will not be able to change the Bank’s commercial real estate concentration until such time as we originate new loans outside of the commercial real estate sector.

Dividend Restrictions

The Agreement entered into with the FRB prohibits the payment of any dividends, by either the Bank or the holding company, without FRB approval. The payment of dividends by the Bank is further restricted by various other federal regulatory limitations. Among those restrictions, a national bank may not declare a dividend if the total amount of all dividends declared (including any proposed dividend) by the national bank in any calendar year exceeds the total of the national bank’s retained net income of that year to date, combined with its retained net income of the preceding two years. Based on these constraints, the Bank was not permitted to distribute any amount to the Company at March 31, 2009.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

CRITICAL ACCOUNTING POLICIES

The Company’s significant accounting policies are fundamental to understanding the results of operations and financial condition, because some accounting policies require that management use estimates and assumptions that may affect the value of the assets or liabilities and financial results. Management considers four of these policies to be particularly critical because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts could be reported under different conditions or using different assumptions.

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses (the “Allowance”) is comprised of the Allowance for Loan Losses and a separate Liability for Credit Commitment Losses. The Allowance for Loan Losses is a reserve against funded loan amounts, while the Liability for Credit Commitment Losses is a reserve against unfunded commitments. The Allowance is available to absorb losses inherent in the loan portfolio. Increases to the Allowance result from provisions for credit losses that are charged to earnings and from recoveries of previously charged-off amounts. Decreases to the Allowance result as loans, or portions thereof, are charged off. In general, the Bank will maintain specific reserves for losses that are unconfirmed and record charge-offs for losses that become confirmed (generally when foreclosure is expected or the borrower stops supporting the loan).

The Allowance for Loan Losses is based upon quarterly analyses. Corus’ methodology for calculating the Allowance for Loan Losses is designed to first provide for specific reserves associated with “impaired” loans, defined by Generally Accepted Accounting Principles as loans where “it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement.” Management’s determination as to which loans to specifically review for impairment is based on loan ratings as determined by management, in accordance with the regulatory standards of the Office of the Comptroller of the Currency (the “OCC”). Impairment testing was completed for all loans with the following characteristics: (1) loans which are rated Substandard, Doubtful, or Loss (regulatory classifications or definitions); (2) loans which are on nonaccrual status; (3) loans which are 90 days or more past due; and (4) loans determined to be a “Troubled Debt Restructuring.” In addition, for purposes of determining the appropriate Allowance at March 31, 2009, management applied additional procedures to identify impaired loans. These additional procedures included specifically reviewing all commercial real estate loans regardless of regulatory rating, excluding loans with balances less than $1 million (less than 1% of loan portfolio). Loans determined to be impaired were segregated from the remainder of the portfolio and were subjected to a specific review in an effort to determine whether or not a specific reserve was necessary and, if so, the appropriate amount of that reserve.

The remainder of the portfolio is then segmented into groups based on loan characteristics, seniority of collateral, and loan rating. A reserve is calculated and allocated to each of these groups based on historical net charge-off history coupled with a subjective management adjustment factor, if management believes the historical net charge-off data is not representative of current market conditions. If utilized, the management adjustment factor is intended to incorporate those qualitative or environmental factors that are likely to cause estimated credit losses associated with the Bank’s existing portfolio to differ from historical loss experience.

The Company also maintains an unallocated reserve in its Allowance account. If utilized, the unallocated portion represents a reserve against risks associated with environmental factors that may cause losses in the portfolio as a whole but are difficult to attribute to individual impaired loans or to specific groups of loans.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

The process for estimating the Liability for Credit Commitment Losses closely follows the process outlined above for the Allowance for Loan Losses. Specific reserves are typically not applicable to unfunded amounts since any specific reserve would first be applied to the funded balance. General reserves are based on the same loss factors used for the Allowance for Loan Losses.

OTHER REAL ESTATE OWNED

Statements of Financial Accounting Standards (“SFAS”) No. 15, 114 and 144 provide the general guidance for the initial recording of OREO. SFAS No. 34 and 67 provide guidance on the accounting for costs associated with OREO (holding costs, construction costs etc.). Sales of OREO are accounted for in accordance with SFAS No. 66, while impairments are accounted for in accordance with SFAS No.144.

OREO typically results from the Company assuming the ownership of property collateralizing a loan. Depending on the loan, the property received may be in full or partial satisfaction of monies owed to the Bank.

These properties are recorded at the lower of cost or estimated realizable value at the date of foreclosure, thus establishing a new cost basis. After foreclosure, valuations are performed at least quarterly by management. When performing an internal evaluation of the properties, the Bulk Sale Discount Model is used. This model uses an approach that mirrors the analysis that would be performed by a third party appraiser. It uses a cash flow approach using the net present value of cash flows using an appropriate discount rate. Assumptions in the model are reviewed by the Commercial Loan Officers along with the Chief Lending Officer and adjusted as dictated by changing circumstances.

Subsequent decreases in value are reported as adjustments to the carrying amount and are included as a component of noninterest expense. Significant property improvements may be capitalized to the extent that the carrying value does not exceed the estimated realizable value. Disposal of an OREO asset may be achieved through the sale of the property as a whole to a bulk purchaser or via the sale of individual units. Adjusted cost basis is used to determine gains or losses on individual unit sales.

Gains or losses from the sale of OREO, as well as rental income and expenses from operations are included in noninterest expense.

FAIR VALUE MEASUREMENTS

Corus uses fair value measurements to record fair value adjustments to certain financial assets and to determine fair value disclosures. Available-for-sale securities and interest rate swap agreements are financial instruments recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record at fair value other financial assets on a nonrecurring basis, such as loans. These nonrecurring fair value adjustments typically involve write-downs of, or specific reserves against, individual assets. Information about the extent to which fair value is used to measure assets and liabilities, the valuation methodologies used and its impact to earnings is included in the notes to consolidated financial statements.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

The Company adopted Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Under SFAS 157, fair value measurements are not adjusted for transaction costs. SFAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under SFAS 157 are described below:

Level 1 — Valuation is based upon quoted prices for identical instruments traded in active markets. An active market is one in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever possible;

Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuation techniques for which all significant assumptions are observable or can be corroborated by data in the market;

Level 3 — Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques primarily include the use of discounted cash flow models.

In accordance with SFAS 157, it is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. When available, we use quoted market prices to measure fair value. If market prices are not available, fair value measurement is based upon models that use primarily market-based or independently-sourced market parameters, including interest rate yield curves. All of our recurring financial instruments use either Level 1 or Level 2 measurements to determine fair value adjustments recorded to our financial statements.

The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market parameters. For financial instruments that trade actively and have quoted market prices or observable market parameters, there is minimal subjectivity involved in measuring fair value. When observable market prices and parameters are not fully available, management judgment is necessary to estimate fair value (impaired loans). In addition, changes in the market conditions may reduce the availability of quoted prices or observable data. For example, reduced liquidity in the capital markets or changes in secondary market activities could result in observable market inputs becoming unavailable. Therefore, when market data is not available, we use valuation techniques that require more management judgment to estimate the appropriate fair value measurement.

At March 31, 2009, approximately 26% of total assets, or $2.0 billion, consisted of financial assets recorded at fair value on a recurring basis. All of these financial instruments used valuation methodologies involving market-based or market-derived information, collectively Level 1 and 2 measurements, to measure fair value. At March 31, 2009, approximately 18% of total assets, or $1.4 billion (excluding costs to sell of $47 million), were recorded at fair value on a nonrecurring basis, all of which were impaired loans measured using appraisals or internally-developed models, both having significant unobservable inputs, or Level 3 measurements.

See Note 12 to the consolidated financial statements for a complete discussion on our use of fair valuation of financial assets and liabilities and the related measurement techniques.

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CORUS BANKSHARES, INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations — continued

DEFERRED TAX ASSET VALUATION ALLOWANCE

It is common for companies to record expenses and accruals before the related payments are actually made. In the U.S., many deductions for tax return purposes cannot be taken until the expenses are paid. Similarly, some tax credits and net operating losses cannot be used until future periods when sufficient taxable income is generated. In these circumstances, under GAAP, companies accrue for the tax benefit expected to be received in future years if, in the judgment of management, it is “more likely than not” that the company will receive the tax benefits. These benefits (deferred tax assets) are often offset, in whole or in part, by the effects of deferred tax liabilities which relate primarily to income reported under GAAP prior to becoming taxable under existing tax laws and regulations.

The Company has $11.3 million of deferred tax assets which relate to expected future tax deductions arising primarily from the allowance for credit losses. For more details, see Note 11 to the accompanying consolidated financial statements.

Since there is no absolute assurance that these assets will be ultimately realized, management reviews the Company’s net deferred tax position to determine if it is more likely than not that the assets will be realized. Reviews include, among other things, the nature and amount of historical and projected future taxable income. Management also considers tax-planning strategies it can use to increase the likelihood that the tax assets will be realized. If after conducting the review, management determines that the realization of the tax asset does not meet the “more-likely-than-not” criteria, an offsetting valuation allowance is recorded thereby reducing net earnings and the deferred tax asset in that period. For these reasons and since changes in estimates can materially affect net earnings, management believes the accounting estimate related to deferred tax asset valuation allowances is a “critical accounting estimate.”

Among other things, should tax statutes, the timing of deductibility of expenses or expectations for future performance change, the Company could decide to adjust its valuation allowances, which would increase or decrease tax expense, possibly materially. However, future changes in the valuation allowance will not have a material effect on the Company’s liquidity or compliance with any debt covenants.

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FORWARD-LOOKING STATEMENTS

This filing contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by, among other things, the use of forward-looking terms such as “likely,” “typically,” “may,” “intends,” “expects,” “believes,” “anticipates,” “estimates,” “projects,” “targets,” “forecasts,” “seeks,” “potential,” “hopeful,” or “attempts” or the negative of such terms or other variations on such terms or comparable terminology. By their nature, these statements are subject to risks, uncertainties and other factors, which could cause actual future results to differ materially from those results expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, the following:

• The risk that Corus will not be able to adequately address its current severe liquidity issues. Corus is no longer originating new loans, and so must rely on payments from existing loans, an increasing number of which are non-performing or are in danger of becoming non-performing loans. Corus is unable to raise capital by issuing Trust Preferred Securities or other similar instruments, may be restricted in the amount of interest it can pay on bank deposits, which would likely limit the amount of new deposits it can attract, and is unlikely to receive money through the TARP program. All of these factors, as well as the ones discussed elsewhere in this Quarterly Report, could impact Corus’ ability to continue as a going concern;

• The risk that Corus will not be able to develop and implement a capital plan that satisfies its obligations under the Written Agreement with the Federal Reserve Bank and the Consent Order with the OCC, or an acceptable capital restoration plan under the OCC’s Prompt Corrective Action regime, and the risk that Corus will not otherwise be able to comply with such commitments and regulations. The OCC could force a sale, liquidation or federal conservatorship or receivership of the Bank;

• The risk that Corus will not be able to satisfy the standards necessary to be considered “well capitalized” under the elevated standards contained in the Consent Order. The failure to do so would, among other things, restrict the amount of interest that the Bank can charge its customers;

• The risk that the current crisis in the U.S. residential housing and mortgage market does not improve or deepens before there is a meaningful recovery. The severe distress in the housing market is having numerous adverse effects on Corus, including decreased loan originations, decreased earnings, and deteriorating credit quality trends (as reflected in nonaccrual loans, charge-offs and loan loss provisions), among other issues. Additional risks associated with the housing crisis relate to potentially weak sales of condominium units and/or cancellations of condominium “presale” contracts, and the adverse impact these events could have on loan paydowns and collateral valuations;

• The risk that Corus will be unable to attract and retain qualified personnel to replace the members of our management who recently left, particularly Robert J. Glickman;

• The risk that continued negative publicity regarding our financial position will have an adverse effect on our operations;

• The risk that borrowers will not be able to complete the construction of projects in a timely fashion and/or within budget and, along interrelated lines, the risk that guarantors will not be able to honor their guarantees in a material fashion, including their completion guarantees (related to halted projects, cost overruns on projects, etc.);

• The risk that interest rates could increase and the negative impact such a shift could have on housing demand and/or values and on our borrowers’ ability to support the higher interest rate “carry costs” on our loans, the vast majority of which bear interest at floating rates;

• The ability and willingness of borrowers or third-party mezzanine lenders to support underperforming projects and/or Corus’ loans secured by those projects;

• The risk that management’s estimate of the adequacy of the allowance for credit losses could be incorrect;

• The risk that management’s estimate of fair value is incorrect as a result of minimal activity in the market in which the asset is bought and sold;

• The risk that Corus will not effectively manage Other Real Estate Owned properties such that current valuations will not be realized;

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• Risks resulting from Corus’ numerous areas of concentration, including those relative to its lending business. Corus’ loan portfolio is concentrated in numerous respects, among them, commercial real estate loans which tend to be very large and with a primary focus on financing residential condominium construction projects (with the projects themselves being relatively geographically concentrated);

• The risk that Corus will be unable to attract and retain deposits at pricing that is cost-effective, particularly in light of the fact that Corus would be restricted as to the amount of interest it could pay on deposits if it is unable to remain well-capitalized;

• The risk that deposit insurance costs could increase as a result of the FDIC’s need to fortify the insurance fund;

• The risk that deposit customers withdraw funds in spite of the increased insurance levels;

• The risk that the currently unusually wide market spreads on Corus’ deposits decline less than and/or later than the market spreads on Corus’ loans and investments;

• The difficulty of projecting future loan commitments and balances as a result of the complex interplay of construction loan funding and loan payoffs/paydowns;

• The risk that Corus’ loan portfolio will not generate the liquidity needed to fund outstanding construction commitments;

• The risk that management’s estimates of future taxable income or loss could change such that estimates of deferred tax asset valuation allowances could increase or decrease materially;

• The occurrence of one or more catastrophic events that may directly or indirectly affect properties securing Corus’ loans, including, but not limited to, earthquakes, hurricanes, and acts of terrorism;

• The risk that the issuers of some of the Bank’s investments, including its holdings of the short-term debt issued by several Government Sponsored Enterprises and certificates of deposit issued by various U.S. banks, could experience credit problems, and the negative financial implications this could have on Corus’ results;

• The risk that regulatory agencies that have authority over the Company or its subsidiaries may impose restrictions on the Company or its subsidiaries; and

• Changes in the accounting policies, laws, regulations, and policies governing financial services companies.

Do not unduly rely on forward-looking statements. They give Corus’ expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and, except as required by law, Corus does not intend to update them to reflect changes that occur after that date. For a discussion of factors that may cause actual results to differ from expectations, refer to Part I Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2008 and Part II Item 1A of this report. Any factor described in this filing or in any document referred to in this filing could, by itself or together with one or more other factors, adversely affect the Company’s business, earnings and/or financial condition.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company believes that there has been no material change in the quantitative and qualitative market risks from those discussed in the 2008 Form 10-K. See “Part II, Item 1A—Risk Factors” for risk factors relating to disruptions in the financial markets.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management has evaluated, with the participation of the principal executive officer and principal financial officer, the Company’s disclosure controls and procedures (as such term is defined in Rule 13a — 15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on that evaluation, the principal executive officer and principal financial officer have concluded that these controls and procedures were effective as of such date. There were no changes in internal control over financial reporting (as such term is defined in Rule 13a — 15(f) under the Securities Exchange Act of 1934) that occurred during the first quarter of 2009 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

During the first quarter of 2009, Corus and Mr. Robert J. Glickman, the Company’s former Chief Executive Officer, were named as defendants in a purported class action lawsuit filed in the U.S. District Court for the Northern District of Illinois alleging violations of federal securities laws. In April 2009, a second purported securities class action lawsuit was filed in the Northern District of Illinois against Corus and Mr. Glickman and adding as additional defendants Tim H. Taylor and Michael E. Dulberg. Later in April 2009, two additional securities class actions were filed in the Northern District of Illinois against Corus and Messrs. Glickman, Taylor, and Dulberg. One of the two most recent lawsuits also added as additional defendants members of the Company’s Board of Directors, specifically Messrs. Joseph P. Glickman, Robert J. Buford, Kevin R. Callahan, Rodney D. Lubeznik, Michael J. McClure, and Peter C. Roberts. These lawsuits, brought on behalf of shareholders who purchased the Company’s common stock between January 25, 2008 and January 30, 2009, allege primarily that the defendants violated the federal securities laws by disseminating materially false and misleading statements during the above-described period. The lawsuits seek unspecified damages.

Corus and the individual defendants filed an unopposed motion to reassign the related, second-filed case to the judge assigned to the first-filed lawsuit, and that motion has been granted. Corus expects that the third-filed and fourth-filed cases will also be reassigned to this judge. Once all related cases are before the same judge, a lead plaintiff and counsel will be selected for these lawsuits and an amended complaint is then likely to be filed combining all four lawsuits. Defendants will have 45 days after the amended complaint is filed to answer or move to dismiss the complaint.

Because these lawsuits were recently filed and there are significant uncertainties involved in any potential class action litigation, management is unable to predict the outcome of the purported class action lawsuits and therefore cannot currently reasonably determine the estimated future impact on the financial condition or results of operations of the Company. Corus and the individuals named intend to vigorously defend these lawsuits.

Corus is involved in various legal proceedings involving matters that arise in the ordinary course of business. The consequences of these proceedings are not presently determinable but, in the opinion of management, these proceedings will not have a material effect on the results of operations, financial position, liquidity or capital resources.

ITEM 1A. RISK FACTORS

Our operations involve various risks that could adversely affect its financial condition, results of operations, liquidity, and the market price of its common stock. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

RISKS RELATED TO OUR CURRENT FINANCIAL POSITION

There is substantial doubt about our ability to continue as a going concern.

In its report dated April 6, 2009, our independent registered public accounting firm stated that our net losses raise substantial doubts about our ability to continue as a going concern. Our ability to continue as a going concern is in doubt as a result of the continued deterioration of our loan portfolio and is subject to our ability to service our existing loans in a manner that will return the Company to profitability or, in the alternative, identify and consummate a strategic transaction, including the potential sale of the Company. In addition, our Chief Executive Officer, Robert J. Glickman, resigned on April 24, 2009. See “Our CEO has resigned, and we currently do not have a permanent CEO or active CFO. This lack of senior leadership raises serious doubts about ability to continue to run our business effectively” below.

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On February 18, 2009, we announced that our Board of Directors is actively considering strategic alternatives, including a capital infusion or a merger. We can give no assurance that we will identify an alternative that allows our stockholders to realize an increase in the value of the Company’s stock. We also can give no assurance that a transaction or other strategic alternative, once identified, evaluated and consummated, will provide greater value to our stockholders than that reflected in the current stock price. In addition, a transaction, which would likely involve equity financing, would result in substantial dilution to our current stockholders and could adversely affect the price of our common stock. If we are unable to return to profitability and if we are unable to identify and execute a viable strategic alternative, we may be unable to continue as a going concern.

The Bank may be subject to a federal conservatorship or receivership if it cannot comply with the OCC Order, the Prompt Corrective Action requirements, or if its condition continues to deteriorate.

As noted above, the OCC Order requires the Bank to create and implement a capital plan, including provisions for contingency funding arrangements. In addition, the Bank has received formal notification under the OCC’s Prompt Corrective Action regime that it is undercapitalized and, therefore, subject to additional restrictions and requirements, including submission to the OCC of an acceptable capital restoration plan. As discussed above, the OCC is not permitted to accept a capital restoration plan that lacks an adequate guarantee and assurance of the Bank’s performance from the Company. The Bank is developing a capital restoration plan but no assurances can be provided that it will be able to submit an acceptable plan, including the required Company guarantee. Failure of the Bank to submit an acceptable capital restoration plan would, among other things, result in the Bank becoming subject to a number of additional restrictions on its operations, and the Bank and the Company may be subject to additional regulatory action. See “Prompt Corrective Action Notification” above. Moreover, the condition of the Bank’s loan portfolio may continue to deteriorate in the current economic environment and thus continue to deplete the Bank’s capital and other financial resources. Therefore, should the Bank fail to submit an acceptable capital restoration plan and comply with its terms, or fail to comply with the Order’s capital and liquidity funding requirements, or suffer a continued deterioration in its financial condition, the Bank may be subject to being placed into a federal conservatorship or receivership by the OCC, with the FDIC appointed as conservator or receiver. If these events occur, Corus probably would suffer a complete loss of the value of our ownership interest in the Bank, and we subsequently may be exposed to significant claims by the FDIC and the OCC.

The continued deterioration of the housing market and the economy has adversely affected our business, liquidity and financial results, and if the downturn continues or worsens our ability to continue as a going concern could be adversely affected.

Our loan portfolio is concentrated in loans secured by condominium and condominium conversion projects. As a result, the significant downturn in the housing market has had a substantial negative effect on our business and has contributed to increased levels of delinquent and non-reporting assets, charge-offs and credit loss reserves. We reported a net loss of $285.0 million for the three months ended March 31, 2009, compared to net income of $4.5 million for the three months ended March 31, 2008 and a net loss of $456.5 million for the year ended December 31, 2008, compared to net income of $106.2 million for the year ended December 31, 2007. These events, if they continue or worsen, will have a material adverse effect on our business, financial condition and results of operation and also may impact our ability to continue as a going concern.

We may be subjected to negative publicity that may adversely affect our business, financial condition, liquidity and results of operations.

We have recently been the subject of news reports discussing our current financial situation and the resignation of our CEO, Robert J. Glickman, and we may continue to be subject to negative publicity as the press and others speculate about whether we will be able to continue as a going concern. These reports may have a negative impact on our business. For example, even though our deposits are insured by the FDIC, customers may choose to withdraw their deposits, and new customers may choose to do business elsewhere. In addition, we may find that our service providers will be reluctant to commit to long-term projects with us. Even if we are able to improve our current financial situation, we may continue to be the object of negative publicity and speculation about our future.

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Our decision to defer interest on our Trust Preferred Securities will likely restrict our access to the debt capital markets until such time as we are current on our interest payments, which will further limit our sources of liquidity.

During 2008, our Board of Directors elected to defer further interest payments on each of our junior subordinated debt securities relating to the Trust Preferred Securities. As a result, it is likely that we will not be able to raise money through the offering of debt securities until we become current on those obligations. This may also adversely affect our ability to obtain debt financing on commercially reasonable terms, or at all. As a result, we will likely have greater difficulty in obtaining financing and, thus, will have fewer sources to enhance our capital and liquidity position.

We have become subject to restrictions on the amount of interest that we can pay our customers, which could cause our deposits to decrease. Because we depend on deposits as a source of liquidity, a decrease in deposits would adversely affect our ability to continue as a going concern.

Virtually all of our funding comes from traditional deposit products. The Bank promotes selected deposit accounts to both individuals and businesses at competitive rates. By marketing its deposit products nationally, the Bank is able to attract deposits without being limited to competing solely in the very competitive Chicago market. The Bank competes for customer deposits largely on the basis of the interest rates that it pays out. Under the Order, the Bank is restricted in the amount of interest that it can pay out. As a result, we likely could experience a decrease in new deposits, and our existing customers may transfer their deposits to other institutions that are able to offer a higher interest rate, which could have a material adverse effect on our ability to continue as a going concern.

The Regulatory Agreements generally prohibit Corus and the Bank from paying any dividends or distributions on our respective equity securities.

Under the terms of the Agreement, the Company cannot pay any dividends or make any distributions on its equity or trust preferred securities without prior written FRB approval. In addition, under the terms of the Order and in connection with its undercapitalized status under the Prompt Corrective Action statute, the Bank cannot pay any dividends or make any distributions on its equity securities without, among other things, prior written OCC approval. Given the Company’s and the Bank’s current condition, it is doubtful that either the FRB or the OCC would approve any dividend payment or capital distribution at this time. Accordingly, for at least the time being, the Company probably will not be able to look to the Bank’s financial resources to satisfy its own financial obligations.

RISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY

Our CEO has resigned, and we currently do not have a permanent CEO or active CFO. This lack of senior leadership raises serious doubts about ability to continue to run our business effectively.

Robert J. Glickman, our Chief Executive Officer, resigned on April 24, 2009, and while we have appointed an interim Chief Executive Officer, the Company currently does not have a permanent Chief Executive Officer or an active Chief Financial Officer. As we have previously disclosed, in October 2008 the Company’s then Chief Financial Officer and the Executive Vice President of Commercial Lending resigned, and while we appointed a new Chief Financial Officer, he is not currently functioning in that role. Accordingly, we have several crucial roles that are not currently being filled, and because of our financial condition we may not be able to find suitable individuals to fill these roles. Because competition for skilled employees is intense, and the process of finding qualified individuals can be lengthy and expensive, we believe that the loss of the services of key personnel will adversely affect our financial condition and results of operations.

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Continued deteriorating conditions in the housing market may lead to increased losses on loans.

The effects of the current economic environment are being felt across many industries, and the housing market has been substantially affected, resulting in longer marketing periods for homes, growing inventories of unsold homes, and increased foreclosure rates. As a result, property values have declined substantially. If economic conditions in the residential real estate sector continue to deteriorate, we will likely see a material increase in problem loans. This risk includes both a shortage of buyers and an increase in cancelled contracts. We have already classified a number of loans as problem loans, and if the housing market does not improve substantially or worsens, we will likely experience increased losses on our loans.

The risk of cancelled contracts is particularly important in the Florida market, which is known as a “pre-sale” market. One of the main factors in our underwriting in this market was the existence and the strength of pre-sale contracts. Generally, the sales contracts in Florida required a non-refundable earnest money deposit of 20% of the purchase price. If a condominium buyer does not close on a unit, the buyer must generally forfeit the deposit. Nevertheless, if these “pre-sale” buyers were to cancel contracts at a material rate, the risk related to our construction loans would increase significantly.

Our focus on condominium lending and geographic concentration has adversely affected and could continue to adversely affect our operations.

We have a lending concentration in multi-family properties involving the construction of new condominiums and the conversion of existing apartments into condominium buildings. At March 31, 2009, approximately 75% of the total commercial real estate loan commitments were collateralized by condominium buildings. Additionally, while our loans are collateralized by properties across the United States, the geographic concentration of commercial real estate loans remains in various metropolitan areas, including Miami, Los Angeles, San Diego, the District of Columbia, Atlanta, Chicago, Las Vegas, and New York City, all of which have been hit particularly hard by the economic downturn. While we had recognized that a severe downturn in the real estate markets was possible, if not likely, and had attempted to position ourselves accordingly, the current housing calamity is even worse than the “severe downturn” for which we had planned.

The Regulatory Agreements impose significant restrictions on our operations, and the cost of compliance, as well as any possible failure to comply, could have a material adverse effect on our business, financial condition and results of operations.

The Regulatory Agreements contain a list of strict requirements ranging from a capital directive, which requires Corus and the Bank to achieve and maintain minimum regulatory capital levels (in the Bank’s case, in excess of the statutory minimums to be classified as well-capitalized) to developing a liquidity risk management and contingency funding plan, in connection with which the Bank will be subject to limitations on the maximum interest rates the Bank can pay on deposit accounts. The Regulatory Agreements also include several requirements related to loan administration as well as procedures for managing the Bank’s growing portfolio of foreclosed real estate assets.

Any material failure to comply with the provisions of the Regulatory Agreements could result in further enforcement actions by the OCC or the FRB. While we intend to take such actions as may be necessary to comply with the requirements of the Regulatory Agreements, we may be unable to comply fully with the provisions of the Regulatory Agreements, or our efforts to comply with the Regulatory Agreements, particularly the limitations on interest rates offered by the Bank, may have adverse effects on our operations and financial condition.

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We are unable to predict when, and to what extent, we will be able to originate new loans or offer new products.

Our future growth relies on our ability to identify and execute new, profitable loans. However, in light of the current market conditions, we have decided that we need to focus on servicing our existing portfolio and we are unsure when, and to what extent, we will begin to originate new loans or offer new products. Moreover, we will need prior regulatory approval to originate new commercial loans. If we are unable to originate new, profitable loans for an extended period, our financial condition and results of operations will continue to be adversely affected.

The guarantors of our loans may not be able to provide adequate support.

We routinely receive guarantees of completion and guarantees that address “bad acts.” If guarantors do not honor their guarantees in a material fashion, including their completion guarantees related to halted projects and/or cost overruns on projects, our financial condition and results of operations would be adversely affected. Moreover, in many of our problem loan situations, either the borrower or a mezzanine lender subordinate to us has supported the project/loan with substantial amounts of additional cash. However, since most of our loans are non-recourse upon project completion, past financial support is no guarantee of future support, particularly if the market weakens further or if the market stays at its currently depressed levels for an extended period of time. If this support diminishes materially, our financial condition and results of operations would be adversely affected.

Our investment portfolio consists of short-term, unsecured debt and is subject to credit risk.

Our investment portfolio consists primarily of short-term, unsecured debt issued by the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and the Federal Home Loan Bank System (the “FHLB”). These organizations are most commonly referred to as government-sponsored enterprises (“GSE”). Each of these organizations was chartered to facilitate home ownership in the United States.

Neither Fannie Mae nor Freddie Mac are backed or funded by the U.S. government, nor do the securities they issue benefit from any explicit government guarantee or protection. Likewise, FHLB debt does not carry any explicit government guarantee (although the debt issued by the FHLB is joint and several obligations of all 12 banks of the FHLB). We are subject to risk that the issuers of some of the Bank’s investments, including its holdings of the short-term debt issued by several GSEs and certificates of deposits issued by various U.S. banks, could experience credit problems, which would lower the value of these investments.

Our loan portfolio is subject to construction risk and market risk.

Problems which can arise in the financing of for-sale condominium housing can be broken down into three broad categories: (1) projects where construction is at risk of coming to a halt; (2) projects where there are material cost overruns that are not being covered by borrowers, completion guarantors or sponsors; and (3) projects where construction is complete, but either (a) sales are weak, and/or (b) presale buyers walk away from their contracts. Although we take steps to limit these risks, weakening economic conditions in the residential real estate sector, which may be caused by, among other things, supply/demand imbalances and higher interest rates, has increased, and may continue to increase, these risks, causing an increase in nonaccrual and otherwise nonperforming loans. An increase in nonaccrual and otherwise nonperforming loans results in a net loss of earnings from these loans, an increase in the provision for credit losses and an increase in loan charge-offs, all of which adversely affect our financial condition and results of operations. Other market risks include the occurrence of one or more catastrophic events, such as an earthquake, hurricane or act of terrorism, any of which could affect properties securing the loans.

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Tightening lending standards to home purchasers may indirectly adversely affect our results of operations.

We have a lending concentration in for-sale housing properties involving the construction of new condominiums and the conversion of existing apartments into condominium buildings. Since our customers are condominium developers who sell units to individuals, the tightening of lending standards to individual home purchasers have resulted in and may continue to result in fewer sales by developers which, in turn, would adversely affect our results of operations.

The slowdown in the residential real estate sector has led to and could continue to lead to foreclosures, which could adversely affect our results of operations.

The slowdown in the residential real estate sector has resulted in our reporting higher levels of problem loans. There can be no assurances that borrowers or subordinated lenders will agree to support problem loans. If they do not do so, we will be required to foreclose. For example, subsequent to March 31, 2009, we have foreclosed or are in the process of foreclosing on 12 loans. Although we believe that a foreclosure may preserve a significant amount of the value of a problem loan, this process could be expensive and could have an adverse effect on our results of operations.

Our Allowance for Credit Losses may prove to be insufficient to absorb potential losses in the loan portfolio.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make significant estimates that affect the financial statements. A critical estimate relates to the level of the Allowance for Credit Losses. Due to the uncertainties inherent in the estimation of the appropriate level of the Allowance for Credit Losses, we may sustain credit losses that are greater, perhaps significantly, than the provided allowance. For example, the Allowance for Credit Losses increased from $77.0 million to $304.9 million from December 31, 2007 to December 31, 2008. If we are required to increase the Allowance for Credit Losses in the future, this will have the effect of reducing earnings or increasing our losses.

The financial services industry is highly competitive.

We face significant competition in all of our business activities, including principally commercial real estate lending and deposit gathering. Competitors include other commercial banks, savings banks, credit unions, brokerage firms, finance companies, insurance companies and mutual funds. Some of these competitors may have substantially greater resources than us and may benefit from greater name recognition. The financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation. Competition depends on a number of factors, including:

• interest rates and points/fees charged on loans;

• interest rates paid on deposits;

• service charges;

• banking hours;

• locations including ATM access and;

• other service-related products.

Our failure to compete successfully could adversely affect our growth and profitability which, in turn, could have a material adverse effect on our financial condition and results of operations.

Our business is subject to interest rate risk and variations in market interest rates may negatively affect its financial performance.

Our income and cash flows depend to a great extent on the difference between the interest rates earned on interest-earning assets such as loans and investment securities and the interest rates paid on interest-bearing liabilities such as deposits and borrowing. These rates are highly sensitive to many factors that are beyond our control, including general economic conditions and the policies of various governmental and regulatory agencies. Fluctuations in interest rates may also affect the demand by customers for our products and services. Significant fluctuations in interest rates could have a material adverse effect on our business, financial condition, results of operations, or liquidity.

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The “market spreads” impacting our assets and liabilities may not fluctuate in sync with each other, which could negatively impact our earnings.

Interest earned on assets and paid on liabilities fluctuates, in part, based on spreads to benchmark rates as determined by the broader market. These spreads may or may not fluctuate in sync with each other. To the extent that spreads paid on deposits either increase in advance of, or decrease later than, the spreads on loans and deposits, our earnings may be negatively impacted. In addition, if the credit crisis results in a more or less permanent upward shift in the funding costs for banks (higher spreads), our earnings may be adversely affected.

The relative timing of asset and liability repricing may impact our earnings during periods of rapid increases or decreases in short-term interest rates.

A significant portion of our funding comes from Certificates of Deposit, the bulk of which have an original maturity of 6 or 12 months. In contrast, our investment portfolio and loans tend to have a shorter term and/or reprice more frequently. As a result, during times of rapidly changing short-term interest rates, our interest-bearing assets will, in the aggregate, reprice more rapidly than our interest-bearing liabilities. This can result in decreases in income during times of falling rates and increases in earnings during times of increasing rates.

We operate in a heavily regulated environment.

The banking industry is heavily regulated under federal and state banking laws and regulations that are intended primarily for the protection of depositors, the FDIC’s insurance fund and the banking system as a whole. The Company and the Bank are subject to regulation by the Federal Reserve Board, the FDIC, the OCC, and the SEC. Our business may be impacted not only by competitive factors but also by federal and state laws, regulations, and policies affecting banks and bank holding companies. These statutes, regulations and policies, or the interpretation or implementation of them, may change, and such changes may materially and adversely affect our business. In addition, federal banking regulators have broad authority to supervise the banking business of the Company and its subsidiary, including the authority to prohibit activities that represent unsafe or unsound banking practices or constitute violations of law, rule, regulation, or administrative order, or to place the Bank into conservatorship or receivership under certain circumstances. The exercise of such powers by federal banking regulators could have a material adverse effect on our business.

The USA Patriot and Bank Secrecy Acts could create liabilities for us.

The USA Patriot and Bank Secrecy Acts require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury Department’s Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines or sanctions. In recent years, several banking institutions have received large fines for non-compliance with these laws and regulations. Although we have developed policies and procedures intended to result in compliance, any noncompliance could negatively impact our results of operations.

Changes in accounting standards could impact reported earnings.

The accounting standard setters, including the Financial Accounting Standards Board, the SEC, and other regulatory bodies periodically change the financial accounting and reporting standards that govern the preparation of our consolidated financial statements. These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in the restatement of prior period financial statements.

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Income tax regulations are complex and subject to change.

We are subject to Federal and state income tax regulations. Income tax regulations are often complex and require interpretation. Changes in income tax laws or regulations could negatively impact our results of operations.

We may be unable to realize all or part of our deferred tax asset, which would negatively impact our net earnings or loss.

We calculate income taxes in accordance with SFAS 109, Accounting for Income Taxes, which generally requires us to determine whether it is more likely than not that our deferred tax asset balances will be recovered. At March 31, 2009, the net deferred tax asset after valuation allowance was $11.3 million. During the three months ended March 31, 2009, we recorded a valuation allowance of $104.6 million based principally on uncertainty about our ability to generate sufficient future taxable income to utilize this asset to offset future income tax liabilities. Realization of a deferred tax asset requires us to exercise significant judgment. If we determine that an additional valuation allowance for the deferred tax asset is necessary, we would be required to take an additional charge, which would lower our earnings or increase our net loss.

RISKS RELATED TO OUR COMMON STOCK

Ownership of our outstanding common shares is concentrated in the Glickman Family.

Approximately 43% of our outstanding common shares are owned by our former Chief Executive Officer, Robert J. Glickman, and his immediate and extended family (the “Glickman Family”). The Glickman Family’s interest in retaining their investment in the Company may have been highly dependent on Robert J. Glickman’s ability to continue his role as our Chief Executive Officer. As a result, Robert J. Glickman’s resignation as our Chief Executive Officer could have a material adverse effect on our business, financial condition, results of operation and ultimately the market price of our common stock.

In addition, the Glickman Family, acting together, has the ability to significantly influence the election and removal of our Board of Directors, as well as the outcome of any other matters to be decided by a vote of shareholders. This concentration of ownership could delay, prevent or result in a change in control of the Company, even when a change in control may or may not be perceived by some as being in the best interests of our shareholders.

The price for our common shares is volatile.

The market prices for our common shares and for securities of companies in the financial services industry have recently been highly volatile. Future announcements concerning us or our competitors may have a significant impact on the market price of our common shares. Factors which may affect the market price for our common shares, among others, include:

• actual or anticipated variations in our quarterly operating results;

• recommendations by securities analysts;

• operating and stock price performance of other companies that investors deem comparable to us;

• news reports relating to trends, concerns and other issues in the financial services industry and the housing market;

• changes in government regulations; and

• geopolitical conditions such as acts or threats of terrorism or military conflicts.

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General market fluctuations, industry factors and general economic and political conditions and events, such as economic slowdowns or recessions, interest rate changes or credit loss trends, could also cause the our stock price to decrease regardless of operating results.

If the trading price of our common shares fails to comply with the continued listing requirements of The Nasdaq Global Market, we would face possible delisting, which would result in a limited public market for our common shares.

If we do not continue to comply with the continued listing requirements for The Nasdaq Global Market, then Nasdaq may provide written notification regarding the delisting of our securities. At that time, we would have the right to request a hearing to appeal The Nasdaq determination and would also have the option to apply to transfer our securities to The Nasdaq Capital Market.

We cannot be sure that our price will comply with the requirements for continued listing of our common shares on The Nasdaq Global Market, or that any appeal of a decision to delist our common shares will be successful. If our common shares lose their status on The Nasdaq Global Market and we are not successful in obtaining a listing on The Nasdaq Capital Market, our common shares would likely trade in the over-the-counter market.

If our shares were to trade on the over-the-counter market, selling our common shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’ coverage of us may be reduced. In addition, in the event our common shares are delisted, broker-dealers have certain regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions in our common shares, further limiting the liquidity thereof. These factors could result in lower prices and larger spreads in the bid and ask prices for common shares.

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ITEM 6. EXHIBITS

31.1	Rule 13a-14(a)/15d-14(a) Certification (1)
31.2	Rule 13a-14(a)/15d-14(a) Certification (1)
32	Section 1350 Certifications (2)

(1)	Filed herewith.
(2)	Furnished herewith.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CORUS BANKSHARES, INC. (Registrant)
June 3, 2009	By:	/s/ Paula Manley
		Paula Manley
		First Vice President and Chief Accounting Officer (Principal Financial and Accounting Officer and duly authorized Officer of Registrant)

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EXHIBIT INDEX

31.1	Rule 13a-14(a)/15d-14(a) Certification (1)
31.2	Rule 13a-14(a)/15d-14(a) Certification (1)
32	Section 1350 Certifications (2)

(1)	Filed herewith.
(2)	Furnished herewith.

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