This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

Corus Loan Portfolio Deteriorating

Corus Bankshares (CORS) expressed substantial doubt about its viability in a regulatory filing Tuesday, saying more than 50% of its loan portfolio was now considered nonperforming.

Chicago-based Corus reported nonperforming loans of $2.0 billion in its delayed 2008 10-K report, filed with the Securities Exchange Commission after the market close Monday, up from the $1.5 billion reported in its Jan. 30 earnings release.

TheStreet.com noted the company's dim prospects as far back as August 2007, when the company paid a special dividend to shareholders. We noted the threat to the company's dividend on common shares in light of its high exposure to nonperforming condominium loans in some of the areas hit the hardest in the boom-and-bust real estate cycle.

The following shows the holding company's nonperforming assets ratios for the past five quarters:

Corus Bankshares ($Mil)
2008 10-K report, SNL Financial

Based on the revised figures, nonperforming loans reached 50.25% and nonperforming assets rose to 29.28%. Loan loss reserves covered 13% of nonperforming loans. The company's tier-1 leverage ratio was 4.4%, its tier-1 risk-based capital ratio was 6.2% and its total risk-based capital ratio was 12.3%.

While ordinary regulatory guidelines for capital ratios apply to banks themselves and not to holding companies, that 4.4% tier-1 leverage ratio was lower than the 5% required for a bank to be considered well-capitalized.

According to a regulatory order the company entered into with the Office of the Comptroller of the Currency on Feb. 18, Corus was required to achieve and maintain a tier-1 leverage of at least 9% and a tier-1 risk-based capital ratio of at least 12% within 120 days. The company said there could be no assurance it would meet these and other requirements of regulatory agreements with the OCC and the Federal Reserve Bank of Chicago, in which case the company and Corus Bank NA would be subject to other enforcement actions, and "even the placing of the bank into conservatorship or receivership."

1 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
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CBON $24.41 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs