Colonial BancGroup (CNB) on Monday consented to a cease-and-desist order given by the Federal Reserve. The order, which takes effect July 22, addresses the capital, liquidity and loan loss allowance issues at the bank, Colonial said in a statement on the order. Colonial BancGroup acknowledged loan losses in its portfolio are greater than estimated or expected, leading to a liquidity crisis that also affected the firm’s ability to raise additional capital and close on a pending agreement with investors led by Taylor, Bean & Whitaker Mortgage Corp. (TBW). In March, Colonial signed an agreement with investors led by TBW for a $300m equity investment, according to a quarterly report filed with the Securities and Exchange Commission (SEC). The firm in May reported a $168.36m net loss in the three-month quarter ending March 31, compared with $30.13m of profit posted in the previous-year quarter, according to the quarterly SEC filing. Write to Diana Golobay. Disclaimer: the author held no relevant investments when this story was published.
Regulators Order Cease and Desist on Colonial’s Capital Woes
Most Popular Articles
Latest Articles
Indiana senator explains his inquiries into reverse mortgages
Sen. Mike Braun offered insights into his recent letter to Ginnie Mae and the potential need for more scrutiny of the HECM and HMBS programs.