A year after posting its first loss, Corus Bankshares Inc. is out of capital and out of options.
The $7 billion-asset Chicago company reported Friday that it lost $487.3 million in the second quarter, leaving its bank unit with a capital deficit of $157 million.
Corus also said it is "highly unlikely" that it can raise capital without the Federal Deposit Insurance Corp. stepping in.
At June 30 its bank had a Tier 1 risk-based capital ratio of negative 3.1%, according to a filing Friday with the SEC.
In February the Office of the Comptroller of the Currency had ordered the bank to boost that ratio to 12% by June 18.
The company said in the filing that it now expects the OCC to deem the bank "critically undercapitalized," subjecting it to prompt corrective action. The filing said regulators must take over such banks within 90 days, unless a better alternative is found.
"The company and the bank are diligently continuing to work with their financial and professional advisers in seeking qualified sources of outside capital," Corus said in the filing. "At this point in time, however, the company believes that it is highly unlikely that it will be able to obtain additional outside capital that does not include the provision of substantial assistance by the FDIC or other federal governmental authorities."
Since May Corus has submitted various capital and liquidation plans to regulators, but all have been rejected.
One proposal, which the OCC rejected on July 6, called for the company to sell the bank's assets over the next two and a half years, then sell the bank itself to an investor.
Corus bet heavily on condominium construction lending in once-booming markets like south Florida, Arizona and California. A year ago those loans made up 83% of the company's portfolio, but losses on them have piled up as the real estate market crashed. Corus' five consecutive quarterly losses total $1.2 billion.
It attributed the second-quarter loss of $487.3 million primarily to a $333.6 million provision for loan losses. For last year's second quarter it posted a loss of $16.2 million, its first loss ever, driven by a $58.5 million provision. At June 30 the company had $3.1 billion of nonperforming assets, up 261% from a year earlier.
