Another round of writedowns on pooled trust-preferred securities has left Rainier Pacific Financial Group Inc. and its bank unit significantly undercapitalized.
The $764 million-asset Tacoma company warned in a Securities and Exchange Commission filing this week that it seems unlikely to raise capital or find a buyer.
Rainier reported a $35 million third-quarter loss, compared with a loss of $3 million a year earlier. It cited a $22.1 million other-than-temporary impairment charge on its trust-preferred investments, a $5.7 million provision for loan losses and a $16.7 million valuation allowance for its deferred tax asset.
At the end of the quarter, its bank unit had a leverage ratio of 3.04% and a total risk-based capital ratio of 3.79%. A cease-and-desist order issued Sept. 30 by the Federal Deposit Insurance Corp. and the Washington State Department of Financial Institutions gave the bank 60 days to raise its Tier 1 leverage ratio to 10% or to find a buyer.
The company said it is trying but that its prospects are dim, "given the generally soft current market conditions for bank mergers and acquisitions, and the desire for FDIC-assisted transactions by many acquirers."