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, Colonial on the Brink

Stocks in this article: CORSCNB

With loan quality continuing to plummet, Corus finally eliminated its dividend on common shares in May 2008.

After reporting in early February that its nonperforming assets had increased to $1.9 billion or 23% of total assets, Corus said that while it was still well-capitalized under ordinary regulatory capital guidelines as of Dec. 31, its capital requirements were likely to be increased by regulators. Sure enough, the company entered into an agreement with the OCC on Feb., 18 to achieve and maintain a Tier 1 leverage ratio of at least 9% by June 18.

Corus Bank's Tier 1 leverage ratio stood at a negative 2.1% as of June 30. While the preliminary second-quarter report didn't contain information on credit quality, nonperforming assets comprised 33% of total assets as of March 31, and the bank could had so many problem loans that its net interest income (income from loans and investments less the cost of funds) was negative for the first quarter.

The failure of Corus Bank would likely be very costly for the FDIC, since the bank had $3.7 billion in loans as of June 30, most of which were nonaccrual condominium and commercial real estate loans.

The costliest failure during the 2008-2009 banking crisis so far was IndyMac Bank, which failed in July 2008, with an estimated cost to the FDIC's insurance fund of $10.7 billion. The second most costly was BankUnited, which failed May 21, costing the FDIC an estimated $4.9 billion.

The largest bank or thrift failure was Washington Mutual, which failed last September but cost the FDIC nothing, since JPMorgan Chase (JPM) acquired all of the thrift's deposits, branches and most other assets, with no loss-sharing agreement with the government.

2 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 16,614.81 +215.14 1.31%
S&P 500 1,941.28 +37.27 1.96%
NASDAQ 4,419.4780 +103.4040 2.40%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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