The Virginian-Pilot
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Even as Commonwealth Bankshares Inc.'s loan troubles mounted, Edward J. Woodard Jr., its president and CEO, always noted with pride that its bank remained "well capitalized" in regulatory terms.
But a third-quarter loss eroded its capital. Bank of the Commonwealth is now deemed "adequately capitalized" under Federal Reserve rules, according to a filing with the Securities and Exchange Commission.
As a result, regulatory restrictions have kicked in that limit the interest rates it can pay for deposits and its use of brokered deposits. Its ability to borrow from the Federal Reserve Bank of Richmond or the Federal Home Loan Bank of Atlanta also could be restricted.
While the company has the liquidity "to satisfy its depositor's requirements and to meet customers' credit needs," Commonwealth said in the SEC filing, the restrictions could hurt the bank's liquidity and its ability to compete for deposits.
The company is exploring a variety of options to raise new capital.
Woodard did not return a call seeking comment.
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