Colonial BancGroup Inc. reported a third-quarter net loss of $71 million, or 35 cents a share, leading the company to suspend its quarterly dividend.
The $26.3 billion-asset Montgomery, Ala., company's lost $9 million in the second quarter and earned $69.4 million a year earlier.
Analysts on average had expected a loss of 3 cents a share, according to Thomson Reuters.
Credit costs were the critical factor. Colonial's third-quarter loan-loss provision more than doubled from the second quarter and grew 33-fold from a year earlier, to $159.4 million. Nonperforming assets rose 65.9% from the second quarter and 865% from a year earlier, to $677.7 million. The results included $6.1 million of securities losses.
Robert E. Lowder, Colonial's chairman, president, and chief executive, said in a press release that suspending the dividend would save $77 million of capital a year. His company had cut its dividend in half in April.
