The Virginian-Pilot
©
NORFOLK
Battered by continuing loan losses, Commonwealth Bankshares Inc. reported another quarterly loss.
The Norfolk-based parent of Bank of the Commonwealth lost $9.3 million, or $1.36 per share, in the quarter ended Sept. 30, after setting aside $20 million to cover loan losses. In the same quarter of 2009, it lost $27.4 million, or $3.99 a share.
The banking company didn't announce earnings but reported them in a required quarterly filing Monday with the SEC. Its nonperforming assets, including past-due loans and foreclosed real estate, grew by $12.9 million in the July-to-September quarter to $121.6 million. That's 10.3 percent of its $1.18 billion in total assets.
While struggling to shed troubled loans and foreclosed properties, Commonwealth also has been shrinking its loan portfolio to reduce risk and preserve capital. Since the beginning of 2010, its loan portfolio had fallen 7.6 percent to $911.4 million as of Sept. 30. It also slashed its exposure to construction and development loans by more than half to $117.4 million. Meanwhile, it has pared deposits to $996.4 million on Sept. 30, down 7.8 percent since Dec. 31.
Since July 2, Commonwealth Bankshares has been operating under an agreement with federal and state banking regulators that is designed to force it to strengthen management and improve its loan portfolio. Its shares fell 42 cents in trading to close at $1.95 each.
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Drum Queen- While I’m
Drum Queen- While I’m unsure about the accuracy of some of your statements about potential SEC violations, I do agree with your sentiment that as investors we have a responsibility to do whatever might be possible to try to correct CWBS’s steep downward spiral of the last few years. Unfortunately, I believe that ship may have long ago sailed.
While a clean sweep of the Management and Board would not be an overnight fix, it certainly would be a significant step towards ensuring the Bank’s long-term survival. Woodard’s tenure at Commonwealth has been impressive and commendable, but the time has long past for a change.
I believe they are quite accurate
Why do you think he stepped down from Chairman of the Board, although that isn't reality. The board members that were calling for Woodard to step down as Pres & CEO were the board members that were just ousted by the "NEW AGE RULE" that Tavss & Woodward put in place.
Call the SEC, ask them about the SFO voting all the shares for all employees, they will tell you, not suppose to be. I was told by a former emplyee, he called and that the SEC was suppose to be looking into that, right after that Woodard stepped aside as COB.
I agree that his tenure has been commendable, He should know when to step aside. If the CFO still has power to vote, Brandon will be President next. The bank is paying his training as we speak. (Is that allowed?)
This year, as
This year, as Commonwealth’s Tsar sits down to consider how he’ll approach his long customary, and oft eloquently written message to friends, employees, and substantial borrowers, (ironically, the Board happens to fall into all three categories) perhaps he’ll consider a departure from his usual message of pontificating the virtues of perseverance and teamwork. Instead, maybe he’ll consider sparing those recipients of his well intentioned, yet overly idealistic rhetoric, and instead draft what could ultimately become his pièce de résistance, his resignation.
Perhaps he’ll even include
Perhaps he’ll even include the departure of the heir presumptive (let us pray he isn’t the heir apparent) - possibly the greatest employee holiday bonus given in years! For the rest of us, it could just be a gift in lieu of a healthy stock value, or an informative and honest Annual Meeting.
continued
Although they may have allocated funds to cover the up to 68% of the loans presently considered to be “bad”, the funds currently dedicated to losses could easily fail to cover the potential losses that may have yet to be exposed should these practices still be occurring.
If the reporting omissions
If the reporting omissions were based on a previous advertising relationship, which I highly doubt, I’d venture to say that Towne Bank will likely have to burn down an orphanage before an unflattering article about “The Bank of Bob” ever hits The Virginian-Pilot’s presses.
Curious reporting
Curious reporting Virginian-Pilot. One of the largest publicly traded companies in the Hampton Roads area posts yet another sizable loss and it's only identified in the headline as "company"?
How about reporting the fact that this "company" also reported in Monday's filing that it's no longer considered to be "well-capitalized" by federal regulators? Considering Commonwealth's prior insistence of repeatedly citing its former "well-capitalized" status as a silver lining during the company's previous 10-K filings, this would seem to be an important inclusion for your story.
headline is fixed to extent it can be
The headline has been fixed. You're right, it should have at least said that it was bank. Company is far too generic. The story was posted this morning and the headline was shortened to fit a space by someone other than me. There will be a little more written about these results. The story was space constrained in the paper this morning. Check the BizBuzz blog later today.
CURIOUS REPORTING
True. Tom Shean would never have neglected naming the company. He seemed to relish in reporting Commonwealth's failures.
- The silver lining in the article is that Commonwealth's loss provisions now cover 68% of the bad loans.
- The bank is also "almost" well-capitalized - it needs 10% and has only 9.44%.
The cloud? They "only" wrote off $15 mil - though they note when they wrote off $19.5 mil last Sept (2009) it was "a high level of charge-offs ($19.5 million) in the third quarter of 2009". Management doesn't think that $15 mil is high? The fed forced the bank to take that "high level" - it had to revise its 10-Q.
My guess is that the bank won't return to profitability until after the first quarter of 2011.
Partners
These guys were big advertising customers of the Pilot. That is why their demise was hidden.