Commonwealth Bankshares Inc. (CWBS) said it is stepping up
efforts to restore its capital levels after the Federal Reserve on
Friday gave it 30 days to do so.
The parent of Bank of the Commonwealth, which operates 21
offices in Virginia and North Carolina has about $1 billion in
assets, on Thursday said it has been exploring options to meet its
regulatory requirements and return to profitability since earlier
this year.
The lender been operating since July 2010 under an agreement
with the Federal Reserve Bank of Richmond and Virginia's Bureau of
Financial Institutions that calls for the company to address its
credit quality and capital concerns.
Commonwealth in its first-quarter earnings report during May
disclosed that its total risk-based capital ratio was 6.29% as of
March 31, below the regulatory minimum of 8%.
The bank has been working through its troubled loans, moving a
"significant number" to non-accrual status.
"We have made a lot of progress in the past year of working
through our problem credits," said President and Chief Executive
Chris Beisel. "Unfortunately, our capital levels have suffered as a
result. Yet, this point was the point we needed to get to in order
to fully identify and quantify our problems followed by setting a
corrective course which has been accomplished."
Commonwealth shares, which last traded above $1 in March, were
up 4 cents at 47 cents in recent trading.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com