Undercapitalized Thrifts Join Growing List
Kopecky said that after the merger was completed, Countrywide was no longer willing to make good on its agreement to purchase $40 million in new mortgages, and illiquidity in the secondary market forced American Sterling to take the writedown.
Kopecky went on to point out that on a GAAP basis, American Sterling had total equity capital of $12.4 million as of Dec. 31. Tier-1 capital was negative $1.9 million, mainly because deferred tax assets of $14.2 million were required to be excluded. He also expressed confidence the institution would either be sold by the end of March, or would be able to raise additional capital.
Rounding out the critically undercapitalized thrifts were two Florida institutions: Federal Trust Bank of Sanford and BankUnited FSB of Coral Gables.
Federal Trust Bank is held by Federal Trust Corp. (FDTR), which announced on Feb. 10 that its agreement with the OTS to either sell the thrift or most of the thrift's assets, was extended to March 13.BankUnited FSB, Florida's largest bank or thrift, with $23.5 billion in assets, is held by BankUnited Financial (BKUNA). TheStreet.com Ratings downgraded BankUnited FSB to an E- (very weak) financial strength rating on Jan. 28, when the company warned in its fourth-quarter earnings release that it could be closed by the OTS. A subsequent bid for BankUnited Financial led by investor Wilbur Ross and the Carlyle Group, which would have (presumably) included a loss-sharing agreement with the FDIC, caused shares to pop on Feb. 10, closing at 35 cents, up 40% on the day. The deal seemed to fizzle, with The Wall Street Journal citing sources who said the FDIC would not be willing to enter into a loss sharing deal to assist in a potential acquisition. On Friday, BankUnited, along with BankAtlantic (BBX) announced it would halt foreclosures for at least a month. Several analysts commented that the institutions were hoping the federal government's upcoming loan buying activities would allow them to unload a significant amount of nonperforming mortgage loans.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV