Colonial has expressed confidence it would complete the private capital raise and receive the TARP money in the first quarter. And while the company's failure to disclose that the TARP approval was contingent on the private capital-raising in the Dec. 2 filing might have been an oversight, some lawyers believe Colonial could be a violation of an SEC rule that bars companies from making untrue statements or omitting material facts that would keep financial statements from being misleading. The revelation comes at a time when Colonial faces a potentially dire capital situation. Even though the company emphasized it had increased reserves and was well capitalized with leverage and risk-based capital ratios of 6.13% and 13.16%, the ratio of nonperforming assets to total assets was rising to 4.83% as of Dec. 31, up from 4.43% in September. Meanwhile, net loan charge-offs for the fourth quarter were $415 million. The annualized pace of net charge-offs to average loans was 11.15%. Colonial's ratio of loan loss reserves to total loans was 2.24% as of Dec. 31. If this level of loan losses continues over the next few quarters, Colonial will easily blow through its capital, even including the $853 million it expects to raise. E*Trade Financial While the government is required by law to disclose TARP investments once they are made, companies may be better off remaining silent about applications before the government acts on them. E*Trade on Nov. 7 said it had applied for $800 million TARP money and that its application was being reviewed by the Office of Thrift Supervision, its primary regulator. On Nov. 25, E*Trade said it was continuing "to work constructively with regulators through each phase" of its application, and again expressed confidence it would receive approval. As the weeks dragged on with no decision by the government, investors and analysts grew uneasy. In late December, Standard & Poor's said E*Trade could face further downgrades if the TARP application wasn't approved. Meanwhile, investors worried that the government was hesitating to aid E*Trade for fear of appearing to benefit hedge fund Citadel Investments, its largest investor.