With more than half of its loans now nonperforming, Corus Bankshares Inc. of Chicago said Wednesday that the company's auditors have issued a warning about its ability to survive.
In a filing with the Securities and Exchange Commission, the $8.3 billion-asset company reported a fourth-quarter loss of $316.7 million, compared with earnings of $1.9 million a year earlier.
Its provision for loan losses rose tenfold, to $336 million.
At yearend, $2 billion of its loans were non-performing, up 366% from a year earlier. Nonperforming loans spiked to 50.3% of the total.
The loan trouble has created a capital headache for Corus.
In February, the Federal Reserve Bank of Chicago and the Office of the Comptroller of the Currency gave the company 60 days to submit a plan to raise capital and 120 days to get its bank unit to the elevated capital levels they imposed. Failure to do either would trigger a new order requiring the company to sell or liquidate the bank.
In its filing Wednesday, Corus said the bank unit would not be able to achieve a leverage ratio of 9% and its Tier 1 risk-based ratio of 12%, as required in the regulatory order.
At yearend, the unit had a Tier 1 leverage ratio of 7.2% and a Tier 1 risk-based ratio of 10.2%.
Corus bet big on construction lending for condominiums in areas hard hit by the housing crisis, including south Florida and Georgia.
Corus had warned last month that it would be late in filing its quarterly and annual results and that its auditors might question its viability.
