Colonial: No 2Q report due to irregularities

MONTGOMERY, Ala. — Colonial Bancgroup has advised the Securities and Exchange Commission it will not be able to file a second-quarter financial report because of alleged accounting irregularities now being investigated.

The Alabama Banking Department also confirmed Tuesday that its board held a private meeting with Colonial officials on Monday. Agency and bank officials declined to comment, but the meeting, previously set for Wednesday, was to ask for Colonial’s consent to make the FDIC receiver for the bank if and when the state banking superintendent deems it necessary.

Montgomery-based Colonial said in its filing Tuesday that because of the alleged accounting irregularities, it does not know how much money it lost in the second quarter or how much it has now.

“The Company has been informed that the alleged accounting irregularities relate to more than one year’s audited financial statements and regulatory financial reporting, and the Company’s Board of Directors and Audit Committee are making every effort to determine the impact of these alleged accounting irregularities on the Company’s financial statements and regulatory financial reporting,” Colonial said.

Colonial said last week it was under a criminal investigation by the Justice Department over the alleged accounting irregularities at its mortgage warehouse lending unit in Orlando, Fla. It was announced earlier that Colonial was the subject of a Securities and Exchange Commission investigation related to its bid for federal bailout funds and its accounting for loan loss reserves.

Colonial, which previously reported $26 billion in assets, has 335 branches in Florida, Alabama, Georgia, Texas and Nevada.