Capmark Bank, the wholly owned Utah industrial bank subsidiary of Capmark Financial Group Inc., agreed with each of the Federal Deposit Insurance Corp. (FDIC) and the Utah Department of Financial Institutions (UDFI) to the entry of orders to cease and desist, dated and effective Oct. 2.
The orders require Capmark Bank to maintain a Tier 1 leverage ratio of at least 8% and a total risk-based capital ratio of at least 10%.
Within 45 days of the issuance of the orders, Capmark Bank must submit a capital plan to the FDIC and the UDFI. In addition, without the prior written consent of the FDIC and the UDFI, Capmark Bank may not make any extensions of credit to the parent company or any of its affiliates, declare or pay dividends or increase the amount of its brokered CDs in excess of the amount held on the date of the orders.
In order to support the capital position of Capmark Bank, the Capmark Financial Group made a capital contribution in the amount of $600 million to Capmark Bank on Sept. 30. The capital contribution consisted of $494.2 million in cash and $105.8 million in servicing advances.
Capmark Financial Group does not expect the orders to have a material impact on its existing lending commitments and deposits or its ability to conduct trust services.
SOURCE: Capmark Bank