8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 5, 2012

COLONY FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-34456	27-0419483
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2450 Broadway, 6th Floor Santa Monica, CA		90404
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (310) 282-8820

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item. 2.01. Completion of Acquisition or Disposition of Assets.

On March 5, 2012, First Republic Bank closed a secondary public offering of 12,650,000 shares of its common stock for $30.00 per share. As part of First Republic Bank’s secondary public offering, ColFin FRB Investor, LLC (“FRB Investor”), a joint venture among Colony Financial, Inc. (the “Company”) and investment funds managed by affiliates of the Company’s manager, sold 6,198,500 shares of common stock in First Republic Bank, which resulted in net cash proceeds to the Company (after the Company’s pro rata share of underwriting discounts and expenses) of approximately $10.5 million. After giving effect to the disposition of shares as part of First Republic Bank’s secondary public offering, FRB Investor owns an approximate 10.4% interest in First Republic Bank, and the Company owns an approximate 0.6% indirect interest in First Republic Bank through its interest in FRB Investor.

Item 9.01. Financial Statements and Exhibits.

(b)(1) Pro Forma Financial Information.

The unaudited pro forma financial information required to be filed in connection with the disposition described in Item 2.01 is attached to this report as Exhibit 99.1.

(d) Exhibits.

Exhibit Number	Description
99.1	Pro forma consolidated balance sheet of Colony Financial, Inc. as of September 30, 2011 and pro forma consolidated statements of operations for the nine months ended September 30, 2011 and the year ended December 31, 2010

SIGNATURES

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

Date: March 5, 2012	COLONY FINANCIAL, INC.
	By:	/s/    Darren J. Tangen
		Darren J. Tangen
		Chief Financial Officer and Treasurer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Pro forma consolidated balance sheet of Colony Financial, Inc. as of September 30, 2011 and pro forma consolidated statements of operations for the nine months ended September 30, 2011 and the year ended December 31, 2010

EX-99.1

Exhibit 99.1

COLONY FINANCIAL, INC.

PRO FORMA CONSOLIDATED BALANCE SHEET

(In thousands, except share and per share data)

(Unaudited)

	September 30, 2011
			Pro Forma
	As Reported		Adjustments			Adjusted
ASSETS
Cash	$	5,728	$	10,540	(a)	$	16,268
Investments in unconsolidated joint ventures		413,813		(7,080)	(a)		406,733
Loans receivable, net		228,900					228,900
Beneficial interests in securities, available-for-sale, at fair value		31,784					31,784
Other assets		15,118					15,118
Total assets	$	695,343	$	3,460		$	698,803
LIABILITIES AND EQUITY
Liabilities:
Line of credit	$	32,000	$			$	32,000
Secured financing		13,889					13,889
Accrued and other liabilities		13,626					13,626
Due to affiliates		3,496					3,496
Dividends payable		10,716					10,716
Deferred underwriting discounts and commissions payable to underwriters		5,750					5,750
Deferred underwriting discounts and commissions reimbursable to Manager		5,750					5,750
Total liabilities		85,227		—			85,227
Commitments and contingencies
Equity:
Stockholders’ equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none outstanding		—					—
Common stock, $0.01 par value, 450,000,000 shares authorized, 32,471,700 shares issued and outstanding		325					325
Additional paid-in capital		595,543					595,543
Retained earnings		5,536		3,460	(a)		8,996
Accumulated other comprehensive loss		(1,804)					(1,804)
Total stockholders’ equity		599,600		3,460			603,060
Noncontrolling interest		10,516					10,516
Total equity		610,116		3,460			613,576
Total liabilities and equity	$	695,343	$	3,460		$	698,803

See notes to unaudited pro forma consolidated financial statements.

COLONY FINANCIAL, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Nine Months Ended September 30, 2011
				Pro Forma
	As Reported			Adjustments			Adjusted
Income
Equity in income of unconsolidated joint ventures	$	33,868		$	(743	) (b)(c)	$	33,125
Interest income		10,877						10,877
Other operating income from affiliates		1,543						1,543
Total income		46,288			(743	)		45,545
Expenses
Base management fees		5,841						5,841
Incentive fees		88						88
Investment expenses		844						844
Investment expenses reimbursed to affiliate		1,020						1,020
Interest expense		1,652						1,652
Administrative expenses		3,125						3,125
Administrative expenses reimbursed to affiliate		1,321						1,321
Total expenses		13,891			—			13,891
Net unrealized loss on derivatives		(8	)					(8	)
Foreign exchange loss, net of foreign currency hedges		(143	)					(143	)
Income before income tax benefit		32,246			(743	)		31,503
Income tax provision		253						253
Net income		31,993			(743	)		31,250
Net income attributable to noncontrolling interest		799						799
Net income attributable to common stockholders	$	31,194		$	(743	)	$	30,451
Net income per common share:
Basic	$	1.14					$	1.11
Diluted	$	1.12					$	1.10
Weighted average number of common shares outstanding:
Basic		27,400,400						27,400,400
Diluted		27,750,000						27,750,000

See notes to unaudited pro forma consolidated financial statements.

COLONY FINANCIAL, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except share and per share data)

	Year Ended December 31, 2010
				Pro Forma (Unaudited)
	As Reported			Adjustments			Adjusted
Income
Equity in income of unconsolidated joint ventures	$	24,227		$	(419	) (c)(d)	$	23,808
Interest income		3,158						3,158
Other operating income		40						40
Total income		27,425			(419	)		27,006
Expenses
Base management fees		3,542						3,542
Investment expenses		442						442
Interest expense		555						555
Administrative expenses		3,687						3,687
Administrative expenses reimbursed to affiliate		1,656						1,656
Total expenses		9,882			—			9,882
Other income and expenses
Realized gain on sale of loan receivable		603						603
Foreign exchange loss, net of gain on foreign currency hedge of $43		(149	)					(149	)
Income before income taxes		17,997			(419	)		17,578
Income tax provision		243						243
Net income		17,754			(419	)		17,335
Net income attributable to noncontrolling interest		23						23
Net income attributable to common stockholders	$	17,731		$	(419	)	$	17,312
Net income per common share:
Basic	$	1.20					$	1.18
Diluted	$	1.18					$	1.15
Weighted average number of common shares outstanding:
Basic		14,716,200						14,716,200
Diluted		15,003,700						15,003,700

See notes to unaudited pro forma consolidated financial statements.

COLONY FINANCIAL, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

1. Pro Forma Adjustments

On March 5, 2012, ColFin FRB Investor, LLC (“FRB Investor”), an unconsolidated joint venture in which Colony Financial, Inc. (the “Company”) holds a 5.91% ownership interest, completed the sale of 6,198,500 shares of common stock in First Republic Bank. The shares were sold in connection with First Republic Bank’s secondary public offering. FRB Investor, which owned an approximate 15.2% interest in First Republic Bank prior to the disposition, currently owns an approximate 10.4% interest in First Republic Bank. The Company’s indirect ownership interest in First Republic Bank is approximately 0.6% through its ownership in FRB Investor.

The Company’s unaudited pro forma consolidated financial statements give effect to the disposition of 31.6% of its investment in First Republic Bank. The Company’s pro forma balance sheet as of September 30, 2011 includes adjustments to reflect the disposition as if it had occurred at that date. The statements of operations for the nine months ended September 30, 2011 and the year ended December 31, 2010 include adjustments to reflect the disposition as if it had occurred at the beginning of each period presented. The following pro forma adjustments are included:

(a) Represents the Company’s share of proceeds, reduction in investment in unconsolidated joint venture and gain on sale of approximately $10.5 million, $7.1 million and $3.5 million, respectively, resulting from the sale of 6,198,500 shares of First Republic Bank’s common stock by FRB Investor in connection with the closing of First Republic Bank’s secondary offering on March 5, 2012.

(b) Represents the reduction of the Company’s pro rata share of First Republic Bank’s net income for the nine months ended September 30, 2011 as a result of FRB Investor’s sale of shares in First Republic Bank’s secondary public offering on March 5, 2012.

(c) Does not include the non-recurring gain on sale of approximately $3.5 million resulting from the Company’s disposition of a portion of its indirect interest in First Republic Bank.

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