Amcore says undercapitalized, Q3 loss up 8-fold

Amcore is undercapitalized or significantly undercapitalized under some regulatory capital standards at the consolidated and bank levels, the company said in a statement.

However, the bank's Tier 1 capital remains adequately capitalized, Amcore added.

Amcore said it was in technical default under its credit agreement with JPMorgan Chase Bank as a result of being undercapitalized at the consolidated level.

On July 31, the company had received a waiver from JPMorgan when it was previously in default of the credit facility.

Amcore said it is and has been current with all payments due under the facility.

The company said as a result of dropping below adequately capitalized levels, its banking unit continues to be prohibited from accepting or renewing brokered deposits and cannot pay excessive interest rates on deposits.

This will impact the bank's liquidity as current brokered deposits mature, it said.

For the third quarter, the company posted a net loss of $156.4 million, or $6.81 a share, compared with a loss of $18 million, or 79 cents a share, a year earlier.

Provisions for loan losses rose 26 percent to $60.3 million and the company recognized a $92 million net tax provision in the quarter.

Amcore said it has not received a formal response from regulators regarding its capital plan.

The company said it continues to implement the plan, including branch sales expected to be completed in November.

Shares of the Rockford, Illinois-based company fell to a low of $0.72 Tuesday morning on Nasdaq, before paring some losses to trade at $0.80.

(Reporting by Jochelle Mendonca in Bangalore; Editing by Himani Sarkar and Unnikrishnan Nair)