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

Colonial Capital Infusion Remains in Doubt

Moody's Investors Service on Wednesday downgraded Colonial because of the threat to the deal being consummated, "heightened by the current challenging environment for obtaining such financing." The rating agency downgraded its financial strength rating for Colonial Bank to E+ from D, and long-term bank deposits rating to B1 from Ba2.

"The downgrade reflects its opinion that, given the likely credit costs in the bank's commercial real estate portfolio, there is a significant risk of the firm becoming undercapitalized, absent a substantial capital injection," Moody's said. The ratings remain on review with direction uncertain, pending the outcome of the capital raise, it said.

Colonial was roundly criticized after the company disclosed on Jan. 27 that its approval to receive $553 million in TARP funds -- announced on Dec. 2 -- was contingent upon Colonial first raising $300 million privately.

The rancor was compounded when Colonial CEO Robert Lowder was less than forthcoming about a Dec. 15 memorandum of understanding the company entered into with Alabama bank regulators.

According to the company's fourth-quarter conference call transcript, Lowder said "we are under no C&D [cease and desist order] and we are under no prompt corrective action condition," when asked directly by Sandler O'Neill analyst Kevin Fitzsimmons if Colonial was operating under "any prompt corrective action or C&D with the regulators," While this was technically true, the MOU is a serious regulatory action and should have been disclosed.

The lack of disclosure of the MOU provided grist for several shareholder lawsuits against Colonial.

Taylor, Bean & Whitaker is privately held, and now operates as a thrift holding company, since it controls Platinum Community Bank of Rolling Meadows, Ill. Platinum Community had $87 million in total assets as of Dec. 31. The plan is to convert Colonial, which had $26 billion in total assets to an S&L charter after the deal is completed.
Philip W. van Doorn joined Ratings Inc. in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a Bachelor of Science in business administration from Long Island University.
2 of 2

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
AAPL $93.61 -0.44%
FB $98.31 -5.50%
GOOG $671.15 -1.80%
TSLA $147.93 -9.00%
YHOO $26.91 -3.80%


Chart of I:DJI
DOW 15,838.48 -366.49 -2.26%
S&P 500 1,831.06 -48.99 -2.61%
NASDAQ 4,223.1720 -139.9720 -3.21%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs