With all the hype of National Signing Day this past week, you may have missed the story posted by GumpTown Tiger in the Fanposts section (right side bar). He shared with us a column written by Opelika-Auburn News writer Paul Davis that details the troubles of Bobby Lowder.
Yesterday we wrote about Chizik giving Auburn fans hope. I think you'll agree this column also gives everyone hope. There may be something good that comes out of this recession after all.
Lowder should take his money and go home
By Paul Davis
Columnist, Opelika-Auburn News
Published: February 2, 2009
Is Bobby Lowder too big to fail? The same week that the Montgomery banker was announced as one of Alabama's most influential men, the federal government and Colonial Bank shareholders have selected him as one the nation's worst bankers.
The situation at Colonial is so bad, some say, that it may be destined to be seized by the Federal Deposit Insurance Corporation or sold to a more stable banking institution.
Stock prices fell so low on Wednesday that I considered buying a few thousand shares.
My bride quickly vetoed that notion. But at 78 cents a share it looked tempting. And before the final bell Wednesday, it had started a recovery, closing at 85 cents.
Folks started unloading that stock as fast as wet rats jumping from a sinking ship. Some 25 million shares were sold and Lowder's personal portfolio (he has about 7.7 million shares) shrank from a value of more than $200 million to around $6.5 million.
Where do all these developments leave one of the state's richest men and Auburn University's most powerful trustee? He has always used money to buy his way into prominent positions, both in the business world and at Auburn University. It was his daddy's money that got him started and that money helped him muscle his way into the most powerful person at Auburn. He has been on the Auburn board since before today's crop of seniors was born.
He, alone, hired and fired presidents and coaches. He could get you promoted or demoted. He walked into board meetings with enough proxy votes in his pocket that he knew the outcome of every vote. A majority of Auburn's trustees, for most of the time he has served, have been deeply in debt to Lowder, served on his board, or were on his payroll. The few who have no ties to Lowder were always in the minority. His wings were clipped a bit when the Southern Association of Colleges and Schools told him to back away or sit back and see Auburn stripped of its accreditation.
During the years he was screwing up things at Auburn, he and his bankers were screwing up what was once a thriving financial institution.
He led the march into the sub-prime mortgage market, making loans he shouldn't have made to people who had no chance of repaying. The losses are staggering.
Lowder was seeking another federal bailout recently. The feds said that for Lowder to get another $553 million in taxpayer funds, he needed to raise from investors a match of $300 million. He couldn't do that and the stock tanked.
Tony Plath, a University of North Carolina banking professor, said failure to get the federal cash "is the Good Housekeeping kiss of death" for Colonial.
A spokesman for Morgan Keegan & Co. in New York said "(Colonial) Shareholder value has already been destroyed..."
Readers of this column know there has never been any love lost between Lowder and me. I do not gloat over his misfortune. I pity the man. Friendships, love and respect are never purchased. They are earned. Lowder has never earned his way. Bricks and mortar and bronze letters across the façade of some of Auburn's most majestic buildings don't constitute a real legacy even when adorned with the names of your mother and daddy, yourself and your wife. Richard Scrushy tried that route in Birmingham.
A great legacy is built upon great deeds, on selfless acts. At Auburn, the names associated with its greatness were not wealthy men, but honorable individuals who knew their first obligation was service. The names roll easily off the tongue. Names such as Harry Philpot, Ralph Draughon, Shug Jordan, Wayne Flint, Jim Foy, Wilford Bailey.
I don't know if Colonial Bank is going away. But I surely do hope that Lowder does.
Take one of those spacious, unsold condos in Florida that your bank can't sell and just go away. The state and especially Auburn University would be so much better off.
That's a good legacy. Take the dollars you have left, Mr. Lowder, and just leave.
Please.