Independence Federal Savings Bank in Washington has called off its acquisition of Colombo Bank in Rockville, Md., after an indication from regulators that the deal had been delayed indefinitely.
On Monday, the $157 million-asset Independence said the Office of Thrift Supervision would not approve the acquisition because both thrifts are operating under cease-and-desist orders. The only way to end its term in regulatory limbo, the company said, was through a substantial capital infusion. Independence said it has found none.
The deal, announced in February 2009, would have paired two thrifts mostly owned by Washington businessman Morton A. Bender and his family.
However, Independence's capital was depleted throughout 2009, leaving the thrift undercapitalized at the end of the fourth quarter. It remained undercapitalized at March 31. The $164 million-asset Colombo was well capitalized at Dec. 31 but had a glut of nonperforming assets.