Capmark Bank Agrees to Cease and Desist Orders
On October 2, 2009, Capmark Bank, the wholly-owned Utah industrial bank subsidiary of Capmark Financial Group Inc. (the “Company”), agreed with each of the Federal Deposit Insurance Corporation (the “FDIC”) and the Utah Department of Financial Institutions (the “UDFI”) to the entry of Orders to Cease and Desist, dated and effective October 2, 2009 (collectively, the “Orders”).
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 UDFI. In addition, without the prior written consent of the FDIC and UDFI, Capmark Bank may not make any extensions of credit to the 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. Under applicable regulations, the inclusion of a capital requirement in the FDIC Order will require Capmark Bank to obtain the approval of the FDIC for the issuance of brokered CDs.
In order to support the capital position of Capmark Bank, the Company made a capital contribution in the amount of $600.0 million to Capmark Bank on September 30, 2009. The capital contribution consisted of $494.2 million in cash and $105.8 million in servicing advances.
Capmark Bank and the Company are working with the FDIC and the UDFI to satisfy all of the requirements of the Orders. The Company does not expect the Orders to have a material impact on its existing lending commitments and deposits or its ability to conduct trust services and intends to continue to serve its customers. Capmark Bank’s deposits remain insured by the FDIC to the maximum limits allowed by law. The Orders did not impose any monetary penalties.
About Capmark®:
Capmark is a commercial real estate finance company that operates three core business lines: lending and mortgage banking, investments and funds management, and servicing.
Forward-Looking Statements
Certain statements in this release may constitute forward-looking statements. These statements are based on management’s current expectations and beliefs but are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Capmark refers you to the documents that it posts from time to time on its website, which contain additional important factors that could cause its actual results to differ from its current expectations and from the forward-looking statements contained in this press release.
Such forward-looking statements are made only as of the date of this release. Capmark expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Capmark’s expectations with regard thereto or changes in events, conditions, or circumstances on which any such statement is based.
Contacts:
Capmark Financial Group Inc.
Media Contact:
Joyce
Patterson, 215-328-3842
Joyce.Patterson@capmark.com
or
Investor
Relations Contact:
Paul W. Kopsky, Jr., 215-328-3000
Investor.relations@capmark.com