Current news for this company:
Colonial Bank - Warehouse Lending
Update - 2009/08/07: According to an article out today in the Birmingham Business Journal, Colonial BancGroup may be taken over by the State of Alabama:
"The Alabama banking department has informed Colonial BancGroup that may be placed in receivership over as soon as next week ..."
The above news followed right on the heels of the earlier announcement as seen on the Wall Street Journal, "Colonial BancGroup Inc.'s (CNB) struggle to find the capital to survive received another severe blow with the bank's announcement that it is the target of a federal criminal investigation."
Shares of Colonial performed the classic 'dead-fish-flop' over the past 48 hours running up 37% after news got out the Federal raid appeared to be looking for TB&W evidence. Shares at the time of this posting closed 30% back down.
Update - Midday: Just in, the Orlando Sentinel confirms agents with the U.S. Treasury's TARP unit and the FBI were "executing warrants both at the Colonial office on East Pine Street and at a location in Ocala." Turns out that location in Ocala was none other than the headquarters of Taylor, Bean & Whitaker.
Original Posting - 2009-08-03: Unconfirmed but not unexpected, we're hearing that Montgomery Alabama based Colonial Bank may be in the process of being taken over by regulators today. An eye witness report has it that federal authorities descended on the Colonial Bank branch in Orlando, FL this morning. They were "in and out of there like ants on a nest," the source said. As reported in the Birmingham News, "Colonial BancGroup received a search warrant from a U.S. government agency."
""We are cooperating with the federal government," spokeswoman Merrie Tolbert told Bloomberg News today in an interview."
In its second quarter earnings statement on 2009-07-31, holding company Colonial Bancgroup announced it had failed to close and mutually terminated a stock purchase agreement with Taylor, Bean & Whitaker. The deal would have provided a much needed capital infusion of $300 million and was a contingency for Colonial obtaining additional funds through the Fed's Troubled Asset Relief Program. Unable to make that arrangement, reeling from huge losses and operating under regulatory restriction, the bank issued a dire warning about its future:
"As a result of the above described regulatory actions and the current uncertainties associated with Colonial's ability to increase its capital levels to meet regulatory requirements, management has concluded that there is substantial doubt about Colonial's ability to continue as a going concern."
The Birmingham Business Journal noted Colonial Bancgroup's reported 2Q loss of $606 million was "more than three times higher than the $168 million net loss reported in the first quarter."
Colonial Bank is the nation's largest provider of warehouse lines-of-credit to non-depository lenders according to a recent article in National Mortgage News. U.S. Banker reported the bank had $4.1 billion in outstanding commitments and was the "primary warehouse source" for Taylor, Bean & Whitaker. The Ocala, FL-based lender headed up an investment group comprised largely of other Colonial Bank warehouse clients "all in hopes of staving off an FDIC seizure."
We are continuing to monitor for news and reports as this situation unfolds. If you can provide additional information please don't hesitate to contact us.
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Important: This company is on our list of lending operations that are apparently ailing or which we think are worth watching for any other reason. We make no representation or claim that any company on this list will or will not continue as a going concern, or change in any other way, adverse or beneficial. If you have concerns about this company, we suggest contacting them directly and/or checking with other reliable sources.