Paul Davis: With investors, what will become of Colonial?

Something strange happened between The Ides of March and April Fool’s Day. It was the demise, or the beginning of the demise of the $26 billion empire that is or was Colonial Bank.

A group led by Taylor, Bean & Whitaker Mortgage Co. agreed to invest $300 million in the company, sending its shares up as much as 6 percent. The share value had dropped as low as 29 cents last year. The arrangement has a termination fee of $10 million. The bank’s board, primarily close friends of Chairman Bobby Lowder, will be fixed at 15 members, down from 16, of which five will be selected by the investors.

Shares of the Montgomery-based company went from a high of $13.35 during the past year to a low of 29 cents. It trades Friday at 90 cents to $1.

There are more strings attached to this deal than to Boy Scout Troop 119 at a kite-flying contest.
Colonial was overloaded with bad loans and had sought more than $500 million in federal bailout funds. The feds seemed prepared to provide the funds if Colonial could raise $300 million in private capital by the end of March.

The search for private money was launched, several lawsuits now maintain, without disclosure to potential investors the federal money was not coming unless private cash was raised.

Current plans by the new investors including taking five seats on the board and converting the bank into a thrift, a savings and loan which will have a bit less federal regulation.

Though the investors will own about 75 percent of outstanding shares, Colonial is expected to continue to operate as a stand-alone publicly traded company, the company said in a statement.
What will the feds now say? What does this mean for Colonial’s present directors? What happens to Lowder? Will his iron grip on Auburn’s trustees be broken? The Ides of March didn’t work out too well for Julius Caesar. He lost his empire. What lies ahead for Lowder?

Et tu, Brute?

If you have answers to any of these questions, please get in touch with me or Mr. Lowder.

* * *

Our maid knocked on the door Wednesday morning, head down and with a somber look on her face. She didn’t know what to say or whether or not she should enter the house with all her cleaning supplies in hand.

She had just read the morning’s Opelika-Auburn News front page, which had a line at the top about Auburn mourning the death of Paul Davis (details on page 6.)

I was in the shower and was also mourning the death of Paul Davis, a good friend for many, many years and giving thanks for his good life and also thanking the good Lord that I had been granted another day.

Paul R. Davis grieving over the death of Paul E. Davis. The last time we visited he was in a wheelchair, a blanket over his cold legs. He still had his signature smile.

We’ve shared a friendship, time at church together, and a name for a long, long time. We both were Auburn transplants and fell in love with the loveliest village. I took great delight in fielding those Sunday morning phone calls when an irate reader wanted to dress me down for something I had written in the morning paper. I would listen for a moment or two and then say, “Hey, you had the wrong number. Check the phone book. There are two Paul Davis’ listed. I’m the Auburn coach. Call the other one.”

Coach Paul finally caught on to the ruse and told his Sunday morning callers who were complaining about his decision on a third-and-one Saturday afternoon football play that was the newspaperman. If they wanted to complain about the game, call the other Paul Davis.

We always played tag with our Ware Jewelers bill. His would come to me. Mine would go to him. Boy, did he ever have good taste.
I’ll miss Coach Paul. Now there is nobody else I can refer my irate callers to. Davis, who was a former assistant coach at AU and head coach at Mississippi State, died Tuesday at Bethany House in Auburn. He was 87. Davis joined the AU staff under head coach Ralph “Shug” Jordan in 1967.

Paul Davis writes a Sunday column for the Opelika-Auburn News and can be reached at paul_davis@charter.net