Cape Bancorp (CBNJ) in Cape May Courthouse, N.J., has joined the list of banks selling securities to comply with the Volcker Rule.
The $1.1 billion-asset company said in a regulatory filing Thursday that it sold bank and insurance trust-preferred collateralized debt obligations that cost about $8.3 million at an $850,000 loss. The sale represents Cape's entire CDO portfolio, excluding securities it has already written off.
Cape sold the securities because it "believes that all of its CDO securities will be considered disallowed investments" under the Volcker Rule, a final version of which was released last week. The rule limits the trading activities of commercial banks.
Cape says the sale will increase its tangible equity by $1 million, and that it remains well-capitalized. It had Tier 1 capital of 9.5% and total risk-based capital of 14.13% at Sept. 30, according to the Federal Deposit Insurance Corp.