Cooperative Bankshares, Inc. Announces Regulatory Agreement and Order
March 18 2009 - 5:05PM
Business Wire
Cooperative Bankshares, Inc. (the �Company�) (NASDAQ:COOP),
parent company of Cooperative Bank (the �Bank�), the deposits of
which are insured to the highest limits set by the Federal Deposit
Insurance Corporation (the �FDIC�), announced today that the Bank
has entered into an agreement with the FDIC and the North Carolina
Commissioner of Banks (the �Commissioner�) to take affirmative
actions to improve the operations of the Bank.
�Like many financial institutions, we have faced numerous
challenges in light of the current economic environment. Housing
markets have deteriorated nationally as evidenced by the decline in
house prices, reduced levels of sales, increased inventories of
houses on the market and increased foreclosures. The deterioration
in the residential markets has spread into the commercial real
estate markets, resulting in an unprecedented decline in the value
of real estate. This is apparent in our local markets as well. We
are diligently working with the FDIC and the Commissioner to
address the requirements and concerns included in the agreement and
the order. This process is designed to improve stability and the
operation of the Bank and help us in this demanding time,� stated
Todd L. Sammons, Chief Financial Officer and Interim-President and
Chief Executive Officer.
The Bank entered into the Agreement and consented to the
issuance of an Order to Cease and Desist (the �Order�) with the
FDIC and the Commissioner which requires the Bank to take specified
actions to address areas to improve and strengthen the operations
of the Bank. The Order requires, among other things, that the Bank
improve capital levels, develop a management plan, improve funds
management practices, reduce concentrations of credit, improve
lending and collection policies and requires the Board to increase
its participation and supervision of the Bank�s activities. The
Bank entered into the Agreement without admitting or denying any
violations.
The Bank is participating in the FDIC�s Transaction Account
Guarantee Program in which all funds in non-interest bearing
transaction deposit accounts (which include demand deposit checking
accounts that allow for an unlimited number of deposits and
withdrawals at any time) will be protected in full. This insurance
coverage on noninterest-bearing transaction accounts is over and
above the $250,000 coverage already provided to customers. The
coverage will last through December 31, 2009.
The Company filed a Form 8-K with the Securities and Exchange
Commission today that includes the Agreement and the Order as
Exhibits. The descriptions of the Agreement and the Order contained
in this release are qualified in their entirety by reference to
those Exhibits.
Chartered in 1898, Cooperative Bank provides a full range of
financial services through twenty -one offices and one loan
origination office in North Carolina and three offices in South
Carolina. The Bank's subsidiary, Lumina Mortgage, Inc., is a
mortgage-banking firm, originating and selling residential mortgage
loans through four offices in North Carolina.
This document, as well as other written communications made from
time to time by Cooperative Bankshares, Inc. and subsidiaries and
oral communications made from time to time by authorized officers
of the Company, may contain statements relating to the future
results of the Company (including certain projections, such as
earnings projections, necessary tax provisions, and business
trends) that are considered �forward looking statements� as defined
in the Private Securities Litigation Reform Act of 1995 (the
�PSLRA�). Such forward-looking statements may be identified by the
use of such words as �may,� �intend,� �believe,� �expect,�
�should,� �planned,� �estimated,� �potential� and similar
expressions. For these statements, the Company claims the
protection of the safe harbor for forward-looking statements
contained in the PSLRA. The Company�s ability to predict future
results is inherently uncertain and the Company cautions you that a
number of important factors could cause actual results to differ
materially from those currently anticipated in any forward-looking
statement. These factors include, among others, changes in market
interest rates and general and regional economic conditions,
changes in government regulations, changes in accounting
principles, the quality or composition of the loan and investment
portfolios, the Company�s business strategies, exploration of
strategic options, intended results and future performance and
actions of the Company�s and the Bank�s state and federal banking
regulators. Additional factors that may affect our results are
discussed under the headings �Forward-Looking Statements� and �Item
1A. Risk Factors� in the Company�s Annual Report on Form 10-K for
the year ended December 31, 2007 and in the Company�s Quarterly
Reports on Form 10-Q for the periods ended March 31, 2008, June 30,
2008 and September 30, 2008, each filed with the Securities and
Exchange Commission, which are available at the Securities and
Exchange Commission�s Internet website (www.sec.gov) and to which reference is
hereby made. These factors should be considered in evaluating the
forward-looking statements. Stockholders are cautioned not to place
undue reliance on such statements, which speak only as of the date
of those documents. All subsequent written and oral forward-looking
statements attributable to us or any person acting on our behalf
are expressly qualified in their entirety by the cautionary
statements above. Except to the extent required by applicable law
or regulation, the Company does not undertake any obligation to
update any forward-looking statement to reflect circumstances or
events that occur after the date the forward-looking statements are
made.
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