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 - Get Report) 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.