This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

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). 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.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $14.57 0.07%
BBX $15.30 -0.78%
AAPL $93.98 0.26%
FB $118.57 0.84%
GOOG $698.21 0.75%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs