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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD  TO
 Commission File Number 0-06136
 CORUS BANKSHARES, INC.
  Minnesota
    
    
    
    41-0823592(State of incorporation or organization)
    
    
    
    (I.R.S. Employer Identification No.)3959 N. Lincoln Ave., Chicago, Illinois
    
    60613-2431
    
    (773) 832-3088(Address of principal executive offices)
    
    (Zip Code)
    
    (Registrants telephone number)
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of exchange on which registeredCommon stock, par value $0.05 per share
    
    NASDAQ
 Yes o No þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ
  Documents Incorporated By Reference




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##### 



TABLE OF CONTENTS
 PART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    18Item 1B. Unresolved Staff Comments
    
    
    27Item 2. Properties
    
    
    27Item 3. Legal Proceedings
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders
    
    
    27PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    28Item 6. Selected Financial Data
    
    
    31Item 7. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    32Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    98Item 8. Financial Statements and Supplementary Data
    
    
    102Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    165Item 9A. Controls and Procedures
    
    
    165Item 9B. Other Information
    
    
    165PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    166Item 11. Executive Compensation
    
    
    167Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    167Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    167Item 14. Principal Accounting Fees and Services
    
    
    167PART IVItem 15. Exhibits, Financial Statement Schedules
    
    
    168Signatures
    
    
    170Exhibit 10.6Exhibit 10.7Exhibit 23Exhibit 31Exhibit 32




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PART I
 
 ITEM 1. BUSINESS
  Recent Developments
     1




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Commercial Real Estate Lending
 Principal Products and Services
       2




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Principal Markets and Methods of Distribution
   3




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Customer Concentrations
  Underwriting Policies and Risk Profile for Each Category of Loans
 ,
 Construction Risk
     4




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Market Risk
 , ,
 Condominium Construction Loans
    Office Loans
    5




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Rental Apartment Loans
  Condominium Conversion Loans
      6




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Personnel and Related Matters
   Deposit Gathering
     7




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8




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Servicing the Check Cashing Industry
  Competition
   Employees
  Supervision and Regulation
 General
   9




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Bank Holding Company Act of 1956, as amended (the Act)
   Source of Strength Doctrine
   10




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Illinois Banking Law
  General Safety and Soundness
    FDIC Deposit Insurance
   11




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Bank Secrecy Act & USA PATRIOT Act
   12




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Capital Adequacy
      13




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Interstate Banking
  Gramm-Leach-Bliley Act of 1999
   Identity Theft Prevention Program
   14




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Dividend Restrictions
    Recent Legal Developments
   15




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Regulatory Actions
    16




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
    
    to establish a compliance committee to monitor and coordinate compliance with the Order within 10
days;
    
    to achieve and maintain Tier 1 capital at least equal to 12% of risk-weighted assets and at least
equal to 9% of adjusted total assets within 120 days;
    
    to develop, within 60 days, a three-year capital plan for the Bank, which shall, among other
things, include specific plans for maintaining adequate capital, a discussion of the sources and
timing of additional capital, as well as contingency plans for alternative sources of capital;
    
    to develop, prior to involvement in any new products or services, or the resumption of commercial
real estate lending, a strategic plan covering at least a three-year period, which shall, among
other things, include a specific description of the goals and objectives to be achieved, the
targeted markets, the specific Bank personnel who are responsible and accountable for the plan, and
the appointment of a Chief Credit Officer;
    
    to develop, within 30 days, a liquidity risk management program, which assesses, on an ongoing
basis, the Banks current and projected funding needs, and ensures that sufficient funds exist to
meet those needs;
    
    to develop, within 90 days, a loan policy, a commercial real estate concentration management
program, a loan review program to ensure the timely and independent identification of problem loans
and a program for the maintenance of an adequate Allowance for Loan and Lease Losses;
    
    to take immediate and continuing action to protect the Banks interest in certain assets
identified by the OCC or any other bank examiner by developing a criticized assets report covering
the entire credit relationship with respect to such assets;
    
    to develop, within 90 days, an independent appraisal review and analysis process to ensure that
appraisals conform to appraisal standards and regulations, and to order, within 30 days following
any event that triggers an appraisal analysis, a current independent appraisal or updated appraisal
on loans secured by certain properties; and
    
    to develop, within 30 days, a revised OREO program to ensure that the OREO properties are managed
in accordance with certain applicable banking regulations.
     17




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Access to Reports
 www.corusbank.com
 Executive Officers
  
 ITEM 1A. RISK FACTORS
  RISKS RELATED TO OUR CURRENT FINANCIAL POSITION
 There is substantial doubt about our ability to continue as a going concern.
    18




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The Bank may be subject to a federal conservatorship or receivership if it cannot comply with the
OCC Order, or if its condition continues to deteriorate.
  The continued deterioration of the housing market and the economy has adversely affected our
business, liquidity and financial results, and if the downturn continues or worsens our ability to
continue as a going concern could be adversely affected.
  We may be subjected to negative publicity that may adversely affect our business, financial
condition, liquidity and results of operations.
  Our decision to defer interest on our Trust Preferred Securities will likely restrict our access to
the debt capital markets until such time as we are current on our interest payments, which will
further limit our sources of liquidity.
   19




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We have become subject to restrictions on the amount of interest that we can pay our customers,
which could cause our deposits to decrease. Because we depend on deposits as a source of
liquidity, a decrease in deposits would adversely affect our ability to continue as a going
concern.
  The Regulatory Agreements generally prohibit Corus and the Bank from paying any dividends or
distributions on our respective equity securities.
  RISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
 Continued deteriorating conditions in the housing market may lead to increased losses on loans.
    20




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Our focus on condominium lending and geographic concentration has adversely affected and could
continue to adversely affect our operations.
  The Regulatory Agreements impose significant restrictions on our operations, and the cost of
compliance, as well as any possible failure to comply, could have a material adverse effect on our
business, financial condition and results of operations.
   We are unable to predict when, and to what extent, we will be able to originate new loans or offer
new products.
  The guarantors of our loans may not be able to provide adequate support.
   21




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Our investment portfolio consists of short-term, unsecured debt and is subject to credit risk.
   Our loan portfolio is subject to construction risk and market risk.
  Tightening lending standards to home purchasers may indirectly adversely affect our results of
operations.
   22




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The slowdown in the residential real estate sector has led to and could continue to lead to
foreclosures, which could adversely affect our results of operations.
  Our Allowance for Credit Losses may prove to be insufficient to absorb potential losses in the loan
portfolio.
  The financial services industry is highly competitive.
  
    
    interest rates and points/fees charged on loans
    
    interest rates paid on deposits
    
    service charges
    
    banking hours
    
    locations including ATM access and
    
    other service-related products.
  Our business is subject to interest rate risk and variations in market interest rates may
negatively affect its financial performance.
   23




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The market spreads impacting our assets and liabilities may not fluctuate in sync with each
other, which could negatively impact our earnings.
  The relative timing of asset and liability repricing may impact our earnings during periods of
rapid increases or decreases in short-term interest rates.
  Our future success depends, in part, on our ability to attract and retain experienced and qualified
personnel.
  We operate in a heavily regulated environment.
   24




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The USA Patriot and Bank Secrecy Acts could create liabilities for us.
  Changes in accounting standards could impact reported earnings.
  Income tax regulations are complex and subject to change.
  We may be unable to realize all or part of our deferred tax asset, which would negatively impact
our net earnings or loss.
  RISKS RELATED TO OUR COMMON STOCK
 Ownership of our outstanding common shares is concentrated in the Glickman Family.
   25




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The price for our common shares is volatile.
  
    
    actual or anticipated variations in our quarterly operating results;
    
    recommendations by securities analysts;
    
    operating and stock price performance of other companies that investors deem comparable
to us;
    
    news reports relating to trends, concerns and other issues in the financial services
industry and the housing market;
    
    changes in government regulations; and
    
    geopolitical conditions such as acts or threats of terrorism or military conflicts.
  If the trading price of our common shares fails to comply with the continued listing requirements
of The Nasdaq Global Market, we would face possible delisting, which would result in a limited
public market for our common shares.
     26




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ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
  
 ITEM 3. LEGAL PROCEEDINGS
    
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   27




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##### Table of Contents



PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
 Price Range of Common Stock
  Year Ended December 31, 2008
    
    
    Year Ended December 31, 2007Fourth
    
    
    Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    FirstQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterStock price rangeHigh
    
    $
    5.23
    
    
    $
    10.58
    
    
    $
    10.55
    
    
    $
    13.16
    
    
    $
    14.32
    
    
    $
    18.00
    
    
    $
    20.00
    
    
    $
    24.72Low
    
    
    0.82
    
    
    
    2.20
    
    
    
    4.00
    
    
    
    8.80
    
    
    
    8.74
    
    
    
    12.42
    
    
    
    15.85
    
    
    
    15.62Close
    
    
    1.11
    
    
    
    4.05
    
    
    
    4.16
    
    
    
    9.73
    
    
    
    10.67
    
    
    
    13.02
    
    
    
    17.26
    
    
    
    17.06Cash dividends declared (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.25
    
    
    
    0.25
    
    
    
    0.25
    
    
    
    1.25
    
    
    
    0.25
 (1)
    
    The Company eliminated the quarterly dividend beginning in the second quarter of
2008. The second quarter of the year ended December 31, 2007, includes a $1.00 per common share
special cash dividend declared June 21, 2007. Approximate Number of Equity Security Holders
  Dividends on Common Stock
    28




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Issuer Purchases of Equity Securities
 (c)
    
    
    (d)(a)
    
    
    (b)
    
    
    Total Number of Shares
    
    
    Maximum Number ofTotal Number
    
    
    Average
    
    
    Purchased as Part of
    
    
    Shares that May Yet Beof Shares
    
    
    Price Paid
    
    
    Publicly Announced
    
    
    Purchased Under thePeriod
    
    Purchased
    
    
    per Share
    
    
    Plans or Programs
    
    
    Plans or ProgramsOctober 1-31, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    3,400,700November 1-30, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    3,400,700December 1-31, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    3,400,700Total
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    3,400,700
    29




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Performance Graph
  
 Dollar Value of Investment at December 312003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008NASDAQ Stock Market (U.S.)
    
    
    $
    100
    
    
    
    $
    109
    
    
    
    $
    111
    
    
    
    $
    122
    
    
    
    $
    132
    
    
    
    $
    64NASDAQ Bank Stocks
    
    
    
    100
    
    
    
    
    114
    
    
    
    
    112
    
    
    
    
    125
    
    
    
    
    99
    
    
    
    
    73Corus Bankshares, Inc.
    
    
    
    100
    
    
    
    
    160
    
    
    
    
    192
    
    
    
    
    163
    
    
    
    
    80
    
    
    
    
    9
  30




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ITEM 6. SELECTED FINANCIAL DATA
 Years Ended December 31
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(dollars in thousands, except per-share data)Condensed Income Statements:Net interest income
    
    $
    93,417
    
    
    $
    286,457
    
    
    $
    340,176
    
    
    $
    248,353
    
    
    $
    150,544Provision for credit losses
    
    
    637,500
    
    
    
    66,000
    
    
    
    7,500
    
    
    
    6,000
    
    
    
    Noninterest income
    
    
    38,898
    
    
    
    18,638
    
    
    
    20,926
    
    
    
    29,254
    
    
    
    52,335Noninterest expense
    
    
    70,597
    
    
    
    75,574
    
    
    
    65,881
    
    
    
    61,322
    
    
    
    56,273Income/(Loss) Before Income Taxes
    
    
    (575,782
    )
    
    
    163,521
    
    
    
    287,721
    
    
    
    210,285
    
    
    
    146,606Income tax expense/(benefit)
    
    
    (119,319
    )
    
    
    57,317
    
    
    
    98,277
    
    
    
    73,056
    
    
    
    48,667Net Income/(Loss)
    
    $
    (456,463
    )
    
    $
    106,204
    
    
    $
    189,444
    
    
    $
    137,229
    
    
    $
    97,939Selected Per-Share Data:(1)Diluted earnings/(loss)
    
    $
    (8.41
    )
    
    $
    1.85
    
    
    $
    3.28
    
    
    $
    2.38
    
    
    $
    1.70Cash dividends declared on common stock (2)
    
    
    0.250
    
    
    
    2.000
    
    
    
    0.900
    
    
    
    0.700
    
    
    
    0.625Book value at year-end
    
    
    5.26
    
    
    
    14.35
    
    
    
    15.01
    
    
    
    12.35
    
    
    
    10.79Market price at year-end
    
    
    1.11
    
    
    
    10.67
    
    
    
    23.07
    
    
    
    28.14
    
    
    
    24.01Averages:Assets
    
    $
    8,856,697
    
    
    $
    9,505,048
    
    
    $
    9,497,310
    
    
    $
    6,648,237
    
    
    $
    4,050,352Loans, net of unearned income
    
    
    4,512,607
    
    
    
    4,066,295
    
    
    
    4,456,799
    
    
    
    3,551,877
    
    
    
    2,461,790Earning assets
    
    
    8,633,463
    
    
    
    9,361,065
    
    
    
    9,350,672
    
    
    
    6,500,689
    
    
    
    3,936,376Deposits
    
    
    7,649,732
    
    
    
    8,138,852
    
    
    
    8,244,985
    
    
    
    5,625,268
    
    
    
    3,184,367Long-term Obligations
    
    
    433,134
    
    
    
    451,220
    
    
    
    389,876
    
    
    
    309,421
    
    
    
    233,045Shareholders equity
    
    
    724,722
    
    
    
    840,125
    
    
    
    759,213
    
    
    
    630,401
    
    
    
    563,446At Year-End:Assets
    
    $
    8,353,488
    
    
    $
    8,926,577
    
    
    $
    10,057,791
    
    
    $
    8,458,740
    
    
    $
    5,017,787Loans, net of unearned income
    
    
    4,052,609
    
    
    
    4,409,387
    
    
    
    4,141,979
    
    
    
    4,524,511
    
    
    
    2,793,828Earning assets
    
    
    7,861,416
    
    
    
    8,754,625
    
    
    
    9,892,946
    
    
    
    6,497,206
    
    
    
    4,926,990Deposits
    
    
    7,592,460
    
    
    
    7,619,682
    
    
    
    8,704,675
    
    
    
    7,265,829
    
    
    
    4,096,816Long-term Obligations
    
    
    410,139
    
    
    
    459,592
    
    
    
    422,329
    
    
    
    377,404
    
    
    
    260,658Shareholders equity
    
    
    282,565
    
    
    
    789,397
    
    
    
    844,527
    
    
    
    689,775
    
    
    
    599,591(Charge-offs)/Recoveries-Commercial Real Estate Loans(3)Charge-offs
    
    $
    (408,623
    )
    
    $
    (40,448
    )
    
    $
    (1,512
    )
    
    $
    
    
    
    $
    Recoveries
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net (Charge-offs)/Recoveries
    
    $
    (408,617
    )
    
    $
    (40,448
    )
    
    $
    (1,512
    )
    
    $
    
    
    
    $
    Significant Ratios:Return on average assets
    
    
    (5.2
    )%
    
    
    1.1
    %
    
    
    2.0
    %
    
    
    2.1
    %
    
    
    2.4
    %Return on average equity
    
    
    (63.0
    )%
    
    
    12.6
    %
    
    
    25.0
    %
    
    
    21.8
    %
    
    
    17.4
    %Efficiency ratio (4)
    
    
    66.1
    %
    
    
    23.4
    %
    
    
    18.4
    %
    
    
    22.9
    %
    
    
    33.5
    %Net interest margin
    
    
    1.1
    %
    
    
    3.1
    %
    
    
    3.7
    %
    
    
    3.9
    %
    
    
    3.9
    %Nonperforming loans/Total loans (5)
    
    
    50.3
    %
    
    
    9.9
    %
    
    
    2.6
    %
    
    
    0.3
    %
    
    
    1.0
    %Allowance for loan losses/NPLs (5)
    
    
    13.2
    %
    
    
    16.3
    %
    
    
    42.4
    %
    
    
    259.0
    %
    
    
    571.8
    %Allowance for loan losses/Total loans
    
    
    6.6
    %
    
    
    1.6
    %
    
    
    1.1
    %
    
    
    0.9
    %
    
    
    1.2
    %Capital Ratios:Tier 1 leverage
    
    
    4.4
    %
    
    
    11.4
    %
    
    
    10.6
    %
    
    
    10.7
    %
    
    
    15.7
    %Tier 1 risk-based capital
    
    
    6.2
    %
    
    
    14.4
    %
    
    
    13.7
    %
    
    
    11.5
    %
    
    
    15.4
    %Total risk-based capital
    
    
    12.3
    %
    
    
    17.6
    %
    
    
    16.3
    %
    
    
    14.4
    %
    
    
    18.5
    %Common Share Data:(1)Weighted average fully diluted shares
    
    
    54,261
    
    
    
    57,265
    
    
    
    57,705
    
    
    
    57,710
    
    
    
    57,636Common shares outstanding at year-end
    
    
    53,711
    
    
    
    55,012
    
    
    
    56,246
    
    
    
    55,849
    
    
    
    55,592
 (1)
    
    Excludes potential common shares for the period ended December 31, 2008 since their inclusion
would result in antidilution.(2)
    
    All amounts have been restated to reflect a 2-for-1 stock split on May 18, 2006.(3)
    
    This section contains charge-off/recovery history for commercial real estate loans only and is
not representative of the total charge-off/recovery history for all loan types.(4)
    
    Total noninterest expense less goodwill amortization/impairment divided by the sum of fully
taxable equivalent net interest income and noninterest income excluding securities gains and losses
and one-time gains on the sale of businesses.(5)
    
    During 2008, the calculation for NPL was adjusted to include Troubled Debt Restructurings. All
prior periods were restated to reflect this adjustment.  31




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ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 BUSINESS SUMMARY
  EXECUTIVE OVERVIEW
       32




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BASIS OF PRESENTATION
  RESULTS OF OPERATIONS
  NET INTEREST INCOME AND NET INTEREST MARGIN
   33




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1) Nonperforming Assets
 2) Market Spreads
    34




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Nonaccrual Loans
     35




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Average Balance Sheets and Net Interest Margin
 2008
    
    
    2007
    
    
    2006Interest,
    
    
    
    
    
    
    
    
    
    
    Interest,
    
    
    
    
    
    
    
    
    
    
    Interest,Average
    
    
    Points & Fees,
    
    
    Yield/
    
    
    Average
    
    
    Points & Fees,
    
    
    Yield/
    
    
    Average
    
    
    Points & Fees,
    
    
    Yield/Years ended December 31
    
    Balance
    
    
    and Dividends
    
    
    Cost
    
    
    Balance
    
    
    and Dividends
    
    
    Cost
    
    
    Balance
    
    
    and Dividends
    
    
    Cost(dollars in thousands)AssetsEarning Assets:Federal funds sold
    
    $
    327,558
    
    
    $
    7,868
    
    
    
    2.40
    %
    
    $
    304,201
    
    
    $
    15,479
    
    
    
    5.09
    %
    
    $
    365,646
    
    
    $
    18,307
    
    
    
    5.01
    %Interest-bearing deposits with the Federal Reserve
    
    
    39,265
    
    
    
    300
    
    
    
    0.76
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Time deposits with banks
    
    
    1,554,867
    
    
    
    46,579
    
    
    
    3.00
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Securities other than equity securities (1)
    
    
    2,167,659
    
    
    
    74,908
    
    
    
    3.46
    %
    
    
    4,803,483
    
    
    
    247,899
    
    
    
    5.16
    %
    
    
    4,332,541
    
    
    
    212,950
    
    
    
    4.92
    %Equity securities (2)
    
    
    31,507
    
    
    
    1,817
    
    
    
    5.77
    %
    
    
    187,086
    
    
    
    9,488
    
    
    
    5.07
    %
    
    
    195,686
    
    
    
    10,064
    
    
    
    5.14
    %Loans, net of unearned income
    
    
    3,359,520
    
    
    
    301,370
    
    
    
    8.97
    %
    
    
    3,849,596
    
    
    
    441,363
    
    
    
    11.47
    %
    
    
    4,444,145
    
    
    
    501,017
    
    
    
    11.27
    %Nonaccrual loans
    
    
    1,153,087
    
    
    
    749
    
    
    
    0.06
    %
    
    
    216,699
    
    
    
    4,859
    
    
    
    2.24
    %
    
    
    12,654
    
    
    
    
    
    
    
    0.00
    %Total Earning Assets
    
    
    8,633,463
    
    
    
    433,591
    
    
    
    5.02
    %
    
    
    9,361,065
    
    
    
    719,088
    
    
    
    7.68
    %
    
    
    9,350,672
    
    
    
    742,338
    
    
    
    7.94
    %Noninterest-earning assets:Cash and due from banksnoninterest-bearing
    
    
    100,076
    
    
    
    
    
    
    
    
    
    
    
    74,780
    
    
    
    
    
    
    
    
    
    
    
    92,625Allowance for loan losses
    
    
    (119,548
    )
    
    
    
    
    
    
    
    
    
    
    (50,520
    )
    
    
    
    
    
    
    
    
    
    
    (41,812
    )Other real estate owned
    
    
    91,498
    
    
    
    
    
    
    
    
    
    
    
    24,405
    
    
    
    
    
    
    
    
    
    
    
    116Premises and equipment, net
    
    
    31,405
    
    
    
    
    
    
    
    
    
    
    
    27,022
    
    
    
    
    
    
    
    
    
    
    
    27,130Other assets, including goodwill
    
    
    119,803
    
    
    
    
    
    
    
    
    
    
    
    68,296
    
    
    
    
    
    
    
    
    
    
    
    68,579Total Assets
    
    $
    8,856,697
    
    
    
    
    
    
    
    
    
    
    $
    9,505,048
    
    
    
    
    
    
    
    
    
    
    $
    9,497,310Liabilities and Shareholders EquityDeposits  interest-bearing:Retail certificates of deposit
    
    $
    5,236,545
    
    
    $
    241,096
    
    
    
    4.60
    %
    
    $
    5,648,976
    
    
    $
    299,130
    
    
    
    5.30
    %
    
    $
    5,380,702
    
    
    $
    260,215
    
    
    
    4.84
    %Money market deposits
    
    
    1,672,161
    
    
    
    63,622
    
    
    
    3.80
    %
    
    
    1,588,554
    
    
    
    75,180
    
    
    
    4.73
    %
    
    
    1,796,627
    
    
    
    83,582
    
    
    
    4.65
    %NOW deposits
    
    
    224,529
    
    
    
    4,243
    
    
    
    1.89
    %
    
    
    263,239
    
    
    
    6,313
    
    
    
    2.40
    %
    
    
    302,259
    
    
    
    7,537
    
    
    
    2.49
    %Brokered certificates of deposit
    
    
    153,704
    
    
    
    5,501
    
    
    
    3.58
    %
    
    
    234,592
    
    
    
    13,646
    
    
    
    5.82
    %
    
    
    318,317
    
    
    
    17,758
    
    
    
    5.58
    %Savings deposits
    
    
    118,747
    
    
    
    590
    
    
    
    0.50
    %
    
    
    126,668
    
    
    
    627
    
    
    
    0.49
    %
    
    
    141,467
    
    
    
    699
    
    
    
    0.49
    %Total Interest-Bearing Deposits
    
    
    7,405,686
    
    
    
    315,052
    
    
    
    4.25
    %
    
    
    7,862,029
    
    
    
    394,896
    
    
    
    5.02
    %
    
    
    7,939,372
    
    
    
    369,791
    
    
    
    4.66
    %Subordinated debentures relating to Trust Preferred Securities
    
    
    404,823
    
    
    
    23,106
    
    
    
    5.71
    %
    
    
    394,648
    
    
    
    30,941
    
    
    
    7.84
    %
    
    
    377,885
    
    
    
    28,547
    
    
    
    7.55
    %Other borrowings(3)
    
    
    28,311
    
    
    
    1,487
    
    
    
    5.25
    %
    
    
    56,572
    
    
    
    4,163
    
    
    
    7.36
    %
    
    
    11,991
    
    
    
    988
    
    
    
    8.24
    %Total Interest-Bearing Liabilities
    
    
    7,838,820
    
    
    
    339,645
    
    
    
    4.33
    %
    
    
    8,313,249
    
    
    
    430,000
    
    
    
    5.17
    %
    
    
    8,329,248
    
    
    
    399,326
    
    
    
    4.79
    %Noninterest-bearing liabilities and shareholders equity:Noninterest-bearing deposits
    
    
    244,046
    
    
    
    
    
    
    
    
    
    
    
    276,823
    
    
    
    
    
    
    
    
    
    
    
    305,613Other liabilities
    
    
    49,109
    
    
    
    
    
    
    
    
    
    
    
    74,851
    
    
    
    
    
    
    
    
    
    
    
    103,236Shareholders equity
    
    
    724,722
    
    
    
    
    
    
    
    
    
    
    
    840,125
    
    
    
    
    
    
    
    
    
    
    
    759,213Total Liabilities and Shareholders Equity
    
    $
    8,856,697
    
    
    
    
    
    
    
    
    
    
    $
    9,505,048
    
    
    
    
    
    
    
    
    
    
    $
    9,497,310Earning assets
    
    $
    8,633,463
    
    
    $
    433,591
    
    
    
    5.02
    %
    
    $
    9,361,065
    
    
    $
    719,088
    
    
    
    7.68
    %
    
    $
    9,350,672
    
    
    $
    742,338
    
    
    
    7.94
    %Interest-bearing liabilities
    
    
    7,838,820
    
    
    
    339,645
    
    
    
    4.33
    %
    
    
    8,313,249
    
    
    
    430,000
    
    
    
    5.17
    %
    
    
    8,329,248
    
    
    
    399,326
    
    
    
    4.79
    %Net Interest Spread
    
    
    
    
    
    $
    93,946
    
    
    
    0.69
    %
    
    
    
    
    
    $
    289,088
    
    
    
    2.51
    %
    
    
    
    
    
    $
    343,012
    
    
    
    3.15
    %Net Interest Margin
    
    
    
    
    
    
    
    
    
    
    1.09
    %
    
    
    
    
    
    
    
    
    
    
    3.09
    %
    
    
    
    
    
    
    
    
    
    
    3.67
    %
 Tax equivalent adjustments are based on a Federal income tax rate of 35%.
 (1)
    
    Interest income on securities includes immaterial tax equivalent adjustments.(2)
    
    Dividends on the equity securities portfolio include a tax equivalent adjustment of
$498,000, $2.6 million, and $2.8 million for 2008, 2007, and 2006, respectively.(3)
    
    Other borrowings include federal funds purchased.  36




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##### Table of Contents



Net Interest Income Volume/Rate Analysis
 2008 compared to 2007
    
    
    2007 compared to 2006Change due to(1)
    
    
    
    
    
    
    Change due to(1)Years Ended December 31
    
    Volume
    
    
    Rate
    
    
    Total
    
    
    Volume
    
    
    Rate
    
    
    Total(in thousands)Federal funds sold
    
    $
    875
    
    
    $
    (8,486
    )
    
    $
    (7,611
    )
    
    $
    (3,101
    )
    
    $
    273
    
    
    $
    (2,828
    )Interest-bearing deposits with the Federal Reserve
    
    
    300
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    Time deposits with banks
    
    
    46,579
    
    
    
    
    
    
    
    46,579
    
    
    
    
    
    
    
    
    
    
    
    Investment securities (2)
    
    
    (120,676
    )
    
    
    (59,986
    )
    
    
    (180,662
    )
    
    
    23,308
    
    
    
    11,065
    
    
    
    34,373Loans, net of unearned income
    
    
    (50,075
    )
    
    
    (89,918
    )
    
    
    (139,993
    )
    
    
    (67,597
    )
    
    
    7,943
    
    
    
    (59,654
    )Nonaccrual loans
    
    
    10,802
    
    
    
    (14,912
    )
    
    
    (4,110
    )
    
    
    2,288
    
    
    
    2,571
    
    
    
    4,859Total (Decrease)/Increase in Interest Income
    
    
    (112,195
    )
    
    
    (173,302
    )
    
    
    (285,497
    )
    
    
    (45,102
    )
    
    
    21,852
    
    
    
    (23,250
    )Retail certificates of deposit
    
    
    (20,414
    )
    
    
    (37,620
    )
    
    
    (58,034
    )
    
    
    13,590
    
    
    
    25,325
    
    
    
    38,915Money market deposits
    
    
    3,569
    
    
    
    (15,127
    )
    
    
    (11,558
    )
    
    
    (9,764
    )
    
    
    1,362
    
    
    
    (8,402
    )NOW deposits
    
    
    (830
    )
    
    
    (1,240
    )
    
    
    (2,070
    )
    
    
    (954
    )
    
    
    (270
    )
    
    
    (1,224
    )Brokered certificates of deposit
    
    
    (3,800
    )
    
    
    (4,345
    )
    
    
    (8,145
    )
    
    
    (4,770
    )
    
    
    658
    
    
    
    (4,112
    )Savings deposits
    
    
    (39
    )
    
    
    2
    
    
    
    (37
    )
    
    
    (73
    )
    
    
    1
    
    
    
    (72
    )Borrowings
    
    
    (1,217
    )
    
    
    (9,294
    )
    
    
    (10,511
    )
    
    
    4,710
    
    
    
    859
    
    
    
    5,569Total (Decrease)/Increase in Interest Expense
    
    
    (22,731
    )
    
    
    (67,624
    )
    
    
    (90,355
    )
    
    
    2,739
    
    
    
    27,935
    
    
    
    30,674Decrease in Net Interest Income
    
    $
    (89,464
    )
    
    $
    (105,678
    )
    
    $
    (195,142
    )
    
    $
    (47,841
    )
    
    $
    (6,083
    )
    
    $
    (53,924
    )
 Tax equivalent adjustments are based on a Federal tax rate of 35%.
 (1)
    
    The net changes attributable to the combined impact of volume and rate have been
allocated equally to both volume and rate.(2)
    
    Includes dividends on equity securities adjusted for the 70% dividend received
deduction and interest income on tax-advantaged securities.  37




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##### Table of Contents



NONINTEREST INCOME
  Noninterest Income
 2008/2007
    
    
    2007/2006Years ended December 31
    
    2008
    
    
    2007
    
    
    2006
    
    
    Change
    
    
    Change(dollars in thousands)Securities gains/(losses), net
    
    $
    26,087
    
    
    $
    4,673
    
    
    $
    6,071
    
    
    
    458.2
    %
    
    
    (23.0
    )%Service charges on deposit accounts
    
    
    9,200
    
    
    
    10,114
    
    
    
    10,961
    
    
    
    (9.0
    )%
    
    
    (7.7
    )%Other
    
    
    3,611
    
    
    
    3,851
    
    
    
    3,894
    
    
    
    (6.2
    )%
    
    
    (1.1
    )%Total Noninterest Income
    
    $
    38,898
    
    
    $
    18,638
    
    
    $
    20,926
    
    
    
    108.7
    %
    
    
    (10.9
    )%Noninterest Income, Excluding Securities
Gains/(losses), Net
    
    $
    12,811
    
    
    $
    13,965
    
    
    $
    14,855
    
    
    
    (8.3
    )%
    
    
    (6.0
    )%
 Securities Gains/(Losses), Net
  Years ended December 31
    
    2008
    
    
    2007
    
    
    2006(in thousands)Gains on equity securities (cash transactions)
    
    $
    25,917
    
    
    $
    18,093
    
    
    $
    Gains on equity securities (stock-for-stock)
    
    
    
    
    
    
    8,761
    
    
    
    7,413Charge for other than temporary impairment
    
    
    
    
    
    
    (22,367
    )
    
    
    (1,453
    )Other
    
    
    170
    
    
    
    186
    
    
    
    111Total Securities Gains/(Losses), net
    
    $
    26,087
    
    
    $
    4,673
    
    
    $
    6,071
 Gains on Equity Securities
  Charge for Other Than Temporary Impairment
   38




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##### Table of Contents



Service Charges on Deposit Accounts
 Other Income
 NONINTEREST EXPENSE
  Noninterest Expense
 2008/2007
    
    
    2007/2006Years ended December 31
    
    2008
    
    
    2007
    
    
    2006
    
    
    Change
    
    
    Change(dollars in thousands)Employee compensation and benefits
    
    $
    23,254
    
    
    $
    44,508
    
    
    $
    45,756
    
    
    
    (47.8
    )%
    
    
    (2.7
    )%Other real estate owned and protective advances
    
    
    15,507
    
    
    
    2,652
    
    
    
    149
    
    
    
    484.7
    %
    
    NMInsurance  FDIC
    
    
    7,337
    
    
    
    3,389
    
    
    
    956
    
    
    
    116.5
    %
    
    
    254.5
    %Net occupancy
    
    
    5,697
    
    
    
    4,463
    
    
    
    3,961
    
    
    
    27.6
    %
    
    
    12.7
    %Depreciation  furniture and equipment
    
    
    2,237
    
    
    
    2,010
    
    
    
    1,838
    
    
    
    11.3
    %
    
    
    9.4
    %Data processing
    
    
    1,827
    
    
    
    2,373
    
    
    
    2,025
    
    
    
    (23.0
    )%
    
    
    17.2
    %Goodwill impairment
    
    
    
    
    
    
    4,523
    
    
    
    
    
    
    
    (100.0
    )%
    
    NAOther expenses
    
    
    14,738
    
    
    
    11,656
    
    
    
    11,196
    
    
    
    26.4
    %
    
    
    4.1
    %Total Noninterest Expense
    
    $
    70,597
    
    
    $
    75,574
    
    
    $
    65,881
    
    
    
    (6.6
    )%
    
    
    14.7
    %Efficiency ratio
    
    
    66.1
    %
    
    
    23.4
    %
    
    
    18.4
    %
 NM
    
    - Not meaningfulNA
    
    - Not applicable
 Employee Compensation and Benefits
  39




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##### Table of Contents



Commercial Loan Officer Commissions
 Years Ended December 31
    
    2008
    
    
    2007
    
    
    2006(in thousands)Salaries(1)
    
    $
    2,515
    
    
    $
    2,407
    
    
    $
    2,667Commissions paid in cash
    
    
    2,804
    
    
    
    6,814
    
    
    
    7,027Commissions held back
    
    
    2,875
    
    
    
    2,055
    
    
    
    3,375Loss sharing/forfeitures
    
    
    (16,473
    )
    
    
    
    
    
    
    S&P 500 holdbacks  mark-to-market
    
    
    (1,223
    )
    
    
    213
    
    
    
    612Treasury note holdbacks  mark-to-market
    
    
    77
    
    
    
    77
    
    
    
    49Total CLO Compensation Expense
    
    $
    (9,425
    )
    
    $
    11,566
    
    
    $
    13,730
 (1)
    
    A portion of salaries are treated as an advance against commissions.       40




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##### Table of Contents



41




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##### Table of Contents



Other Real Estate Owned/Protective Advances
 Insurance  FDIC
 Net Occupancy
 Data Processing
 Other Expenses
  42




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##### Table of Contents



INCOME TAXES
   INFLATION
   43




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##### Table of Contents



FINANCIAL CONDITION
 LOAN PORTFOLIO
 Overview
       44




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##### Table of Contents



Originations
  Reclassifications
  Personnel
   45




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##### Table of Contents



Total Loan Commitments(funded balance + unfunded commitments)December 31
    
    
    December 31(in millions)
    
    2008
    
    
    2007Commercial real estate:Condominium:Construction
    
    $
    4,041
    
    
    $
    6,355Conversion
    
    
    175
    
    
    
    600Inventory
    
    
    49
    
    
    
    66Total condominium
    
    
    4,265
    
    
    
    7,021Other commercial real estate:Office
    
    
    659
    
    
    
    221Rental apartment
    
    
    603
    
    
    
    71Hotel
    
    
    172
    
    
    
    214Other
    
    
    23
    
    
    
    29Loans less than $1 million
    
    
    7
    
    
    
    10Total commercial real estate
    
    
    5,729
    
    
    
    7,566Commercial
    
    
    52
    
    
    
    50Residential real estate and other
    
    
    15
    
    
    
    21Loans, net of unearned income
    
    $
    5,796
    
    
    $
    7,637Mezzanine loans included in
total commercial real estate(1)
    
    $
    48
    
    
    $
    144
 (1)
    
    These loans are all subordinate to Corus first mortgage loans.    46




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##### Table of Contents



Funded Loan BalancesDecember 31
    
    
    December 31(in millions)
    
    2008
    
    
    2007Commercial real estate:Condominium:Construction
    
    $
    2,884
    
    
    $
    3,461Conversion
    
    
    172
    
    
    
    584Inventory
    
    
    49
    
    
    
    64Total condominium
    
    
    3,105
    
    
    
    4,109Other commercial real estate:Rental apartment
    
    
    478
    
    
    
    62Office
    
    
    348
    
    
    
    104Hotel
    
    
    42
    
    
    
    39Other
    
    
    22
    
    
    
    29Loans less than $1 million
    
    
    5
    
    
    
    8Total commercial real estate
    
    
    4,000
    
    
    
    4,351Commercial
    
    
    40
    
    
    
    41Residential real estate and other
    
    
    13
    
    
    
    17Loans, including impacting of unearned
income
    
    $
    4,053
    
    
    $
    4,409Mezzanine loans included in
total commercial real estate (1)
    
    $
    44
    
    
    $
    124
 (1)
    
    These loans are all subordinate to Corus first mortgage loans.   47




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##### Table of Contents



Commercial Real Estate Loan Portfolio By Size
 Total Commitment as of December 31, 2008(1)Total
    
    
    
    
    
    
    
    
    
    
    OtherCondominium
    
    
    Office
    
    
    CRE
    
    
    Total(dollars in millions)
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount$180 million and above
    
    
    2
    (2)
    
    $
    278
    
    
    
    
    
    
    $
    
    
    
    
    
    (2)
    
    $
    90
    
    
    
    2
    
    
    $
    368$140 million to $180 million
    
    
    5
    (2)
    
    
    720
    
    
    
    1
    
    
    
    144
    
    
    
    
    (2)
    
    
    82
    
    
    
    6
    
    
    
    946$100 million to $140 million
    
    
    12
    (2)
    
    
    1,381
    
    
    
    2
    
    
    
    218
    
    
    
    
    (2)
    
    
    44
    
    
    
    14
    
    
    
    1,643$60 million to $100 million
    
    
    8
    
    
    
    635
    
    
    
    3
    
    
    
    239
    
    
    
    4
    
    
    
    271
    
    
    
    15
    
    
    
    1,145$20 million to $60 million
    
    
    24
    
    
    
    914
    
    
    
    1
    
    
    
    58
    
    
    
    7
    
    
    
    258
    
    
    
    32
    
    
    
    1,230$1 million to $20 million
    
    
    34
    
    
    
    337
    
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    53
    
    
    
    42
    
    
    
    390Loans less than $1 million
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NM
    
    
    
    7
    
    
    NM
    
    
    
    7Total
    
    
    85
    
    
    $
    4,265
    
    
    
    7
    
    
    $
    659
    
    
    
    19
    
    
    $
    805
    
    
    
    111
    
    
    $
    5,729
 NM
    
    - Not Meaningful (1)
    
    Includes both funded and unfunded commitments and letters of credit.(2)
    
    As of December 31, 2008, Corus had three loans secured by properties best described
as mixed use. The underlying collateral included a condominium component combined with either a
hotel or apartments. For presentation purposes, the commitment amount has been split between the
appropriate categories. However, with respect to the # of loans, the loans have been included
with condominium loans. Total Commitment as of December 31, 2007(1)Total
    
    
    
    
    
    
    
    
    
    
    OtherCondominium
    
    
    Office
    
    
    CRE
    
    
    Total(dollars in millions)
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount$180 million and above
    
    
    2
    (2)
    
    $
    282
    
    
    
    
    
    
    $
    
    
    
    
    
    (2)
    
    $
    90
    
    
    
    2
    
    
    $
    372$140 million to $180 million
    
    
    13
    
    
    
    1,960
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    1,960$100 million to $140 million
    
    
    16
    
    
    
    1,950
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    1,950$60 million to $100 million
    
    
    11
    
    
    
    864
    
    
    
    2
    
    
    
    163
    
    
    
    1
    
    
    
    90
    
    
    
    14
    
    
    
    1,117$20 million to $60 million
    
    
    39
    
    
    
    1,492
    
    
    
    1
    
    
    
    58
    
    
    
    3
    
    
    
    102
    
    
    
    43
    
    
    
    1,652$1 million to $20 million
    
    
    46
    
    
    
    473
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    32
    
    
    
    52
    
    
    
    505Loans less than $1 million
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NM
    
    
    
    10
    
    
    NM
    
    
    
    10Total
    
    
    127
    
    
    $
    7,021
    
    
    
    3
    
    
    $
    221
    
    
    
    10
    
    
    $
    324
    
    
    
    140
    
    
    $
    7,566
 NM
    
    - Not Meaningful (1)
    
    Includes both funded and unfunded commitments and letters of credit.(2)
    
    As of December 31, 2007, Corus had one loan secured by a property best described as
mixed use. The underlying collateral included a condominium component combined with a hotel.
For presentation purposes, the commitment amount has been split between the appropriate categories.
However, with respect to the # of loans, the loan has been included with condominium loans.  48




---



##### Table of Contents



Commercial Real Estate Loan Portfolio By Major Metropolitan Area
 Total Commitment as of December 31, 2008(1)Total
    
    
    
    
    
    
    
    
    
    
    OtherCondominium
    
    
    Office
    
    
    CRE
    
    
    Total(dollars in millions)
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount
    
    
    #
    
    
    AmountFlorida:Miami/Southeast Florida
    
    
    15
    
    
    $
    1,071
    
    
    
    
    
    
    $
    
    
    
    
    2
    
    
    $
    35
    
    
    
    17
    
    
    $
    1,106Tampa
    
    
    3
    
    
    
    66
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    73
    
    
    
    4
    
    
    
    139Orlando
    
    
    1
    
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    13Other Florida
    
    
    1
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    76
    
    
    
    4
    
    
    
    91Florida Total
    
    
    20
    
    
    
    1,165
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    184
    
    
    
    26
    
    
    
    1,349California:Los Angeles
    
    
    8
    (4)
    
    
    580
    
    
    
    1
    
    
    
    85
    
    
    
    6
    (4)
    
    
    206
    
    
    
    15
    
    
    
    871San Diego
    
    
    5
    
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    106
    
    
    
    7
    
    
    
    196San Francisco
    
    
    1
    (4)
    
    
    72
    
    
    
    
    
    
    
    
    
    
    
    
    (4)
    
    
    44
    
    
    
    1
    
    
    
    116California Total
    
    
    14
    
    
    
    742
    
    
    
    1
    
    
    
    85
    
    
    
    8
    
    
    
    356
    
    
    
    23
    
    
    
    1,183Washington, D.C.(2)
    
    
    5
    
    
    
    136
    
    
    
    6
    
    
    
    574
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    710Atlanta
    
    
    10
    
    
    
    496
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    36
    
    
    
    11
    
    
    
    532Chicago
    
    
    4
    
    
    
    243
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    75
    
    
    
    7
    
    
    
    318Las Vegas
    
    
    7
    
    
    
    313
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    313New York City
    
    
    7
    
    
    
    304
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    304Other(3)
    
    
    18
    (4)
    
    
    866
    
    
    
    
    
    
    
    
    
    
    
    1
    (4)
    
    
    147
    
    
    
    19
    
    
    
    1,013Loans less than $1 million
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NM
    
    
    
    7
    
    
    NM
    
    
    
    7Total
    
    
    85
    
    
    $
    4,265
    
    
    
    7
    
    
    $
    659
    
    
    
    19
    
    
    $
    805
    
    
    
    111
    
    
    $
    5,729
 NM
    
    - Not Meaningful(1)
    
    Includes both funded and unfunded commitments and letters of credit.(2)
    
    Includes northern Virginia and Maryland loans.(3)
    
    Includes 13 metropolitan areas, none of which exceeds three percent of the total.(4)
    
    As of December 31, 2008, Corus had three loans secured by properties best described
as mixed use. The underlying collateral included a condominium component combined with either a
hotel or apartments. For presentation purposes, the commitment amount has been split between the
appropriate categories however with respect to the # of loans, the loans have been included with
condominium loans.    49




---



##### Table of Contents



Commercial
Real Estate Loan Portfolio By Major Metropolitan Area
 Total Commitment as of December 31, 2007(1)Total
    
    
    
    
    
    
    
    
    
    
    OtherCondominium
    
    
    Office
    
    
    CRE
    
    
    Total(dollars in millions)
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount
    
    
    #
    
    
    AmountFlorida:Miami/Southeast Florida
    
    
    21
    
    
    $
    1,908
    
    
    
    
    
    
    $
    
    
    
    
    2
    
    
    $
    41
    
    
    
    23
    
    
    $
    1,949Tampa
    
    
    5
    
    
    
    198
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    198Orlando
    
    
    3
    
    
    
    38
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    38Other Florida
    
    
    6
    
    
    
    320
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    320Florida Total
    
    
    35
    
    
    
    2,464
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    41
    
    
    
    37
    
    
    
    2,505California:Los Angeles
    
    
    11
    (4)
    
    
    685
    
    
    
    
    
    
    
    
    
    
    
    4
    (4)
    
    
    234
    
    
    
    15
    
    
    
    919San Diego
    
    
    11
    
    
    
    344
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    344Sacramento
    
    
    1
    
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    34
    
    
    
    2
    
    
    
    57San Francisco
    
    
    1
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    16California Total
    
    
    24
    
    
    
    1,068
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    268
    
    
    
    29
    
    
    
    1,336Atlanta
    
    
    13
    
    
    
    601
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    601Las Vegas
    
    
    8
    
    
    
    489
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    489New York City
    
    
    7
    
    
    
    473
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    473Washington D.C.(2)
    
    
    7
    
    
    
    168
    
    
    
    3
    
    
    
    221
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    389Chicago
    
    
    6
    
    
    
    296
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    4
    
    
    
    8
    
    
    
    300Other(3)
    
    
    27
    
    
    
    1,462
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    28
    
    
    
    1,463Loans less than $1 million
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NM
    
    
    
    10
    
    
    NM
    
    
    
    10Total
    
    
    127
    
    
    $
    7,021
    
    
    
    3
    
    
    $
    221
    
    
    
    10
    
    
    $
    324
    
    
    
    140
    
    
    $
    7,566
 NM
    
    - Not Meaningful(1)
    
    Includes both funded and unfunded commitments and letters of credit.(2)
    
    Includes northern Virginia and Maryland loans.(3)
    
    No other metropolitan area exceeds three percent of the total.(4)
    
    As of December 31,2007, Corus had one loan secured by a property best described as
mixed use. The underlying collateral included a condominium component combined with a hotel. For
presentation purposes, the commitment amount has been split between the appropriate categories.
However, with respect to the # of loans, the loan has been included with condominium loans.  50




---



##### Table of Contents



Remaining Condominium Units By Major Metropolitan Area
 As of December 31, 2008Expected Completion TimeframeTotal
    
    
    Completed
    
    
    0-6 Months
    
    
    6-12 Months
    
    
    > 12 Months#
    
    
    #
    
    
    #
    
    
    #
    
    
    #Florida:Miami/Southeast Florida
    
    
    3,059
    
    
    
    1,435
    
    
    
    1,278
    
    
    
    346
    
    
    
    Tampa
    
    
    876
    
    
    
    876
    
    
    
    
    
    
    
    
    
    
    
    Orlando
    
    
    147
    
    
    
    147
    
    
    
    
    
    
    
    
    
    
    
    Other Florida
    
    
    47
    
    
    
    47
    
    
    
    
    
    
    
    
    
    
    
    Florida Total
    
    
    4,129
    
    
    
    2,505
    
    
    
    1,278
    
    
    
    346
    
    
    
    California:Los Angeles
    
    
    1,066
    
    
    
    383
    
    
    
    335
    
    
    
    348
    
    
    
    San Diego
    
    
    312
    
    
    
    312
    
    
    
    
    
    
    
    
    
    
    
    San Francisco
    
    
    187
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    187California Total
    
    
    1,565
    
    
    
    695
    
    
    
    335
    
    
    
    348
    
    
    
    187Atlanta
    
    
    1,712
    
    
    
    534
    
    
    
    777
    
    
    
    401
    
    
    
    Las Vegas
    
    
    1,537
    
    
    
    1,196
    
    
    
    341
    
    
    
    
    
    
    
    New York City
    
    
    509
    
    
    
    262
    
    
    
    57
    
    
    
    83
    
    
    
    107Washington, D.C.(1)
    
    
    448
    
    
    
    164
    
    
    
    284
    
    
    
    
    
    
    
    Chicago
    
    
    717
    
    
    
    183
    
    
    
    333
    
    
    
    
    
    
    
    201Other
    
    
    2,834
    
    
    
    1,433
    
    
    
    214
    
    
    
    
    
    
    
    1,187Total
    
    
    13,451
    
    
    
    6,972
    
    
    
    3,619
    
    
    
    1,178
    
    
    
    1,682
 (1)
    
    Includes northern Virginia and Maryland loans.  51




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##### Table of Contents



Unit Sales Associated with Condominium LoansCompleted Projects
    
    
    Projects Under ConstructionUnits
    
    
    
    
    
    
    Units# of
    
    
    Total
    
    
    
    
    
    
    Remaining
    
    
    # of
    
    
    Total
    
    
    
    
    
    
    RemainingLoans
    
    
    Project
    
    
    Closed
    
    
    Presold(1)
    
    
    Not Presold
    
    
    Loans
    
    
    Project
    
    
    Closed
    
    
    Presold(1)
    
    
    Not PresoldFlorida:Miami/Southeast Florida
    
    
    9
    
    
    
    2,533
    
    
    
    1,098
    
    
    
    764
    
    
    
    671
    
    
    
    6
    
    
    
    1,666
    
    
    
    42
    
    
    
    1,220
    
    
    
    404Tampa
    
    
    3
    
    
    
    1,554
    
    
    
    678
    
    
    
    
    
    
    
    876
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Orlando
    
    
    1
    
    
    
    336
    
    
    
    189
    
    
    
    2
    
    
    
    145
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    1
    
    
    
    108
    
    
    
    61
    
    
    
    5
    
    
    
    42
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Florida Total
    
    
    14
    
    
    
    4,531
    
    
    
    2,026
    
    
    
    771
    
    
    
    1,734
    
    
    
    6
    
    
    
    1,666
    
    
    
    42
    
    
    
    1,220
    
    
    
    404California:Los Angeles
    
    
    3
    
    
    
    455
    
    
    
    72
    
    
    
    92
    
    
    
    291
    
    
    
    5
    
    
    
    683
    
    
    
    
    
    
    
    119
    
    
    
    564San Diego
    
    
    5
    
    
    
    873
    
    
    
    561
    
    
    
    22
    
    
    
    290
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    San Francisco
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    187
    
    
    
    
    
    
    
    
    
    
    
    187California Total
    
    
    8
    
    
    
    1,328
    
    
    
    633
    
    
    
    114
    
    
    
    581
    
    
    
    6
    
    
    
    870
    
    
    
    
    
    
    
    119
    
    
    
    751Atlanta
    
    
    6
    
    
    
    949
    
    
    
    415
    
    
    
    23
    
    
    
    511
    
    
    
    4
    
    
    
    1,202
    
    
    
    24
    
    
    
    131
    
    
    
    1,047Las Vegas
    
    
    6
    
    
    
    1,823
    
    
    
    627
    
    
    
    233
    
    
    
    963
    
    
    
    1
    
    
    
    341
    
    
    
    
    
    
    
    216
    
    
    
    125New York City
    
    
    3
    
    
    
    516
    
    
    
    254
    
    
    
    169
    
    
    
    93
    
    
    
    4
    
    
    
    247
    
    
    
    
    
    
    
    21
    
    
    
    226Washington D.C.(2)
    
    
    3
    
    
    
    377
    
    
    
    213
    
    
    
    9
    
    
    
    155
    
    
    
    2
    
    
    
    284
    
    
    
    
    
    
    
    47
    
    
    
    237Chicago
    
    
    2
    
    
    
    452
    
    
    
    269
    
    
    
    9
    
    
    
    174
    
    
    
    2
    
    
    
    534
    
    
    
    
    
    
    
    235
    
    
    
    299Other
    
    
    11
    
    
    
    2,486
    
    
    
    1,053
    
    
    
    197
    
    
    
    1,236
    
    
    
    7
    
    
    
    1,401
    
    
    
    
    
    
    
    233
    
    
    
    1,168Total
    
    
    53
    
    
    
    12,462
    
    
    
    5,490
    
    
    
    1,525
    
    
    
    5,447
    
    
    
    32
    
    
    
    6,545
    
    
    
    66
    
    
    
    2,222
    
    
    
    4,257
 (1)
    
    Represents number of units that are under contract to be sold as of December 31,
2008.(2)
    
    Includes northern Virginia and Maryland loans.   52




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##### Table of Contents



Commercial Real Estate Commitment Rollforward
  2008 Total Commitment(in millions)
    
    1Q
    
    
    2Q
    
    
    3Q
    
    
    4Q
    
    
    Full YearBeginning Total Commitment
    
    $
    7,566
    
    
    $
    7,956
    
    
    $
    7,555
    
    
    $
    6,556
    
    
    $
    7,566Originations(1)Condo Construction
    
    
    321
    
    
    
    176
    
    
    
    
    
    
    
    
    
    
    
    497Condo Inventory
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Hotel
    
    
    
    
    
    
    83
    
    
    
    
    
    
    
    
    
    
    
    83Office
    
    
    450
    (2)
    
    
    72
    
    
    
    
    
    
    
    
    
    
    
    522Rental apartment
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44Originations Total
    
    
    821
    
    
    
    331
    
    
    
    
    
    
    
    
    
    
    
    1,152Paydowns/Payoffs
    
    
    (638
    )(2)
    
    
    (522
    )
    
    
    (617
    )
    
    
    (274
    )
    
    
    (2,051
    )Loan charge-offs
    
    
    (19
    )
    
    
    
    
    
    
    (128
    )
    
    
    (262
    )
    
    
    (409
    )Transfers to OREO
    
    
    (28
    )
    
    
    
    
    
    
    (97
    )
    
    
    (285
    )
    
    
    (410
    )Commitment Letters, net
    
    
    200
    
    
    
    (181
    )
    
    
    (158
    )
    
    
    
    
    
    
    (139
    )Other
    
    
    54
    
    
    
    (29
    )
    
    
    1
    
    
    
    (6
    )
    
    
    20Ending Total Commitment
    
    $
    7,956
    
    
    $
    7,555
    
    
    $
    6,556
    
    
    $
    5,729
    
    
    $
    5,729
 (1)
    
    Originations include commitment increases to existing loans.(2)
    
    Includes a $145 million loan where $78 million of the loan proceeds were used
to pay off an existing Corus loan. Reclassifications
  2008 Reclassifications to Rental Apartment(in millions)
    
    1Q
    
    
    2Q
    
    
    3Q
    
    
    4Q
    
    
    TotalReclassification From:Condominium
Construction
    
    $
    
    
    
    $
    229
    
    
    $
    84
    
    
    $
    132
    
    
    $
    445Condominium Conversion
    
    
    
    
    
    
    150
    
    
    
    
    
    
    
    11
    
    
    
    161Total Reclassifications
    
    $
    
    
    
    $
    379
    
    
    $
    84
    
    
    $
    143
    
    
    $
    606
  53




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##### Table of Contents



Cost overruns
   (dollars in millions)
    
    Cost OverrunsSource
    
    Amount
    
    
    PercentageEquity/Guarantors
    
    $
    165
    
    
    
    39
    %Mezzanine Lenders
    
    
    84
    
    
    
    20
    %Corus
    
    
    95
    
    
    
    22
    %Other
    
    
    49
    
    
    
    12
    %Unidentified
    
    
    31
    
    
    
    7
    %Total
    
    $
    424
    
    
    
    100
    %Total commitment of
construction loans
    
    $
    5,193Overruns as a %
of total commitment
    
    
    8.16
    %
   54




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##### Table of Contents



ASSET QUALITY
 Asset Quality Measures
 As of December 31(dollars in thousands)
    
    2008
    
    
    2007Total Nonperforming Loans (NPLs)
    
    $
    2,036,503
    
    
    $
    436,096Other Real Estate Owned (OREO)
    
    $
    408,987
    
    
    $
    36,951Total Nonperforming Assets (NPLs + OREO)
    
    $
    2,445,490
    
    
    $
    473,047NPLs / Total Loans
    
    
    50.25
    %
    
    
    9.89
    %Potential Problem Loans
    
    $
    1,106,720
    
    
    $
    299,589Allowance for Loan Losses
    
    $
    269,357
    
    
    $
    70,992Allowance for Loan Losses / Total Loans
    
    
    6.65
    %
    
    
    1.61
    %Liability for Credit Commitment Losses
    
    $
    35,550
    
    
    $
    6,000
 Nonperforming Assets
 As of December 31(in thousands)
    
    2008
    
    
    2007NonaccrualCondominium:Construction
    
    $
    1,648,712
    
    
    $
    105,066Conversion
    
    
    136,298
    
    
    
    177,086Inventory
    
    
    44,046
    
    
    
    Total condominium
    
    
    1,829,056
    
    
    
    282,152Other commercial real estate:Rental apartment
    
    
    156,831
    
    
    
    Office
    
    
    39,354
    
    
    
    Total commercial real estate
    
    
    2,025,241
    
    
    
    282,152Commercial
    
    
    846
    
    
    
    28Residential real estate and other
    
    
    
    
    
    
    Total nonaccrual
    
    
    2,026,087
    
    
    
    282,180Loans 90 days or more past due
    
    
    1,707
    
    
    
    463Troubled debt restructurings(1)
    
    
    8,709
    
    
    
    153,453Total Nonperforming Loans
    
    
    2,036,503
    
    
    
    436,096Other real estate owned (OREO)
    
    
    408,987
    
    
    
    36,951Total Nonperforming Assets
    
    $
    2,445,490
    
    
    $
    473,047
 (1)
    
    To the extent not included in either nonaccrual or loans 90 days or more past due.  55




---



##### Table of Contents



Asset Quality Overview
    Nonperforming Assets
   56




---



##### Table of Contents



Nonaccrual Commercial Real Estate Loans
   Nonaccrual Commercial Real Estate Loans as of December 31, 2008Condominium
    
    
    Other CRE
    
    
    TotalFunded
    
    
    Total

    
    
    
    
    
    Funded
    
    
    Total

    
    
    
    
    
    Funded
    
    
    Total(dollars in millions)
    
    #
    
    
    Balance
    
    
    Commitment
    
    
    #
    
    
    Balance
    
    
    Commitment
    
    
    #
    
    
    Balance
    
    
    CommitmentFlorida:Miami
    
    
    12
    
    
    $
    881
    
    
    $
    983
    
    
    
    1
    
    
    $
    29
    
    
    $
    29
    
    
    
    13
    
    
    $
    910
    
    
    $
    1,012Tampa
    
    
    3
    
    
    
    66
    
    
    
    66
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    66
    
    
    
    66Orlando
    
    
    1
    
    
    
    12
    
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    12
    
    
    
    12Other
    
    
    1
    
    
    
    16
    
    
    
    16
    
    
    
    1
    
    
    
    30
    
    
    
    30
    
    
    
    2
    
    
    
    46
    
    
    
    46Florida Total
    
    
    17
    
    
    
    975
    
    
    
    1,077
    
    
    
    2
    
    
    
    59
    
    
    
    59
    
    
    
    19
    
    
    
    1,034
    
    
    
    1,136San Diego
    
    
    4
    
    
    
    90
    
    
    
    90
    
    
    
    1
    
    
    
    46
    
    
    
    46
    
    
    
    5
    
    
    
    136
    
    
    
    136Los Angeles
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    19
    
    
    
    19
    
    
    
    2
    
    
    
    19
    
    
    
    19California Total
    
    
    4
    
    
    
    90
    
    
    
    90
    
    
    
    3
    
    
    
    65
    
    
    
    65
    
    
    
    7
    
    
    
    155
    
    
    
    155Atlanta
    
    
    6
    
    
    
    305
    
    
    
    441
    
    
    
    1
    
    
    
    33
    
    
    
    35
    
    
    
    7
    
    
    
    338
    
    
    
    476Las Vegas
    
    
    4
    
    
    
    205
    
    
    
    220
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    205
    
    
    
    220Phoenix/Scottsdale
    
    
    4
    
    
    
    99
    
    
    
    102
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    99
    
    
    
    102Chicago
    
    
    1
    
    
    
    51
    
    
    
    84
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    51
    
    
    
    84Washington D.C.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    39
    
    
    
    82
    
    
    
    1
    
    
    
    39
    
    
    
    82New York City
    
    
    2
    
    
    
    16
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    16
    
    
    
    16Other
    
    
    3
    
    
    
    88
    
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    88
    
    
    
    90Total
    
    
    41
    
    
    $
    1,829
    
    
    $
    2,120
    
    
    
    7
    
    
    $
    196
    
    
    $
    241
    
    
    
    48
    
    
    $
    2,025
    
    
    $
    2,361
    57




---



##### Table of Contents



Twelve Months EndedDecember 31, 2008Funded
    
    
    Total(dollars in millions)
    
    #
    
    
    Balance
    
    
    CommitmentBeginning Balance
    
    
    9
    
    
    $
    282
    
    
    $
    295Additions
    
    
    51
    
    
    
    2,581
    
    
    
    2,956Subtractions:Loan charge-offs
    
    NA
    
    
    
    (409
    )
    
    
    (409
    )Transferred to OREO
    
    
    (9
    )
    
    
    (400
    )
    
    
    (410
    )Loan paid off
    
    
    (2
    )
    
    
    (16
    )
    
    
    (16
    )Loans returned to
accrual status
    
    
    (1
    )
    
    
    (25
    )
    
    
    (25
    )Balance changes
    
    NA
    

    
    
    12
    
    
    
    (30
    )Balance at December 31, 2008
    
    
    48
    
    
    $
    2,025
    
    
    $
    2,361
 NA
    
    - Not applicable   (in thousands)
    
    2008
    
    
    2007
    
    
    2006Gross amount of interest that would
have been recorded at the original
rate
    
    $
    91,278
    
    
    $
    21,396
    
    
    $
    1,154Interest that was recognized in income
    
    
    749
    
    
    
    4,859
    
    
    
    Negative impact (foregone interest)
    
    $
    90,529
    
    
    $
    16,537
    
    
    $
    1,154
  58




---



##### Table of Contents



Cost Overruns on Nonaccrual Loans
  Loans with Cost OverrunsListed as Nonaccrual as of December 31, 2008As of December 31, 2008Total
    
    
    Funded
    
    
    Amount Funded(dollars in millions)
    
    #
    
    
    Commitment
    
    
    Balance
    
    
    while on NonnaccrualMiami
    
    
    4
    
    
    $
    173
    
    
    $
    172
    
    
    $
    36California:San Diego
    
    
    1
    
    
    
    30
    
    
    
    30
    
    
    
    Los Angeles
    
    
    1
    
    
    
    14
    
    
    
    14
    
    
    
    4California Total
    
    
    2
    
    
    
    44
    
    
    
    44
    
    
    
    4Atlanta
    
    
    1
    
    
    
    5
    
    
    
    5
    
    
    
    Las Vegas
    
    
    2
    
    
    
    81
    
    
    
    77
    
    
    
    15Phoenix/Scottsdale
    
    
    1
    
    
    
    50
    
    
    
    47
    
    
    
    6Houston
    
    
    1
    
    
    
    50
    
    
    
    49
    
    
    
    Total
    
    
    11
    
    
    $
    403
    
    
    $
    394
    
    
    $
    61
  59




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##### Table of Contents



Completion Stages of Projects Associated with Nonaccrual Condominium Loans
  Remaining Nonaccrual Condominium Units Available For Sale By Major Metropolitan Area
 As of December 31, 2008UnitsExpected Completion TimeframeLoans
    
    
    Total
    
    
    Completed
    
    
    0-6 Months
    
    
    6-12 Months
    
    
    > 12 Months#
    
    
    #
    
    
    #
    
    
    #
    
    
    #
    
    
    #Florida:Miami/Southeast
Florida
    
    
    12
    
    
    
    2,685
    
    
    
    1,221
    
    
    
    1,118
    
    
    
    346
    
    
    
    Tampa
    
    
    3
    
    
    
    876
    
    
    
    876
    
    
    
    
    
    
    
    
    
    
    
    Orlando
    
    
    1
    
    
    
    147
    
    
    
    147
    
    
    
    
    
    
    
    
    
    
    
    Other Florida
    
    
    1
    
    
    
    47
    
    
    
    47
    
    
    
    
    
    
    
    
    
    
    
    Florida Total
    
    
    17
    
    
    
    3,755
    
    
    
    2,291
    
    
    
    1,118
    
    
    
    346
    
    
    
    San Diego
    
    
    4
    
    
    
    295
    
    
    
    295
    
    
    
    
    
    
    
    
    
    
    
    Atlanta
    
    
    6
    
    
    
    1,415
    
    
    
    237
    
    
    
    777
    
    
    
    401
    
    
    
    Las Vegas
    
    
    4
    
    
    
    955
    
    
    
    614
    
    
    
    341
    
    
    
    
    
    
    
    Phoenix/Scottsdale
    
    
    4
    
    
    
    372
    
    
    
    372
    
    
    
    
    
    
    
    
    
    
    
    Chicago
    
    
    1
    
    
    
    333
    
    
    
    
    
    
    
    333
    
    
    
    
    
    
    
    New York City
    
    
    2
    
    
    
    118
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    107Other
    
    
    3
    
    
    
    665
    
    
    
    552
    
    
    
    
    
    
    
    
    
    
    
    113Total
    
    
    41
    
    
    
    7,908
    
    
    
    4,372
    
    
    
    2,569
    
    
    
    747
    
    
    
    220
  60




---



##### Table of Contents



Unit Sales of Condominium Projects Associated with Nonaccrual Loans
  Unit Sales Associated with Nonaccrual Condominium LoansCompleted Projects
    
    
    Projects Under ConstructionUnits
    
    
    
    
    
    
    Units# of
    
    
    Total
    
    
    
    
    
    
    Remaining
    
    
    # of
    
    
    Total
    
    
    
    
    
    
    RemainingLoans
    
    
    Project
    
    
    Closed
    
    
    Presold(1)
    
    
    Not Presold
    
    
    Loans
    
    
    Project
    
    
    Closed
    
    
    Presold(1)
    
    
    Not PresoldFlorida:Miami
    
    
    7
    
    
    
    1,711
    
    
    
    490
    
    
    
    631
    
    
    
    590
    
    
    
    5
    
    
    
    1,464
    
    
    
    
    
    
    
    1,134
    
    
    
    330Tampa
    
    
    3
    
    
    
    1,554
    
    
    
    678
    
    
    
    
    
    
    
    876
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Orlando
    
    
    1
    
    
    
    336
    
    
    
    189
    
    
    
    2
    
    
    
    145
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    1
    
    
    
    108
    
    
    
    61
    
    
    
    5
    
    
    
    42
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Florida Total
    
    
    12
    
    
    
    3,709
    
    
    
    1,418
    
    
    
    638
    
    
    
    1,653
    
    
    
    5
    
    
    
    1,464
    
    
    
    
    
    
    
    1,134
    
    
    
    330San Diego
    
    
    4
    
    
    
    554
    
    
    
    259
    
    
    
    19
    
    
    
    276
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Atlanta
    
    
    2
    
    
    
    344
    
    
    
    107
    
    
    
    
    
    
    
    237
    
    
    
    4
    
    
    
    1,202
    
    
    
    24
    
    
    
    131
    
    
    
    1,047Las Vegas
    
    
    3
    
    
    
    802
    
    
    
    188
    
    
    
    194
    
    
    
    420
    
    
    
    1
    
    
    
    341
    
    
    
    
    
    
    
    216
    
    
    
    125Phoenix/Scottsdale
    
    
    4
    
    
    
    520
    
    
    
    148
    
    
    
    93
    
    
    
    279
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Chicago
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    333
    
    
    
    
    
    
    
    144
    
    
    
    189New York City
    
    
    1
    
    
    
    25
    
    
    
    14
    
    
    
    3
    
    
    
    8
    
    
    
    1
    
    
    
    107
    
    
    
    
    
    
    
    
    
    
    
    107Other
    
    
    2
    
    
    
    744
    
    
    
    192
    
    
    
    87
    
    
    
    465
    
    
    
    1
    
    
    
    113
    
    
    
    
    
    
    
    
    
    
    
    113Total
    
    
    28
    
    
    
    6,698
    
    
    
    2,326
    
    
    
    1,034
    
    
    
    3,338
    
    
    
    13
    
    
    
    3,560
    
    
    
    24
    
    
    
    1,625
    
    
    
    1,911
 (1)
    
    Represents number of units that are under contract to be sold as of December 31,
2008.     61




---



##### Table of Contents



Collateral Values Relative to Loan Exposure for Nonaccrual Loans
   Method in whichCurrent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Fair Value DeterminedFunded
    
    
    Fair Value of
    
    
    Collateral Shortfalls
    
    
    Cumulative
    
    
    
    
    
    
    Internal(dollars in millions)
    
    #
    
    
    Balance
    
    
    Collateral
    
    
    (i.e., Specific Reserves)
    
    
    Charge-Offs
    
    
    Appraisal
    
    
    EstimateFlorida:Miami
    
    
    13
    
    
    $
    910
    
    
    $
    1,012
    
    
    $
    60
    
    
    $
    111
    
    
    
    10
    
    
    
    3Tampa
    
    
    3
    
    
    
    66
    
    
    
    66
    
    
    
    
    
    
    
    23
    
    
    
    2
    
    
    
    1Orlando
    
    
    1
    
    
    
    12
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    Other
    
    
    2
    
    
    
    46
    
    
    
    46
    
    
    
    
    
    
    
    26
    
    
    
    1
    
    
    
    1Florida Total
    
    
    19
    
    
    
    1,034
    
    
    
    1,141
    
    
    
    60
    
    
    
    160
    
    
    
    14
    
    
    
    5San Diego
    
    
    5
    
    
    
    136
    
    
    
    158
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    1Los Angeles
    
    
    2
    
    
    
    19
    
    
    
    24
    
    
    
    
    
    
    
    15
    
    
    
    2
    
    
    
    California Total
    
    
    7
    
    
    
    155
    
    
    
    182
    
    
    
    
    
    
    
    15
    
    
    
    6
    
    
    
    1Atlanta
    
    
    7
    
    
    
    338
    
    
    
    394
    
    
    
    69
    
    
    
    4
    
    
    
    4
    
    
    
    3Las Vegas
    
    
    4
    
    
    
    205
    
    
    
    225
    
    
    
    
    
    
    
    112
    
    
    
    4
    
    
    
    Phoenix/Scottsdale
    
    
    4
    
    
    
    99
    
    
    
    103
    
    
    
    
    
    
    
    34
    
    
    
    4
    
    
    
    Chicago
    
    
    1
    
    
    
    51
    
    
    
    67
    
    
    
    11
    
    
    
    
    
    
    
    1
    
    
    
    Washington, D.C.
    
    
    1
    
    
    
    39
    
    
    
    59
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    New York City
    
    
    2
    
    
    
    16
    
    
    
    25
    
    
    
    
    
    
    
    3
    
    
    
    2
    
    
    
    Other
    
    
    3
    
    
    
    88
    
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    Total
    
    
    48
    
    
    $
    2,025
    
    
    $
    2,292
    
    
    $
    140
    
    
    $
    328
    
    
    
    39
    
    
    
    9
   62




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##### Table of Contents



Further details Related to Nonaccrual Loans
   Troubled Debt Restructurings
    63




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##### Table of Contents



Other Real Estate Owned (OREO)
  Other Real Estate Owned as of December 31, 2008CondominiumConstruction
    
    
    Conversion
    
    
    Office
    
    
    Total(dollars in millions)
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount
    
    
    #
    
    
    AmountFlorida:Miami/Southeast Florida
    
    
    1
    
    
    $
    81
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    1
    
    
    $
    81Tampa
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    11Orlando
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    9Panama City
    
    
    1
    
    
    
    97
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    97Florida Total
    
    
    2
    
    
    
    178
    
    
    
    2
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    198California:Los Angeles
    
    
    1
    
    
    
    43
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    43San Diego
    
    
    1
    
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    21California Total
    
    
    2
    
    
    
    64
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    64Reno
    
    
    1
    
    
    
    108
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    108Atlanta
    
    
    1
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    20Phoenix/Scottsdale
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    14Chicago
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    5
    
    
    
    1
    
    
    
    5Total
    
    
    6
    
    
    $
    370
    
    
    
    3
    
    
    $
    34
    
    
    
    1
    
    
    $
    5
    
    
    
    10
    
    
    $
    409
  Foreclosure Process
     64




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##### Table of Contents



1)
    
    First signs of trouble and trying to work with loan sponsors. Depending on the extent of
the problems, this could result in the loan being placed on nonaccrual and/or included as
nonperforming. Some signs of trouble would include slow payments or slow sales of units.2)
    
    Loan experiences a default, with such default not corrected by loan sponsors within a
reasonable period of time. While there are numerous possible events that can give rise to a
default, some of the most common result from failures to: a) make timely payment of principal
and/or interest, b) cover cost overruns, and c) complete the project substantially as agreed.3)
    
    The occurrence of an uncorrected material default would give rise to Corus taking the
following actions  all of which would occur after the identification of a loan default:
 a.
    
    Issuing an official notice of default;b.
    
    Appraisal  Corus ordering an updated appraisal (the receipt of which could
take one to two months after the order has been confirmed with the appraiser);c.
    
    Rating  Corus would review the loans rating, with loans subject to
foreclosure proceedings typically downgraded to a rating of Substandard or worse (if
not already so rated);d.
    
    SFAS 114 Assessment  A loan subject to foreclosure would be deemed impaired
and, as such, would be individually reviewed by Corus for potential SFAS 114 impairment
which could result in the establishment of a specific reserve;e.
    
    Charge-offs  To the extent amounts have not already been charged off, for
loans subject to foreclosure and deemed impaired, Corus would charge-off any
shortfall (as opposed to impaired loans in non-foreclosure situations, where Corus
may establish a specific reserve for the shortfall); andf.
    
    Nonaccrual & Nonperforming Loan Status  Corus general practice is that when a
loan deteriorates such that collection of all principal and interest is no longer
expected, the loan would be placed on nonaccrual. Loans rated Substandard and where
Corus has initiated foreclosure proceedings are typically placed on nonaccrual and thus
become a nonperforming loan.
 4)
    
    Foreclosure completed and OREO asset recorded.
   65




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##### Table of Contents



Frequency of OREO Valuations
  Outlook for Workout and Resolution of OREO Properties
   66




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##### Table of Contents



OREO Projects to be Sold in Bulk as of December 31, 2008(dollars in millions)
    
    
    
    
    
    
    
    
    
    If rented,
    
    
    Carry Value atLocation
    
    Property Type
    
    OREO Date
    
    Total Units
    
    
    Occupancy %
    
    
    12/31/08Los Angeles
    
    Condo - Construction
    
    10/10/2008
    
    
    100
    
    
    NA
    
    
    $
    43Phoenix
    
    Condo - Conversion
    
    10/7/2008
    
    
    186
    
    
    
    40
    %
    
    
    14Tampa
    
    Condo - Conversion
    
    11/14/2008
    
    
    199
    
    
    
    98
    %
    
    
    11Orlando
    
    Condo - Conversion
    
    11/14/2008
    
    
    229
    
    
    
    83
    %
    
    
    9Chicago
    
    Office
    
    12/27/2006
    
    NA
    
    
    NA
    
    
    
    5Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    82
   OREO Projects to be Sold as Individual Units as of December 31, 2008Estimated
    
    
    Estimated(dollars in millions)
    
    
    
    OREO
    
    Completion
    
    
    Cost to
    
    
    Total
    
    
    Units
    
    
    Carry Value atLocation
    
    Property Type
    
    Date
    
    Timeframe
    
    
    Complete
    
    
    Units(1)
    
    
    Sold(1)
    
    
    12/31/08Reno
    
    Condo - Construction
    
    12/29/2008
    
    NA
    
    $
    
    
    
    
    380
    
    
    
    
    
    
    $
    108Panama City
    
    Condo - Construction
    
    9/11/2008
    
    3-6 Months
    
    
    10
    
    
    
    700
    
    
    
    
    
    
    
    97Miami/Southeast Florida
    
    Condo - Construction
    
    11/7/2008
    
    3-6 Months
    
    
    3
    
    
    
    396
    
    
    
    
    
    
    
    81San Diego
    
    Condo - Construction
    
    3/11/2008
    
    1-3 Months
    
    
    10
    
    
    
    180
    
    
    
    27
    
    
    
    21Atlanta
    
    Condo - Construction
    
    12/2/2008
    
    NA
    
    
    
    
    
    
    163
    
    
    
    4
    
    
    
    20Total
    
    
    
    
    
    
    
    
    
    $
    23
    
    
    
    1,819
    
    
    
    31
    
    
    $
    327
 NA
    
    - Not applicable as building is complete.(1)
    
    Represents the total number of units that were taken into OREO. Does not include
units sold by devloper prior to the property becoming OREO.   67




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##### Table of Contents



Loans in Process of ForeclosureFunded Loan Balances as of December 31, 2008CondominiumConstruction
    
    
    Conversion
    
    
    Total(dollars in thousands)
    
    #
    
    
    Amount
    
    
    #
    
    
    Amount
    
    
    #
    
    
    AmountFlorida:Miami
    
    
    3
    
    
    $
    199
    
    
    
    
    
    
    $
    
    
    
    
    3
    
    
    $
    199Tampa
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    48
    
    
    
    2
    
    
    
    48Florida Total
    
    
    3
    
    
    
    199
    
    
    
    2
    
    
    
    48
    
    
    
    5
    
    
    
    247Las Vegas(1)
    
    
    3
    
    
    
    141
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    141Phoenix/Scottsdale(2)
    
    
    1
    
    
    
    39
    
    
    
    2
    
    
    
    12
    
    
    
    3
    
    
    
    51San Diego(3)
    
    
    2
    
    
    
    45
    
    
    
    1
    
    
    
    10
    
    
    
    3
    
    
    
    55Atlanta (4)
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    18
    
    
    
    1
    
    
    
    18New York City
    
    
    1
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    11Other
    
    
    2
    
    
    
    71
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    71Total
    
    
    12
    
    
    $
    506
    
    
    
    6
    
    
    $
    88
    
    
    
    18
    
    
    $
    594
 (1)
    
    Foreclosure of two of the properties completed in February 2009.(2)
    
    Foreclosure of the two of the conversion properties completed in March 2009.(3)
    
    Foreclosure of one of the construction properties completed in January 2009.(4)
    
    Foreclosure of the property completed in March 2009.  68




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##### Table of Contents



Potential Problem Loans
   Potential Problem Loans as of December 31, 2008Condominium  Construction
    
    
    Condominium  Conversion
    
    
    TotalFunded
    
    
    Total
    
    
    
    
    
    
    Funded
    
    
    Total
    
    
    
    
    
    
    Funded
    
    
    Total(dollars in millions)
    
    #
    
    
    Balance
    
    
    Commitment
    
    
    #
    
    
    Balance
    
    
    Commitment
    
    
    #
    
    
    Balance
    
    
    CommitmentFlorida:Miami
    
    
    2
    
    
    $
    37
    
    
    $
    55
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    
    2
    
    
    $
    37
    
    
    $
    55Other Florida
    
    
    1
    
    
    
    56
    
    
    
    74
    
    
    
    1
    
    
    
    11
    
    
    
    11
    
    
    
    2
    
    
    
    67
    
    
    
    85Florida Total
    
    
    3
    
    
    
    93
    
    
    
    129
    
    
    
    1
    
    
    
    11
    
    
    
    11
    
    
    
    4
    
    
    
    104
    
    
    
    140Los Angeles
    
    
    8
    
    
    
    436
    
    
    
    552
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    436
    
    
    
    552Washington, D.C.
    
    
    2
    
    
    
    146
    
    
    
    173
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    146
    
    
    
    173New York
    
    
    3
    
    
    
    83
    
    
    
    140
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    83
    
    
    
    140Las Vegas
    
    
    1
    
    
    
    47
    
    
    
    51
    
    
    
    1
    
    
    
    24
    
    
    
    25
    
    
    
    2
    
    
    
    71
    
    
    
    76Chicago
    
    
    1
    
    
    
    66
    
    
    
    72
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    66
    
    
    
    72Atlanta
    
    
    1
    
    
    
    34
    
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    34
    
    
    
    41Other
    
    
    4
    
    
    
    167
    
    
    
    461
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    167
    
    
    
    461Total
    
    
    23
    
    
    $
    1,072
    
    
    $
    1,619
    
    
    
    2
    
    
    $
    35
    
    
    $
    36
    
    
    
    25
    
    
    $
    1,107
    
    
    $
    1,655
  Twelve Months EndedDecembr 31, 2008Funded
    
    
    Total(dollars in millions)
    
    #
    
    
    Balance
    
    
    CommitmentBeginning Balance
    
    
    8
    
    
    $
    300
    
    
    $
    449Additions
    
    
    43
    
    
    
    1,896
    
    
    
    2,573Subtractions:Became a Nonperforming Loan
    
    
    (16
    )
    
    
    (733
    )
    
    
    (867
    )Became OREO
    
    
    (5
    )
    
    
    (319
    )
    
    
    (341
    )Paid off
    
    
    (1
    )
    
    
    (21
    )
    
    
    (21
    )Status improved
    
    
    (4
    )
    
    
    (80
    )
    
    
    (112
    )Balance changes
    
    NA
    
    
    
    64
    
    
    
    (26
    )Balance at December 31, 2008
    
    
    25
    
    
    $
    1,107
    
    
    $
    1,655
 NA
    
    - Not applicable  69




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##### Table of Contents



Allowance for Credit Losses
   (in thousands)
    
    2008
    
    
    2007Balance at beginning of period
    
    $
    76,992
    
    
    $
    50,793Provision for credit losses
    
    
    637,500
    
    
    
    66,000Charge-offs:Commercial real estate:Condominium:Construction
    
    
    (365,283
    )
    
    
    (7,490
    )Conversion
    
    
    (43,340
    )
    
    
    (32,958
    )Inventory
    
    
    
    
    
    
    Total condominium
    
    
    (408,623
    )
    
    
    (40,448
    )Other commercial real estate
    
    
    
    
    
    
    Commercial
    
    
    (1,361
    )
    
    
    Residential real estate and other
    
    
    (147
    )
    
    
    (179
    )Total Charge-Offs
    
    
    (410,131
    )
    
    
    (40,627
    )Recoveries:Commercial real estate
    
    
    6
    
    
    
    Commercial
    
    
    11
    
    
    
    133Residential real estate and other
    
    
    529
    
    
    
    693Total Recoveries
    
    
    546
    
    
    
    826Balance at December 31
    
    $
    304,907
    
    
    $
    76,992
   70




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##### Table of Contents



December 31(in thousands)
    
    2008
    
    
    2007Allowance for Loan Losses:Specific reserve
    
    $
    140,684
    
    
    $
    13,071General reserve
    
    
    103,174
    
    
    
    54,072Unallocated
    
    
    25,499
    
    
    
    3,849Total Allowance for Loan Losses
    
    
    269,357
    
    
    
    70,992Liability for Credit Commitment Losses(1)
    
    
    35,550
    
    
    
    6,000Total
    
    $
    304,907
    
    
    $
    76,992
 (1)
    
    Included as a component of other liabilities. Allowance for Loan Losses
 1)
    
    Specific ReservesAs of December 31, 2008, Corus Allowance for Loan Losses included specific reserves of $141
million. Management historically used a loan rating system consistent with regulatory
standards of the Office of the Comptroller of the Currency (the OCC). Using this system
in the past, the impairment test was completed for all loans with the following
characteristics: (1) loans which are rated Substandard, Doubtful, or Loss (regulatory
classifications or definitions); (2) loans which are on nonaccrual status; (3) loans which
are 90 days or more past due; and (4) loans determined to be a Troubled Debt
Restructuring. For purposes of determining the appropriate Allowance at December 31, 2008, management
applied additional procedures to identify impaired loans. These additional procedures
included specifically reviewing all commercial real estate loans regardless of regulatory
rating, excluding loans with balances less than $1 million (less than 1% of loan portfolio).
Loans determined to be impaired were segregated from the remainder of the portfolio and
were subjected to a specific review in an effort to determine whether or not a specific
reserve was necessary and, if so, the appropriate amount of that reserveThe loans with specific reserves are primarily rated substandard and/or nonaccrual and are
typically identified through Corus process of reviewing and reassessing the ratings on
loans. The loan rating process is performed by commercial loan personnel. The accuracy of
the loan ratings is validated via a third-party loan review which is performed twice during
the year, the results of which are reported directly to the Companys Audit Committee. The
third-party loan review covers a substantial amount of the portfolio each year.Corus typically measures impairment based on the estimated fair value of the underlying
collateral. If foreclosure is probable though, Corus would always measure impairment based
on the estimated fair value of the collateral.The determination as to whether or not a shortfall exists (and a resulting specific reserve)
is typically dependent on the valuation of the underlying collateral (guarantees, forfeited
earnest money deposits, etc. can supplement the collateral). While Corus uses appraisers to
determine values, internal models are used as well. Valuations based on our internal models
have generally been consistent with the valuations determined by the appraisers
and, as such, management believes the internal valuations can be reasonably relied upon for
valuation purposes.
  71




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##### Table of Contents



Corus internal models generally reflect the value of a project on an as-completed basis.
Therefore, for projects which are not yet complete, Corus must subtract its remaining
unfunded commitment from the as-completed value to arrive at a net collateral value for the
project. In some cases, management may believe that additional funds, above and beyond
Corus unfunded commitment, will be needed to complete the project. In this case, if
management believes that Corus will need to provide these additional funds, these amounts
will be subtracted from the as-completed value as well.Corus then compares its recorded investment (i.e., balance outstanding) in the impaired
loans against the net collateral value securing the project. For those impaired loans where
the net collateral value is less than Corus recorded investment in the loan  what Corus
refers to as a shortfall, Corus will establish a specific reserve in the allowance for
loan losses equal to the shortfall. In general, Corus will maintain specific reserves for
losses that are unconfirmed and record charge-offs for losses that become confirmed.
Subsequent assessments will determine whether to record a charge-off on the loan equal to
the shortfall.If the loan sponsors (borrowers and third-party mezzanine lenders) were providing material
support to Corus loan and/or the project collateralizing the loan, Corus would generally
consider a loss implied by the estimated shortfall on an impaired loan to be unconfirmed,
and thus establish a specific reserve. At the point that loan sponsors cease providing
material support to the loan and/or project, or if Corus believes foreclosure is probable,
then Corus generally would deem the estimated loss to be confirmed and record a charge-off.Collateral values are initially based on an outside independent appraisers valuation
determined at the inception of the loan. After inception, Corus generally arrives at an
estimate of the fair value of the underlying collateral using the lower of appraised value
or internally developed estimates.2)
    
    General ReservesThe general reserve as of December 31, 2008 totaled $103 million, an increase of $49 million
from the end of 2007. The increases are consistent with the negative trends in the
residential for-sale housing and mortgage markets, as reflected in the increased level of
charge-offs and the increase in nonaccrual loans. Nonaccrual loans increased dramatically
during 2008 to $2.0 billion at December 31, 2008, more than seven times the balance at
December 2007.For those loans that were either not specifically reviewed as part of the specific reserve
process or were reviewed but determined not to be impaired, a general reserve is
calculated pursuant to SFAS No. 5 Accounting for Contingencies (SFAS 5). Corus
calculates its general reserve for its portfolio of commercial real estate secured projects,
by separating the portfolio by: (1) collateral type  condominium construction, condominium
conversion, other commercial real estate construction and other commercial real estate
non-construction, (2) seniority of mortgage  first mortgages vs. mezzanine loans (i.e.,
second mortgages), and lastly (3) regulatory rating  Pass, Special Mention, and
Substandard. Corus remaining loans (i.e., commercial, residential, overdrafts and other)
are separated only by loan type (regulatory ratings are not factored in).
  72




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##### Table of Contents



The Company applies a historical net charge-off percentage against each of these subgroups
(i.e., construction first mortgage Pass, construction first mortgage Special Mention,
construction first mortgage Substandard, conversion first mortgage Pass, and first mortgage
Special Mention, etc.) based on their respective historical net charge-offs (to the extent
such charge-offs exist) over the past two years calculated as the sum of net charge-offs by
subgroup divided by the average balances over that time frame.Corus then applies a Management Adjustment Factor (MAF) against the balances outstanding
in each of the aforementioned subgroups. In determining the MAF, Bank management considers
the current economic/credit environment when assessing the adequacy of the allowance for
loan losses (and the associated liability for credit commitments). That is, whether
management believes that current environmental factors are likely to cause the Companys
estimate of inherent losses to differ from its own historical loss experience.Environmental factors considered and impacting the MAF for the year ended December 31, 2008
were as follows:
 Increased Risk Factors
 
    
    Changes in national, regional, and local economic and business conditions
 
    
    Changes in the absolute amount, rate of growth and severity of past due loan,
nonaccrual loans and classified loans
 
    
    Changes in the value of underlying collateral for collateral-dependent loans.
It has become more difficult to predict condominium absorption rates and pricing
and thus aggregate values of condominium buildings.
 
    
    Pricing and sales trends of condominium units
 Flat to Decreasing Risk Factors
 
    
    Changes to any of its lending policies, procedures, underwriting or collections
standards relating to its condominium construction loan portfolio nor to its
charge-off and recovery practices
 
    
    Changes to the nature of Corus loan portfolio other than the decision to
discontinue new originations
 
    
    Changes in the nature and volume of the portfolio and in terms of loans
 
    
    Changes in the experience, ability, and depth of lending management and other
relevant staff
 
    
    Changes in the existence and effect of any concentrations of credit, and changes
in the level of such concentrations
   73




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3)
    
    Unallocated Reserves
    a.
    
    comprised almost entirely of commercial real estate loans;b.
    
    made up of very large and relatively few loans;
 c.
    
    primarily secured by condominium projects that tend to be
geographically concentrated.
 Liability for Credit Commitment Losses
   74




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December 31(in thousands)
    
    2008
    
    
    2007Commercial real estate:Condominium:Construction
    
    $
    229,611
    
    
    $
    46,316Conversion
    
    
    2,462
    
    
    
    20,387Inventory
    
    
    35
    
    
    
    1,035Other commercial real estate:Office
    
    
    3,882
    
    
    
    1,170Rental apartment and other
    
    
    39,709
    
    
    
    1,520Commercial
    
    
    1,406
    
    
    
    2,387Residential real estate and other
    
    
    143
    
    
    
    180Unallocated
    
    
    27,659
    
    
    
    3,997Total
    
    $
    304,907
    
    
    $
    76,992
  Other Factors
  Mezzanine Loans and Relationship with Associated First Mortgage Loans
    75




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Funded Balance as of December 31, 2008First(dollars in millions)
    
    #
    
    
    Mortgage
    
    
    Mezzanine
    
    
    TotalLoans where Corus has
onlythe first mortgage:Nonperforming
    
    
    38
    
    
    $
    1,514
    
    
    NA
    
    
    $
    1,514
    (1)Total
    
    
    100
    
    
    $
    3,477
    
    
    NA
    

    
    $
    3,477% Nonperforming
    
    
    
    
    
    
    44
    %
    
    NA
    
    
    
    44
    %Loans where Corus has
boththe first mortgage
and the mezzanine loan:Nonperforming
    
    
    11
    
    
    $
    479
    
    
    $
    44
    
    
    $
    523
    (1)Total
    
    
    11
    
    
    $
    479
    
    
    $
    44
    
    
    $
    523% Nonperforming
    
    
    
    
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 NA
    
    - Not applicable(1)
    
    Aggregates to total nonperforming loans as of December 31, 2008 of $2,037 million.  Guarantees
  1)
    
    Payment Guarantees
   76




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2)
    
    Completion Guarantees (For construction loans)
  3)
    
    Bad Act Guarantees
  BANK INVESTMENT PORTFOLIO
      77




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EQUITY SECURITY PORTFOLIO
  TAXES RECEIVABLE
   78




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OTHER ASSETS
  Other AssetsDecember 31
    
    
    December 31(in millions)
    
    2008
    
    
    2007Deferred Tax Assets
    
    $
    43
    
    
    $
    21Federal Reserve Bank Stock
    
    
    15
    
    
    
    15Other
    
    
    28
    
    
    
    18Total Other Assets
    
    $
    86
    
    
    $
    54
  COMPOSITION OF DEPOSITS
 2008
    
    
    2007
    
    
    2008/2007 ChangeDecember 31
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(dollars in millions)Retail certificates of deposit
    
    $
    5,247
    
    
    
    69
    %
    
    $
    5,319
    
    
    
    70
    %
    
    $
    (72
    )
    
    
    -1
    %Money market
    
    
    1,719
    
    
    
    23
    
    
    
    1,465
    
    
    
    19
    
    
    
    254
    
    
    
    17Demand
    
    
    208
    
    
    
    3
    
    
    
    254
    
    
    
    3
    
    
    
    (46
    )
    
    
    (18
    )NOW
    
    
    189
    
    
    
    2
    
    
    
    254
    
    
    
    3
    
    
    
    (65
    )
    
    
    (26
    )Brokered certificates of deposit
    
    
    116
    
    
    
    2
    
    
    
    205
    
    
    
    3
    
    
    
    (89
    )
    
    
    (43
    )Savings
    
    
    113
    
    
    
    1
    
    
    
    123
    
    
    
    2
    
    
    
    (10
    )
    
    
    (8
    )Total
    
    $
    7,592
    
    
    
    100
    %
    
    $
    7,620
    
    
    
    100
    %
    
    $
    (28
    )
    
    
    0
    %
   79




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80




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SUBORDINATED DEBENTURES RELATING TO TRUST PREFERRED SECURITIES
        81




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OTHER BORROWINGS
     SHAREHOLDERS EQUITY
  December 31
    
    2008
    
    
    2007(dollars in thousands)Common stock
    
    $
    2,686
    
    
    $
    2,751Surplus
    
    
    35,260
    
    
    
    44,602Equity awards outstanding
    
    
    8,622
    
    
    
    8,215Retained earnings
    
    
    236,703
    
    
    
    713,416Accumulated other comprehensive income/ (loss)
    
    
    (706
    )
    
    
    20,413Total Shareholders Equity
    
    $
    282,565
    
    
    $
    789,397
  82




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83




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LIQUIDITY AND CAPITAL RESOURCES
  SOURCES
 Corus (Holding Company)
        84




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Corus Bank, N.A.
       85




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USES
 Corus (Holding Company)
   86




---



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Corus Bank, N.A.
    REGULATORY CAPITAL AND RATIOS
   87




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88




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Additional Considerations Regarding the Calculation of Regulatory Capital and Ratios
    Concentrations in Commercial Real Estate Lending
    89




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DIVIDEND RESTRICTIONS
   90




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OFF-BALANCE SHEET ARRANGEMENTS
  CONTRACTUAL OBLIGATIONS AND COMMITMENTS
  Payments due by period(in thousands)
    
    Less than
    
    
    
    
    
    
    
    
    
    
    More thanContractual Obligations
    
    1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    5 years
    
    
    TotalCertificates of deposit
    
    $
    5,271,473
    
    
    $
    83,355
    
    
    $
    8,641
    
    
    $
    125
    
    
    $
    5,363,594Deposits without a stated maturity
    
    
    2,228,866
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,228,866Subordinated debentures relating
to
Trust Preferred Securities
    
    
    
    
    
    
    
    
    
    
    4,767
    
    
    
    404,647
    
    
    
    409,414Pension obligations
    
    
    1,156
    
    
    
    2,523
    
    
    
    2,905
    
    
    
    8,573
    
    
    
    15,157Purchase obligations
    
    
    1,715
    
    
    
    3,619
    
    
    
    3,929
    
    
    
    1,759
    
    
    
    11,022Minimum fixed lease obligations
    
    
    793
    
    
    
    1,494
    
    
    
    1,560
    
    
    
    1,725
    
    
    
    5,572Other borrowings
    
    
    725
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    725Total
    
    $
    7,504,728
    
    
    $
    90,991
    
    
    $
    21,802
    
    
    $
    416,829
    
    
    $
    8,034,350
   (in thousands)Unused commitments under lines of credit
    
    $
    1,735,270Standby letters of credit
    
    
    8,813Commitment letters outstanding
    
    
    Total commitments outstanding
    
    $
    1,744,083
  91




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CRITICAL ACCOUNTING POLICIES
  ALLOWANCE FOR CREDIT LOSSES
     92




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FAIR VALUE MEASUREMENTS
   Level 1
 Level 2
 Level 3
  93




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DEFERRED TAX ASSET VALUATION ALLOWANCE
    94




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95




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FORWARD-LOOKING STATEMENTS
 This Annual Report on Form 10-K contains forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by, among other things, the use of forward-looking terms such as
likely, typically, may, intends, expects, believes, anticipates, estimates,
projects, targets, forecasts, seeks, potential, hopeful, or attempts or the negative
of such terms or other variations on such terms or comparable terminology. By their nature, these
statements are subject to risks, uncertainties and other factors, which could cause actual future
results to differ materially from those results expressed or implied by such forward-looking
statements. These risks, uncertainties and other factors include, but are not limited to, the
following:
 
    
    The risk that Corus will not be able to adequately address its current severe liquidity
issues. Corus is no longer originating new loans, and so must rely on payments from existing
loans, an increasing number of which are non-performing or are in danger of becoming
non-performing loans. Corus is unable to raise capital by issuing Trust Preferred Securities
or other similar instruments, may be restricted in the amount of interest it can pay on bank
deposits, which would likely limit the amount of new deposits it can attract, and is unlikely
to receive money through the TARP program. All of these factors, as well as the ones
discussed elsewhere in this Annual Report, could impact Corus ability to continue as a going
concern;
 
    
    The risk that Corus will not be able to develop and implement a capital plan that satisfies
its obligations under the Written Agreement with the Federal Reserve Bank and the Consent
Order with the OCC, the latter of which could result in the OCC forcing a sale or liquidation
of the Bank;
 
    
    The risk that Corus will not be able to satisfy the standards necessary to be considered
well capitalized under the elevated standards contained in the Consent Order. The failure
to do so would, among other things, restrict the amount of interest that the Bank can charge
its customers;
 
    
    The risk that the current crisis in the U.S. residential housing and mortgage market does
not improve or deepens before there is a meaningful recovery. The severe distress in the
housing market is having numerous adverse effects on Corus, including decreased loan
originations, decreased earnings, and deteriorating credit quality trends (as reflected in
nonaccrual loans, charge-offs and loan loss provisions), among other issues. Additional risks
associated with the housing crisis relate to potentially weak sales of condominium units
and/or cancellations of condominium presale contracts, and the adverse impact these events
could have on loan paydowns and collateral valuations;
 
    
    The risk that continued negative publicity regarding our financial position will have an
adverse effect on our operations;
 
    
    The risk that borrowers will not be able to complete the construction of projects in a
timely fashion and/or within budget and, along interrelated lines, the risk that guarantors
will not be able to honor their guarantees in a material fashion, including their completion
guarantees (related to halted projects, cost overruns on projects, etc.);
 
    
    The risk that interest rates could increase and the negative impact such a shift could have
on housing demand and/or values and on our borrowers ability to support the higher interest
rate carry costs on our loans, the vast majority of which bear interest at floating rates;
 
    
    The ability and willingness of borrowers or third-party mezzanine lenders to support
underperforming projects and/or Corus loans secured by those projects;
  96




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
    
    The risk that managements estimate of the adequacy of the allowance for credit losses
could be incorrect;
 
    
    The risk that managements estimate of fair value is incorrect as a result of minimal
activity in the market in which the asset is bought and sold;
 
    
    The risk that Corus will not effectively manage Other Real Estate Owned properties such
that current valuations will not be realized;
 
    
    Risks resulting from Corus numerous areas of concentration, including those relative to
its lending business. Corus loan portfolio is concentrated in numerous respects, among them,
commercial real estate loans which tend to be very large and with a primary focus on financing
residential condominium construction projects (with the projects themselves being relatively
geographically concentrated);
 
    
    The risk that Corus will be unable to attract and retain deposits at pricing that is
cost-effective, particularly in light of the fact that Corus would be restricted as to the
amount of interest it could pay on deposits if it is unable to remain well-capitalized;
 
    
    The risk that deposit insurance costs could increase as a result of the FDICs need to
fortify the insurance fund;
 
    
    The risk that deposit customers withdraw funds in spite of the increased insurance levels;
 
    
    The risk that the currently unusually wide market spreads on Corus deposits decline less
than and/or later than the market spreads on Corus loans and investments;
 
    
    The difficulty of projecting future loan commitments and balances as a result of the
complex interplay of construction loan funding and loan payoffs/paydowns;
 
    
    The risk that Corus loan portfolio will not generate the liquidity needed to fund
outstanding construction commitments;
 
    
    The risk that managements estimates of future taxable income or loss could change such
that estimates of deferred tax asset valuation allowances could increase or decrease
materially;
 
    
    The occurrence of one or more catastrophic events that may directly or indirectly affect
properties securing Corus loans, including, but not limited to, earthquakes, hurricanes, and
acts of terrorism;
 
    
    The risk that the issuers of some of the Banks investments, including its holdings of the
short-term debt issued by several Government Sponsored Enterprises and certificates of deposit
issued by various U.S. banks, could experience credit problems, and the negative financial
implications this could have on Corus results;
 
    
    The risk that regulatory agencies that have authority over the Company or its subsidiaries
may impose restrictions on the Company or its subsidiaries;
 
    
    Corus ability to attract and retain experienced and qualified personnel; and
 
    
    Changes in the accounting policies, laws, regulations, and policies governing financial
services companies.
 Do not unduly rely on forward-looking statements. They give Corus expectations about the future
and are not guarantees. Forward-looking statements speak only as of the date they are made, and,
except as required by law, Corus does not intend to update them to reflect changes that occur after
that date. For a discussion of factors that may cause actual results to differ from expectations,
refer to Part I Item 1A of this Annual Report on Form 10-K . Any factor described in this Annual
Report or in any document referred to in this Annual Report could, by itself or together with one
or more other factors, adversely affect the Companys business, earnings and/or financial
condition.
  97




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 MARKET RISK MANAGEMENT
 INTEREST RATE RISK & ASSET/LIABILITY MANAGEMENT
   GENERAL DESCRIPTION OF INTEREST RATE SENSITIVITY
    98




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DEPOSIT PRICING
    Rate Ramp Amount (1)
    
    -200 bp
    
    
    -100 bp
    
    
    0 bp
    
    
    +100 bp
    
    
    +200 bpPercent change in the next twelve months
net interest income vs. constant ratesDecember 31, 2008
    
    
    n/m
    
    
    
    n/m
    
    
    
    
    
    
    
    (3.5
    )%
    
    
    (5.9
    )%December 31, 2007
    
    
    (13.7
    )%
    
    
    (8.8
    )%
    
    
    
    
    
    
    9.3
    %
    
    
    18.7
    %
 n/m
    
    - Not meaningful(1)
    
    These ramps represent hypothetical gradual and sustained changes from rates as of
December 31, 2007 and December 31, 2008.   100




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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
       Internal Control-Integrated Framework
 
  102




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103




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
    
    pertain to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of the Company;
 
    
    provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles;
 
    
    provide reasonable assurance that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the Company;
 
    
    provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Companys assets that could have a material effect
on the consolidated financial statements.
     
 
   104




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December 31
    
    2008
    
    
    2007(dollars in thousands, except per share data)AssetsCash and due from banks  noninterest-bearing
    
    $
    67,633
    
    
    $
    76,707Interest-bearing deposits with the Federal Reserve
    
    
    141,036
    
    
    
    Federal funds sold
    
    
    100,000
    
    
    
    586,500Cash and Cash Equivalents
    
    
    308,669
    
    
    
    663,207Time deposits with banks
    
    
    1,930,918
    
    
    
    Securities:Available-for-sale, at fair value:U.S. Government agencies (amortized cost $1,621,499 and $3,619,875)
    
    
    1,634,014
    
    
    
    3,618,265Equity securities (cost $0 and $101,981)
    
    
    
    
    
    
    135,981Other securities (amortized cost $3,394 and $3,308)
    
    
    2,839
    
    
    
    4,492Total Securities
    
    
    1,636,853
    
    
    
    3,758,738Loans, net of unearned income
    
    
    4,052,609
    
    
    
    4,409,387Less: Allowance for loan losses
    
    
    269,357
    
    
    
    70,992Loans, net
    
    
    3,783,252
    
    
    
    4,338,395Other real estate owned
    
    
    408,987
    
    
    
    36,951Taxes receivable
    
    
    134,168
    
    
    
    13,378Premises and equipment, net
    
    
    33,284
    
    
    
    26,875Accrued interest receivable
    
    
    31,126
    
    
    
    34,550Other assets
    
    
    86,231
    
    
    
    54,483Total Assets
    
    $
    8,353,488
    
    
    $
    8,926,577Liabilities and Shareholders EquityLiabilities:Deposits:Interest-bearing
    
    $
    7,384,427
    
    
    $
    7,365,205Noninterest-bearing
    
    
    208,033
    
    
    
    254,477Total Deposits
    
    
    7,592,460
    
    
    
    7,619,682Subordinated debentures relating to Trust Preferred Securities
    
    
    409,414
    
    
    
    404,647Other borrowings
    
    
    725
    
    
    
    54,945Accrued interest payable
    
    
    12,892
    
    
    
    17,257Dividends payable
    
    
    
    
    
    
    13,761Other liabilities
    
    
    55,432
    
    
    
    26,888Total Liabilities
    
    
    8,070,923
    
    
    
    8,137,180Shareholders equity:Common stock, $0.05 par value, 130,000,000 shares authorized;
53,710,980 and 55,011,680 shares issued, respectively
    
    
    2,686
    
    
    
    2,751Surplus
    
    
    35,260
    
    
    
    44,602Equity awards outstanding
    
    
    8,622
    
    
    
    8,215Retained earnings
    
    
    236,703
    
    
    
    713,416Accumulated other comprehensive income/(loss)
    
    
    (706
    )
    
    
    20,413Total Shareholders Equity
    
    
    282,565
    
    
    
    789,397Total Liabilities and Shareholders Equity
    
    $
    8,353,488
    
    
    $
    8,926,577
 See accompanying notes.
  105




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Years Ended December 31
    
    2008
    
    
    2007
    
    
    2006(in thousands, except per share data)Interest, Points and Fees, and Dividend IncomeInterest, points and fees on loans
    
    $
    302,119
    
    
    $
    446,221
    
    
    $
    500,973Federal funds sold
    
    
    7,868
    
    
    
    15,479
    
    
    
    18,307Interest-bearing deposits with the Federal Reserve
    
    
    300
    
    
    
    
    
    
    
    Time deposits with banks
    
    
    46,580
    
    
    
    
    
    
    
    Securities:Interest
    
    
    74,875
    
    
    
    247,866
    
    
    
    212,913Dividends
    
    
    1,320
    
    
    
    6,891
    
    
    
    7,309Total Interest, Points and Fees, and Dividend Income
    
    
    433,062
    
    
    
    716,457
    
    
    
    739,502Interest ExpenseDeposits
    
    
    315,052
    
    
    
    394,896
    
    
    
    369,791Subordinated debentures relating to Trust Preferred Securities
    
    
    23,106
    
    
    
    30,941
    
    
    
    28,547Other borrowings
    
    
    1,487
    
    
    
    4,163
    
    
    
    988Total Interest Expense
    
    
    339,645
    
    
    
    430,000
    
    
    
    399,326Net Interest Income
    
    
    93,417
    
    
    
    286,457
    
    
    
    340,176Provision for credit losses
    
    
    637,500
    
    
    
    66,000
    
    
    
    7,500Net Interest Income/(Loss) After Provision for Credit Losses
    
    
    (544,083
    )
    
    
    220,457
    
    
    
    332,676Noninterest IncomeSecurities gains/(losses), net
    
    
    26,087
    
    
    
    4,673
    
    
    
    6,071Service charges on deposit accounts
    
    
    9,200
    
    
    
    10,114
    
    
    
    10,961Other income
    
    
    3,611
    
    
    
    3,851
    
    
    
    3,894Total Noninterest Income
    
    
    38,898
    
    
    
    18,638
    
    
    
    20,926Noninterest ExpenseEmployee compensation and benefits
    
    
    23,254
    
    
    
    44,508
    
    
    
    45,756Other real estate owned and protective advances
    
    
    15,507
    
    
    
    2,652
    
    
    
    149Insurance  FDIC
    
    
    7,337
    
    
    
    3,389
    
    
    
    956Net occupancy
    
    
    5,697
    
    
    
    4,463
    
    
    
    3,961Depreciation  furniture and equipment
    
    
    2,237
    
    
    
    2,010
    
    
    
    1,838Data processing
    
    
    1,827
    
    
    
    2,373
    
    
    
    2,025Goodwill impairment
    
    
    
    
    
    
    4,523
    
    
    
    Other expenses
    
    
    14,738
    
    
    
    11,656
    
    
    
    11,196Total Noninterest Expense
    
    
    70,597
    
    
    
    75,574
    
    
    
    65,881Income/(Loss) Before Income Taxes
    
    
    (575,782
    )
    
    
    163,521
    
    
    
    287,721Income tax expense/(benefit)
    
    
    (119,319
    )
    
    
    57,317
    
    
    
    98,277Net Income/(Loss)
    
    $
    (456,463
    )
    
    $
    106,204
    
    
    $
    189,444Net income/(loss) per common share:Basic
    
    $
    (8.41
    )
    
    $
    1.89
    
    
    $
    3.38Diluted
    
    
    (8.41
    )
    
    
    1.85
    
    
    
    3.28Cash dividends declared per common share
    
    
    0.25
    
    
    
    2.00
    
    
    
    0.90Average common shares outstandingBasic
    
    
    54,261
    
    
    
    56,273
    
    
    
    55,968Diluted
    
    
    54,261
    
    
    
    57,265
    
    
    
    57,705
 See accompanying notes.
  106




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##### Table of Contents



AccumulatedEquity
    
    
    
    
    
    
    OtherCommon
    
    
    
    
    
    
    Awards
    
    
    Retained
    
    
    Comprehensive(dollars in thousands, except per-share data)
    
    Stock
    
    
    Surplus
    
    
    Outstanding
    
    
    Earnings
    
    
    Income
    
    
    TotalBalance at December 31, 2005
    
    $
    2,792
    
    
    $
    25,882
    
    
    $
    7,770
    
    
    $
    609,334
    
    
    $
    43,997
    
    
    $
    689,775Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    189,444
    
    
    
    
    
    
    
    189,444Other comprehensive income:Changes in net unrealized gains on securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,683
    
    
    
    24,683Reclassification adjustment for net gains realized
in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,071
    )
    
    
    (6,071
    )Income tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,331
    )
    
    
    (6,331
    )Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    201,725Adjustment to initially apply FASB Statement No 158-net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,677
    )
    
    
    (1,677
    )Share-based compensation
    
    
    
    
    
    
    
    
    
    
    1,905
    
    
    
    
    
    
    
    
    
    
    
    1,905Shares issued under stock option
plans, 182,260 common shares
    
    
    9
    
    
    
    3,415
    
    
    
    (635
    )
    
    
    
    
    
    
    
    
    
    
    2,789Commisions held back (1)
    
    
    
    
    
    
    1,647
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,647Shares issued under the Commission Program for
Commercial Loan Officers, 314,830 common shares
    
    
    16
    
    
    
    860
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    876Repurchase and retirement of 100,600 common shares
    
    
    (5
    )
    
    
    (21
    )
    
    
    
    
    
    
    (2,061
    )
    
    
    
    
    
    
    (2,087
    )Cash dividends declared on common stock,
$0.90 per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50,426
    )
    
    
    
    
    
    
    (50,426
    )Balance at December 31, 2006
    
    $
    2,812
    
    
    $
    31,783
    
    
    $
    9,040
    
    
    $
    746,291
    
    
    $
    54,601
    
    
    $
    844,527Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106,204
    
    
    
    
    
    
    
    106,204Other comprehensive income:Changes in net unrealized gains on securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,651
    )
    
    
    (48,651
    )Reclassification adjustment for net gains realized
in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,673
    )
    
    
    (4,673
    )Change in net unrealized pension loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    791
    
    
    
    791Income tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,345
    
    
    
    18,345Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72,016Share-based compensation
    
    
    
    
    
    
    
    
    
    
    1,854
    
    
    
    
    
    
    
    
    
    
    
    1,854Shares issued under stock option
plans, 1,009,860 common shares
    
    
    51
    
    
    
    12,222
    
    
    
    (2,660
    )
    
    
    
    
    
    
    
    
    
    
    9,613Stock option expirations
    
    
    
    
    
    
    13
    
    
    
    (19
    )
    
    
    
    
    
    
    
    
    
    
    (6
    )Commisions held back (1)
    
    
    
    
    
    
    1,515
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,515Shares issued under the Commission Program for
Commercial Loan Officers, 94,331 common shares
    
    
    5
    
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72Repurchase and retirement of 2,338,489 common shares
    
    
    (117
    )
    
    
    (998
    )
    
    
    
    
    
    
    (26,108
    )
    
    
    
    
    
    
    (27,223
    )Cash dividends declared on common stock,
$2.00 per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (112,971
    )
    
    
    
    
    
    
    (112,971
    )Balance at December 31, 2007
    
    $
    2,751
    
    
    $
    44,602
    
    
    $
    8,215
    
    
    $
    713,416
    
    
    $
    20,413
    
    
    $
    789,397Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (456,463
    )
    
    
    
    
    
    
    (456,463
    )Other comprehensive income/(loss):Changes in net unrealized gains on securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,473
    
    
    
    4,473Reclassification adjustment for net gains realized
in net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,087
    )
    
    
    (26,087
    )Change in net unrealized pension loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,276
    )
    
    
    (11,276
    )Income tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,771
    
    
    11,771Comprehensive Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (477,582
    )Share-based compensation
    
    
    
    
    
    
    
    
    
    
    1,743
    
    
    
    
    
    
    
    
    
    
    
    1,743Restricted
stock vested, 6,700 shares
    
    
    
    
    
    
    98
    
    
    
    (114
    )
    
    
    
    
    
    
    
    
    
    
    (16
    )Stock option expirations
    
    
    
    
    
    
    794
    
    
    
    (1,222
    )
    
    
    
    
    
    
    
    
    
    
    (428
    )Commisions held back (1)
    
    
    
    
    
    
    2,271
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,271Settlement of commissions previously held back(1)
    
    
    
    
    
    
    (175
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (175
    )Loss sharing(1)
    
    
    
    
    
    
    (11,707
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,707
    )Repurchase and retirement of 1,307,400 common shares
    
    
    (65
    )
    
    
    (623
    )
    
    
    
    
    
    
    (6,488
    )
    
    
    
    
    
    
    (7,176
    )Cash dividends declared on common stock,
$0.25 per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,762
    )
    
    
    
    
    
    
    (13,762
    )Balance at December 31, 2008
    
    $
    2,686
    
    
    $
    35,260
    
    
    $
    8,622
    
    
    $
    236,703
    
    
    $
    (706
    )
    
    $
    282,565
 (1)
    
    Pursuant to the Commission Program for Commercial Loan Officers. See accompanying notes.
  107




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##### Table of Contents



Years Ended December 31
    



    2008
    
    
    2007
    
    
    2006(in thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income/(loss)
    
    $
    (456,463
    )
    
    $
    106,204
    
    
    $
    189,444Adjustments to reconcile net income to net cash used in
operating activities:Provision for credit losses
    
    
    637,500
    
    
    
    66,000
    
    
    
    7,500Goodwill impairment
    
    
    
    
    
    
    4,523
    
    
    
    Depreciation and amortization
    
    
    3,217
    
    
    
    2,757
    
    
    
    2,571Accretion of investment discounts
    
    
    (63,962
    )
    
    
    (231,125
    )
    
    
    (191,012
    )Deferred income tax benefit, net of valuation allowance
    
    
    (10,269
    )
    
    
    (8,199
    )
    
    
    (6,191
    )Deferred interest expense from subordinated debentures relating
to Trust Preferred Securities
    
    
    4,767
    
    
    
    
    
    
    
    Securities (gains)/losses, net
    
    
    (26,087
    )
    
    
    (4,673
    )
    
    
    (6,071
    )Commissions, current year holdback and mark-to-market (1)
    
    
    1,729
    
    
    
    2,345
    
    
    
    4,036Payment of commissions previously held back (1)
    
    
    (276
    )
    
    
    (1,493
    )
    
    
    (1,543
    )Loss sharing/forfeitures (1)
    
    
    (16,473
    )
    
    
    
    
    
    
    Share-based compensation expense
    
    
    1,743
    
    
    
    1,854
    
    
    
    1,905Loss of/(Excess) tax benefits from share-based payment arrangements
    
    
    573
    
    
    
    (2,221
    )
    
    
    (1,884
    )Loss on other real estate owned, net
    
    
    2,028
    
    
    
    233
    
    
    
    Contributions to defined benefit plan
    
    
    (6,000
    )
    
    
    
    
    
    
    (Increase)/Decrease in accrued interest receivable
    
    
    3,424
    
    
    
    8,547
    
    
    
    (5,299
    )Decrease in accrued interest payable
    
    
    (4,365
    )
    
    
    (10,224
    )
    
    
    (3,191
    )Increase in taxes receivable and other assets
    
    
    (128,893
    )
    
    
    (9,157
    )
    
    
    (7
    )Decrease in other liabilities
    
    
    (598
    )
    
    
    (6,997
    )
    
    
    (234
    )Net Cash Used In Operating Activities
    
    
    (58,405
    )
    
    
    (81,626
    )
    
    
    (9,976
    )CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from maturities of time deposits with banks
    
    
    5,075,000
    
    
    
    
    
    
    
    Purchases of time deposits with banks
    
    
    (7,005,918
    )
    
    
    
    
    
    
    Proceeds from maturities of available-for-sale securities
    
    
    5,207,395
    
    
    
    12,066,815
    
    
    
    7,552,746Proceeds from sales of available-for-sale securities
    
    
    840,987
    
    
    
    42,244
    
    
    
    16,128Purchases of available-for-sale securities
    
    
    (3,858,040
    )
    
    
    (10,280,213
    )
    
    
    (9,341,079
    )Net (increase)/decrease in loans
    
    
    (435,252
    )
    
    
    (339,967
    )
    
    
    371,497Recoveries of previously charged-off loans
    
    
    546
    
    
    
    826
    
    
    
    1,193Purchases of premises and equipment
    
    
    (9,626
    )
    
    
    (2,256
    )
    
    
    (3,508
    )Proceeds from sales of other real estate owned
    
    
    17,792
    
    
    
    3,154
    
    
    
    Capitalized expenditures on other real estate owned
    
    
    (9,955
    )
    
    
    
    
    
    
    Net Cash (Used In)/Provided by Investing Activities
    
    
    (177,071
    )
    
    
    1,490,603
    
    
    
    (1,403,023
    )CASH FLOWS FROM FINANCING ACTIVITIES:(Decrease)/Increase in deposit accounts
    
    
    (29,570
    )
    
    
    (1,091,746
    )
    
    
    1,438,846Net proceeds from issuance of subordinated debentures relating
to Trust Preferred Securities
    
    
    
    
    
    
    20,000
    
    
    
    25,000Decrease in federal funds purchased
    
    
    
    
    
    
    
    
    
    
    (41,200
    )(Decrease)/Increase in other borrowings, net
    
    
    (54,220
    )
    
    
    15,526
    
    
    
    17,826Cash proceeds from stock option exercises
    
    
    
    
    
    
    83
    
    
    
    1,658(Loss of)/Excess tax benefits from share-based payment arrangements
    
    
    (573
    )
    
    
    2,221
    
    
    
    1,884Repurchases and retirements of common shares
    
    
    (7,176
    )
    
    
    (19,848
    )
    
    
    (1,963
    )Cash dividends paid on common shares
    
    
    (27,523
    )
    
    
    (113,270
    )
    
    
    (46,139
    )Net Cash (Used In)/Provided by Financing Activities
    
    
    (119,062
    )
    
    
    (1,187,034
    )
    
    
    1,395,912Net (Decrease)/Increase in Cash and Cash Equivalents
    
    
    (354,538
    )
    
    
    221,943
    
    
    
    (17,087
    )Cash and Cash Equivalents at Beginning of Year
    
    
    663,207
    
    
    
    441,264
    
    
    
    458,351Cash and Cash Equivalents at End of Year
    
    $
    308,669
    
    
    $
    663,207
    
    
    $
    441,264
 (1)
    
    Pursuant to the Commission Program for Commercial Loan Officers. See accompanying notes.
  108




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##### Table of Contents



NOTE 1
 REGULATORY ACTIONS, LIQUIDITY, AND GOING CONCERN CONSIDERATIONS
   REGULATORY ACTIONS
 Written Agreement
   109




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##### Table of Contents



CONSENT ORDER
  
    
    to establish a compliance committee to monitor and coordinate compliance with the Order;
 
    
    to achieve and maintain Tier 1 capital at least equal to 9% of adjusted total assets and at
least equal to 12% of risk-weighted assets by June 18, 2009;
 
    
    to develop a three-year capital plan for the Bank by April 19, 2009, which shall, among other
things, include specific plans to for maintaining adequate capital, a discussion of the
sources and timing of additional capital, as well as contingency plans for alternative sources
of capital;
 
    
    to develop, prior to involvement in any new products or services, or the resumption of
commercial real estate lending, a strategic plan covering at least a three-year period, which
shall, among other things, include a specific description of the goals and objectives to be
achieved, the targeted markets, the specific Bank personnel who are responsible and
accountable for the plan, and the appointment of a Chief Credit Officer;
 
    
    to revise and maintain by March 20, 2009, a liquidity risk management program, which
assesses, on an ongoing basis, the Banks current and projected funding needs, and ensures
that sufficient funds exist to meet those needs. The Plan must include specific plans for how
the Bank plans to comply with regulatory restrictions which limit the interest rates the Bank
can offer to depositors;
 
    
    to revise by May 19, 2009, the Banks loan policy and commercial real estate concentration
management program. The Bank also must establish a new loan review program to ensure the
timely and independent identification of problem loans and modify its existing program for the
maintenance of an adequate allowance for loan and lease losses;
 
    
    to take immediate and continuing action to protect the Banks interest in certain assets
identified by the OCC or any other bank examiner by developing a criticized assets report
covering the entire credit relationship with respect to such assets;
 
    
    to develop by May 19, 2009, an independent appraisal review and analysis process to ensure
that appraisals conform to appraisals standards and regulations, and to order, within 30 days
following any event that triggers an appraisal analysis, a current independent appraisal or
updated appraisal on loans secured by certain properties; and
 
    
    to develop by March 20, 2009, a revised Other Real Estate Owned (OREO) program to ensure
that the OREO properties are managed in accordance with certain applicable banking
regulations.
 LIQUIDITY
   110




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##### Table of Contents



111




---



##### Table of Contents



GOING CONCERN
     NOTE 2
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   112




---



##### Table of Contents



PRINCIPLES OF CONSOLIDATION
     SEGMENT REPORTING
  CASH AND CASH EQUIVALENTS
  TIME DEPOSITS WITH BANKS
    113




---



##### Table of Contents



SECURITIES
       LOANS
   114




---



##### Table of Contents



Nonaccrual Loans
  Impaired Loans
   ALLOWANCE FOR CREDIT LOSSES
   115




---



##### Table of Contents



PREMISES AND EQUIPMENT
   116




---



##### Table of Contents



OTHER REAL ESTATE OWNED
    DERIVATIVES
     117




---



##### Table of Contents



DEFINED BENEFIT PLAN
  EQUITY COMPENSATION PLANS
      118




---



##### Table of Contents



COMMERCIAL LOAN OFFICER COMMISSION PROGRAM
       119




---



##### Table of Contents



INCOME TAXES
    RECLASSIFICATIONS
   120




---



##### Table of Contents



NOTE 3
 RECENT ACCOUNTING PRONOUNCEMENTS
 SFAS 157  FAIR VALUE MEASUREMENTS
  EFFECTIVE DATE OF FASB STATEMENT NO. 157
  DETERMINING THE FAIR VALUE OF A FINANCIAL ASSET IN A MARKET THAT IS NOT ACTIVE
  SFAS 159  THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND FINANCIAL LIABILITIES
   121




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##### Table of Contents



SFAS 141 (REVISED 2007)  BUSINESS COMBINATIONS
  EMPLOYERS DISCLOSURES ABOUT POSTRETIRMENT BENEFIT PLAN ASSETS
  DETERMINING WHETHER INSTRUMENTS GRANTED IN SHARE-BASED PAYMENT TRANSACTIONS ARE PARTICIPATING
SECURITIES
  HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
  DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
   122




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##### Table of Contents



NOTE 4
 SECURITIES
  Amortized
    
    
    Gross Unrealized
    
    
    FairDecember 31, 2008
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Value(in thousands)U.S. Government agencies
    
    $
    1,621,499
    
    
    $
    12,515
    
    
    $
    
    
    
    $
    1,634,014Other
    
    
    3,394
    
    
    
    1
    
    
    
    (556
    )
    
    
    2,839Total
    
    $
    1,624,893
    
    
    $
    12,516
    
    
    $
    (556
    )
    
    $
    1,636,853
 Amortized
    
    
    Gross Unrealized
    
    
    FairDecember 31, 2007
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Value(in thousands)U.S. Government agencies
    
    $
    3,619,875
    
    
    $
    213
    
    
    $
    (1,823
    )
    
    $
    3,618,265Equity securities
    
    
    101,981
    
    
    
    39,045
    
    
    
    (5,045
    )
    
    
    135,981Other
    
    
    3,308
    
    
    
    1,184
    
    
    
    
    
    
    
    4,492Total
    
    $
    3,725,164
    
    
    $
    40,442
    
    
    $
    (6,868
    )
    
    $
    3,758,738
  Less than 12 Months
    
    
    More than 12 Months
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedDecember 31, 2008
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses(in thousands)Other
    
    $
    2,817
    
    
    $
    556
    
    
    $
    
    
    
    $
    
    
    
    $
    2,817
    
    
    $
    556Total
    
    $
    2,817
    
    
    $
    556
    
    
    $
    
    
    
    $
    
    
    
    $
    2,817
    
    
    $
    556
 Less than 12 Months
    
    
    More than 12 Months
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedDecember 31, 2007
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses(in thousands)U.S. Government agencies
    
    $
    3,045,449
    
    
    $
    1,823
    
    
    $
    
    
    
    $
    
    
    
    $
    3,045,449
    
    
    $
    1,823Equity securities
    
    
    20,041
    
    
    
    5,045
    
    
    
    
    
    
    
    
    
    
    
    20,041
    
    
    
    5,045Total
    
    $
    3,065,490
    
    
    $
    6,868
    
    
    $
    
    
    
    $
    
    
    
    $
    3,065,490
    
    
    $
    6,868
  123




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December 31, 2008
    
    Amortized Cost
    
    
    Fair Value(in thousands)Due in:One year or less
    
    $
    1,621,499
    
    
    $
    1,634,014Securities not due at a single maturity
    
    
    3,394
    
    
    
    2,839Total
    
    $
    1,624,893
    
    
    $
    1,636,853
    124




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##### Table of Contents



NOTE 5
 LOANS
  December 31
    
    2008
    
    

2007(in millions)Commercial real estate:Condominium:Construction
    
    $
    2,884
    
    
    $
    3,461Conversion
    
    
    172
    
    
    
    584Inventory
    
    
    49
    
    
    
    64Total Condominium
    
    
    3,105
    
    
    
    4,109Other commercial real estate:Rental Apartment
    
    
    478
    
    
    
    62Office
    
    
    348
    
    
    
    104Hotel
    
    
    42
    
    
    
    39Other
    
    
    22
    
    
    
    29Loans less than $1 million
    
    
    5
    
    
    
    8Total commercial real estate
    
    
    4,000
    
    
    
    4,351Commercial
    
    
    40
    
    
    
    41Residential real estate and other
    
    
    13
    
    
    
    17Loans, net of unearned income
    
    $
    4,053
    
    
    $
    4,409Mezzanine loans included in
total commercial real estate (1)
    
    $
    44
    
    
    $
    124
 (1)
    
    These loans are all subordinate to Corus first mortgage loans.    125




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##### Table of Contents



COMMERCIAL REAL ESTATE LOAN PORTFOLIO BY COLLATERAL TYPE
 2008
    
    
    2007(dollars in millions)
    
    
    
    
    
    Funded Balance
    
    
    Total Commitment(1)
    
    
    
    
    
    
    Funded Balance
    
    
    Total Commitment(1)December 31
    
    #
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Condominium:Construction
    
    
    70
    
    
    $
    2,884
    
    
    
    72
    %
    
    $
    4,041
    
    
    
    71
    %
    
    
    88
    
    
    $
    3,461
    
    
    
    80
    %
    
    $
    6,355
    
    
    
    84
    %Conversion
    
    
    13
    
    
    
    172
    
    
    
    4
    
    
    
    175
    
    
    
    3
    
    
    
    36
    
    
    
    584
    
    
    
    14
    
    
    
    600
    
    
    
    8Inventory
    
    
    2
    
    
    
    49
    
    
    
    1
    
    
    
    49
    
    
    
    1
    
    
    
    3
    
    
    
    64
    
    
    
    1
    
    
    
    66
    
    
    
    1Condominium Total
    
    
    85
    
    
    
    3,105
    
    
    
    77
    
    
    
    4,265
    
    
    
    75
    
    
    
    127
    
    
    
    4,109
    
    
    
    95
    
    
    
    7,021
    
    
    
    93Rental Apartment
    
    
    14
    (2)
    
    
    478
    
    
    
    12
    
    
    
    603
    
    
    
    11
    
    
    
    3
    
    
    
    62
    
    
    
    1
    
    
    
    71
    
    
    
    1Office
    
    
    7
    
    
    
    348
    
    
    
    9
    
    
    
    659
    
    
    
    11
    
    
    
    3
    
    
    
    104
    
    
    
    2
    
    
    
    221
    
    
    
    3Hotel
    
    
    
    (2)
    
    
    42
    
    
    
    1
    
    
    
    172
    
    
    
    3
    
    
    
    2
    
    
    
    39
    
    
    
    1
    
    
    
    214
    
    
    
    3Other
    
    
    5
    
    
    
    22
    
    
    
    1
    
    
    
    23
    
    
    
    
    
    
    
    5
    
    
    
    29
    
    
    
    1
    
    
    
    29
    
    
    
    Loans less than $1
million
    
    NM
    
    
    
    5
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    NM
    
    
    
    8
    
    
    
    
    
    
    
    10
    
    
    
    Total
    
    
    111
    
    
    $
    4,000
    
    
    
    100
    %
    
    $
    5,729
    
    
    
    100
    %
    
    
    140
    
    
    $
    4,351
    
    
    
    100
    %
    
    $
    7,566
    
    
    
    100
    %
 NM
    
    - Not Meaningful(1)
    
    Includes both funded and unfunded commitments, letters of credit, and outstanding
commitment letters.(2)
    
    As of December 31,2008, Corus had three loans secured by properties best described
as mixed use. The underlying collateral included a condominium component combined with
either a hotel or apartments. for presentation purposes, the balance and commitment amount
have been split between the appropriate categories. However, with respect to the # of loans,
the loans have been included with condominium loans.   126




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2008
    
    
    2007Funded
    
    
    Total
    
    
    
    
    
    
    Funded
    
    
    TotalBalance
    
    
    Commitment(1)
    
    
    
    
    
    
    Balance
    
    
    Commitment(1)(dollars in millions)
    
    #
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Florida:Miami/Southeast Florida
    
    
    17
    
    
    $
    973
    
    
    
    24
    %
    
    $
    1,106
    
    
    
    19
    %
    
    
    23
    
    
    $
    1,330
    
    
    
    31
    %
    
    $
    1,949
    
    
    
    26
    %Tampa
    
    
    4
    
    
    
    121
    
    
    
    3
    
    
    
    139
    
    
    
    2
    
    
    
    5
    
    
    
    114
    
    
    
    2
    
    
    
    198
    
    
    
    2Orlando
    
    
    1
    
    
    
    13
    
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    3
    
    
    
    38
    
    
    
    1
    
    
    
    38
    
    
    
    1Other Florida
    
    
    4
    
    
    
    79
    
    
    
    2
    
    
    
    91
    
    
    
    2
    
    
    
    6
    
    
    
    280
    
    
    
    6
    
    
    
    320
    
    
    
    4Florida Total
    
    
    26
    
    
    
    1,186
    
    
    
    29
    
    
    
    1,349
    
    
    
    23
    
    
    
    37
    
    
    
    1,762
    
    
    
    40
    
    
    
    2,505
    
    
    
    33California:Los Angeles
    
    
    15
    
    
    
    619
    
    
    
    15
    %
    
    
    871
    
    
    
    15
    %
    
    
    15
    
    
    
    368
    
    
    
    8
    %
    
    
    919
    
    
    
    12
    %San Diego
    
    
    7
    
    
    
    196
    
    
    
    5
    
    
    
    196
    
    
    
    4
    
    
    
    11
    
    
    
    305
    
    
    
    7
    
    
    
    344
    
    
    
    4Sacramento
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    53
    
    
    
    1
    
    
    
    57
    
    
    
    1San Francisco
    
    
    1
    
    
    
    27
    
    
    
    1
    
    
    
    116
    
    
    
    2
    
    
    
    1
    
    
    
    15
    
    
    
    1
    
    
    
    16
    
    
    
    1California Total:
    
    
    23
    
    
    
    842
    
    
    
    21
    
    
    
    1,183
    
    
    
    21
    
    
    
    29
    
    
    
    741
    
    
    
    17
    
    
    
    1,336
    
    
    
    18Washington D.C. (2)
    
    
    11
    
    
    
    386
    
    
    
    10
    %
    
    
    710
    
    
    
    12
    %
    
    
    10
    
    
    
    219
    
    
    
    5
    %
    
    
    389
    
    
    
    5
    %Atlanta
    
    
    11
    
    
    
    388
    
    
    
    10
    
    
    
    532
    
    
    
    9
    
    
    
    13
    
    
    
    192
    
    
    
    4
    
    
    
    601
    
    
    
    8Chicago
    
    
    7
    
    
    
    152
    
    
    
    4
    
    
    
    318
    
    
    
    6
    
    
    
    8
    
    
    
    127
    
    
    
    3
    
    
    
    300
    
    
    
    4Las Vegas
    
    
    7
    
    
    
    292
    
    
    
    7
    
    
    
    313
    
    
    
    5
    
    
    
    8
    
    
    
    361
    
    
    
    9
    
    
    
    489
    
    
    
    6New York City
    
    
    7
    
    
    
    231
    
    
    
    6
    
    
    
    304
    
    
    
    6
    
    
    
    7
    
    
    
    280
    
    
    
    6
    
    
    
    473
    
    
    
    6Other (3)
    
    
    19
    
    
    
    518
    
    
    
    13
    
    
    
    1,013
    
    
    
    18
    
    
    
    28
    
    
    
    661
    
    
    
    16
    
    
    
    1,463
    
    
    
    20Loans less than $1 million
    
    NM
    
    
    
    5
    
    
    
    
    
    
    
    7
    
    
    NM
    
    
    NM
    
    
    
    8
    
    
    
    
    
    
    
    10
    
    
    
    Total
    
    
    111
    
    
    $
    4,000
    
    
    
    100
    %
    
    $
    5,729
    
    
    
    100
    %
    
    
    140
    
    
    $
    4,351
    
    
    
    100
    %
    
    $
    7,566
    
    
    
    100
    %
 NM
    
    - Not Meaningful(1)
    
    Includes both funded and unfunded commitments, letters of credit, and outstanding
commitment letters.(2)
    
    Includes northern Virginia and Maryland Loans.(3)
    
    No other metropolitan area exceeds three percent of the total. ALLOWANCE FOR CREDIT LOSSES
    (in thousands)
    
    2008
    
    
    2007
    
    
    2006Balance at January 1
    
    $
    76,992
    
    
    $
    50,793
    
    
    $
    44,740Provision for credit losses
    
    
    637,500
    
    
    
    66,000
    
    
    
    7,500Charge-offs
    
    
    (410,131
    )
    
    
    (40,627
    )
    
    
    (2,640
    )Recoveries
    
    
    546
    
    
    
    826
    
    
    
    1,193Balance at December 31
    
    $
    304,907
    
    
    $
    76,992
    
    
    $
    50,793
  127




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December 31
    
2008
    
    
    2007
    
    
    2006(in thousands)Allowance for Loan Losses
    
    $
    269,357
    
    
    $
    70,992
    
    
    $
    45,293Liability for Credit Commitment Losses(1)
    
    
    35,550
    
    
    
    6,000
    
    
    
    5,500Total
    
    $
    304,907
    
    
    $
    76,992
    
    
    $
    50,793
 (1)
    
    Included as a component of other liabilities. IMPAIRED LOANS
   Outstanding Balance of Impaired Loans(1)December 31
    
    
    December 31(in millions)
    
    2008
    
    
    2007Loans with a specific reserve
    
    $
    645
    
    
    $
    138Loans with no specific reserve, but with
an associated charge-off
    
    
    688
    
    
    
    63Loans with no specific reserve and
no associated charge-off (2)
    
    
    702
    
    
    
    237Total Impaired Loans
    
    $
    2,035
    
    
    $
    438Specific reserve on impaired loans
    
    $
    141
    
    
    $
    13
 (1)
    
    To the extent that Corus has both a first mortgage and a mezzanine loan associated
with the same project, the loans are combined for purposes of the above table.(2)
    
    Includes $9 million and $153 million as of December 31, 2008 and 2007, respectively,
that are included solely due to the loans being classified as troubled debt restructurings.   128




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December 31(in thousands)
    
    2008
    
    
    2007
    
    
    2006Gross amount of interest that would have
been recorded at the original rate
    
    $
    91,278
    
    
    $
    21,396
    
    
    $
    1,154Interest that was recognized in income
    
    
    749
    
    
    
    4,859
    
    
    
    Negative impact (foregone interest)
    
    $
    90,529
    
    
    $
    16,537
    
    
    $
    1,154
  NOTE 6
 OTHER REAL ESTATE OWNED
   2008
    
    
    2007(dollars in thousands)
    
    #
    
    
    Amount
    
    
    #
    
    
    AmountFlorida:Miami
    
    
    1
    
    
    $
    80,906
    
    
    
    1
    
    
    $
    31,948Tampa
    
    
    1
    
    
    
    11,216
    
    
    
    
    
    
    
    Orlando
    
    
    1
    
    
    
    8,627
    
    
    
    
    
    
    
    Panama City
    
    
    1
    
    
    
    96,788
    
    
    
    
    
    
    
    Florida Total
    
    
    4
    
    
    
    197,537
    
    
    
    1
    
    
    
    31,948California:Los Angeles
    
    
    1
    
    
    
    43,039
    
    
    
    
    
    
    
    San Diego
    
    
    1
    
    
    
    21,034
    
    
    
    
    
    
    
    California Total
    
    
    2
    
    
    
    64,073
    
    
    
    
    
    
    
    Reno
    
    
    1
    
    
    
    107,729
    
    
    
    
    
    
    
    Atlanta
    
    
    1
    
    
    
    20,251
    
    
    
    
    
    
    
    Phoenix/Scottsdale
    
    
    1
    
    
    
    14,677
    
    
    
    
    
    
    
    Chicago
    
    
    1
    
    
    
    4,720
    
    
    
    1
    
    
    
    5,003Total
    
    
    10
    
    
    $
    408,987
    
    
    
    2
    
    
    $
    36,951
   129




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##### Table of Contents



(dollars in thousands)
    
    #
    
    
    AmountBalance at December 31, 2007
    
    
    2
    
    
    $
    36,951Additions:Transfers from loans
    
    
    9
    
    
    
    400,100Capitalized expenditures
    
    NA
    
    
    
    9,955Subtractions:Impairment charges
    
    NA
    
    
    
    (3,231
    )OREO sales (entire project)
    
    
    (1
    )
    
    
    (29,000
    )OREO sales (individual units)
    
    NA
    
    
    
    (5,788
    )Balance at December 31, 2008
    
    
    10
    
    
    $
    408,987
 NA
    
    - Not Applicable  Years ended December 31
    

    2008
    
    
    2007
    
    
    2006(in thousands)OREO operating expenses
    
    $
    8,096
    
    
    $
    2,189
    
    
    $
    149Protective advances
    
    
    7,462
    
    
    
    1,763
    
    
    
    OREO impairment charges
    
    
    3,231
    
    
    
    137
    
    
    
    (Gain) Loss on sales, net (1)
    
    
    (1,203
    )
    
    
    96
    
    
    
    Rental/other income (1)
    
    
    (2,079
    )
    
    
    (1,533
    )
    
    
    Total
    
    $
    15,507
    
    
    $
    2,652
    
    
    $
    149
 (1)
    
    In accordance with Regulation S-X Article 9 Rule 9-04,14(d) of the
Securities and Exchange Commission, gains/(losses) on sales of OREO as well as any income
generated on the assets is recorded as an offset to the expenses associated with the OREO.  130




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NOTE 7
 PREMISES AND EQUIPMENT
  December 31
    
    2008
    
    
    2007(in thousands)Land and improvements
    
    $
    7,916
    
    
    $
    7,907Buildings and improvements
    
    
    36,401
    
    
    
    30,257Furniture and equipment
    
    
    30,865
    
    
    
    27,410Gross Premises and Equipment
    
    
    75,182
    
    
    
    65,574Less accumulated depreciation
    
    
    (41,898
    )
    
    
    (38,699
    )Total Premises and Equipment, Net
    
    $
    33,284
    
    
    $
    26,875
    Years Ending December 31(in thousands)2009
    
    
    7932010
    
    
    7442011
    
    
    7502012
    
    
    7702013
    
    
    7902014 and thereafter
    
    
    1,725Minimum payments
    
    $
    5,572
   131




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NOTE 8
 DEPOSITS
   Years Ending December 31
    
    Brokered CDs
    
    
    Retail CDs
    
    
    Total(in thousands)2009
    
    $
    61,348
    
    
    $
    5,210,125
    
    
    $
    5,271,4732010
    
    
    54,862
    
    
    
    25,105
    
    
    
    79,9672011
    
    
    
    
    
    
    3,388
    
    
    
    3,3882012
    
    
    
    
    
    
    3,710
    
    
    
    3,7102013
    
    
    
    
    
    
    4,931
    
    
    
    4,9312014 and thereafter
    
    
    
    
    
    
    125
    
    
    
    125Total
    
    $
    116,210
    
    
    $
    5,247,384
    
    
    $
    5,363,594
    NOTE 9
 SUBORDINATED DEBENTURES RELATING TO TRUST PREFERRED SECURITIES
   132




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133




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NOTE 10
 OTHER BORROWINGS
      Balance
    
    
    Interest and fees for theoutstanding
    
    
    years endedat December 31
    
    
    December 31(in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Revolving line of
credit
    
    $
    
    
    
    $
    52,907
    
    
    $
    1,480
    
    
    $
    4,131Other
    
    
    725
    
    
    
    2,038
    
    
    
    7
    
    
    
    32Total
    
    $
    725
    
    
    $
    54,945
    
    
    $
    1,487
    
    
    $
    4,163
 NOTE 11
 INCOME TAXES
  Years Ended December 31
    
    2008
    
    
    2007
    
    
    2006(dollars in thousands)Current tax expense/(benefit)
    
    $
    (109,050
    )
    
    $
    65,516
    
    
    $
    104,468Deferred tax benefit exclusive of the
the change in valuation allowance
    
    
    (103,005
    )
    
    
    (8,199
    )
    
    
    (6,191
    )Valuation allowance for deferred tax assets
    
    
    92,736
    
    
    
    
    
    
    
    Income Tax Provision
    
    $
    (119,319
    )
    
    $
    57,317
    
    
    $
    98,277
  134




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Years Ended December 31
    
    2008
    
    
    2007
    
    
    2006Statutory federal income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Deferred tax asset valuation allowance
    
    
    (16.1
    )
    
    
    
    
    
    
    State income tax expense
    
    
    1.8
    
    
    
    
    
    
    
    0.2Dividends received deduction
    
    
    0.1
    
    
    
    (1.0
    )
    
    
    (0.6
    )Goodwill
    
    
    
    
    
    
    1.0
    
    
    
    Adjustment for tax exposure
    
    
    
    
    
    
    
    
    
    
    (0.7
    )Other, net
    
    
    (0.1
    )
    
    
    0.1
    
    
    
    0.3Effective Rate
    
    
    20.7
    %
    
    
    35.1
    %
    
    
    34.2
    %
  December 31
    
    2008
    
    
    2007(dollars in thousands)Deferred tax assets:Allowance for loan losses and liability for
credit commitment losses
    
    $
    111,632
    
    
    $
    27,517OREO write-downs
    
    
    14,172
    
    
    
    339State net operating loss carryforward
    
    
    4,909
    
    
    
    Defined benefit plan
    
    
    3,312
    
    
    
    1,051Equity compensation
    
    
    3,157
    
    
    
    2,938Loan application and commitment fees
    
    
    2,533
    
    
    
    4,150CLO Program
    
    
    1,483
    
    
    
    6,772Other-than-temporary impairment of investments
    
    
    
    
    
    
    3,977Other deferred tax assets
    
    
    1,868
    
    
    
    117Gross Deferred Tax Assets
    
    
    143,066
    
    
    
    46,861Less Deferred Tax Asset Valuation Allowance
    
    
    (92,736
    )
    
    
    Deferred Tax Assets
    
    
    50,330
    
    
    
    46,861Deferred tax liabilities:Unrealized securities gains
    
    
    (4,379
    )
    
    
    (12,006
    )Depreciation and amortization
    
    
    (1,799
    )
    
    
    (420
    )Purchase accounting adjustments
    
    
    (841
    )
    
    
    (821
    )Gains on nonmonetary stock transactions
    
    
    
    
    
    
    (12,327
    )Investment discount accretion
    
    
    
    
    
    
    (15
    )Gross Deferred Tax Liabilities
    
    
    (7,019
    )
    
    
    (25,589
    )Net Deferred Tax Asset
    
    $
    43,311
    
    
    $
    21,272
   135




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NOTE 12
 EMPLOYEE BENEFIT PLANS
  Years Ended December 31
    
    2008
    
    
    2007
    
    
    2006(in thousands)Retirement Income Plan and Trust
    
    $
    769
    
    
    $
    695
    
    
    $
    892Employees Savings Plan and Trust
    
    
    340
    
    
    
    337
    
    
    
    208Total
    
    $
    1,109
    
    
    $
    1,032
    
    
    $
    1,100
 DEFINED BENEFIT PLAN
   136




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Years Ended December 31
    
    2008
    
    
    2007
    
    
    2006(in thousands  pre-tax)Net Periodic Benefit Cost:Service cost
    
    $
    969
    
    
    $
    1,048
    
    
    $
    1,038Interest cost
    
    
    1,581
    
    
    
    1,499
    
    
    
    1,419Expected return on assets
    
    
    (1,781
    )
    
    
    (1,852
    )
    
    
    (1,565
    )Total Net Periodic Benefit Cost
    
    $
    769
    
    
    $
    695
    
    
    $
    892Other Comprehensive Income:Net actuarial loss/(gain)
    
    $
    11,276
    
    
    $
    (791
    )
    
    
    N/AAmounts Recognized in Net Periodic
Benefit Cost and Other Comprehensive
Income, net  Expense/(Income)
    
    $
    12,045
    
    
    $
    (96
    )
    
    $
    892
 CHANGE IN PROJECTED BENEFIT OBLIGATION
 (in thousands)
    
    2008
    
    
    2007Benefit obligation at January 1
    
    $
    25,850
    
    
    $
    26,701Service cost
    
    
    969
    
    
    
    1,048Interest cost
    
    
    1,581
    
    
    
    1,499Actuarial (gain) loss
    
    
    1,638
    
    
    
    (2,416
    )Benefits paid
    
    
    (984
    )
    
    
    (982
    )Benefit Obligation at December 31
    
    $
    29,054
    
    
    $
    25,850
  CHANGE IN FAIR VALUE OF PLAN ASSETS
 (dollars in thousands)
    
    2008
    
    
    2007Fair value of plan assets at January 1
    
    $
    22,911
    
    
    $
    23,666Actual (loss)/gain on plan assets
    
    
    (7,857
    )
    
    
    227Employer contributions
    
    
    6,000
    
    
    
    Benefits paid
    
    
    (984
    )
    
    
    (982
    )Fair Value of Plan Assets at December 31
    
    $
    20,070
    
    
    $
    22,911Funded Status of the PlanRecognized in Statement of
Financial Position as other liability
    
    $
    (8,984
    )
    
    $
    (2,939
    )
  137




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Size and Characteristics of the Employee Population
 Actuarial Assumptions
 Expected Long-Term Rate of Return on Plan Assets
 Discount Rates
  138




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##### Table of Contents



BENEFIT OBLIGATION
 December 31
    
    2008
    
    
    2007Discount rate
    
    
    5.86
    %
    
    
    6.32
    %Rate of compensation increase
    
    
    4.00
    %
    
    
    5.00
    %
 NET PERIODIC BENEFIT COST
 December 31
    
    2008
    
    
    2007Discount rate
    
    
    6.32
    %
    
    
    5.75
    %Expected return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %Rate of compensation increase
    
    
    5.00
    %
    
    
    5.00
    %
 Plan Assets
  Plan Assets at December 31Asset Category
    
    2008
    
    
    2007Equity securities
    
    
    62
    %
    
    
    99
    %Cash (1)
    
    
    38
    
    
    
    1Total
    
    
    100
    %
    
    
    100
    %
 (1)
    
    Cash as of December 31, 2008, includes the $6 million contribution, which had not
yet been invested in equity securities.  Contributions
   139




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Expected Future Benefit Payments
  Years Ending December 31(in thousands)2009
    
    
    1,1562010
    
    
    1,2272011
    
    
    1,2962012
    
    
    1,4312013
    
    
    1,4742014-2018
    
    
    8,573Total
    
    $
    15,157
 Measurement Date
  SAVINGS PLAN
  NOTE 13
 DERIVATIVES
    140




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NOTE 14
 FAIR VALUE MEASUREMENTS
   Fair Value Hierarchy
  Level 1
 Level 2
 Level
3
    141




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##### Table of Contents



Financial Assets
 Cash and cash equivalents and Time deposits with banks 
 Available-for-sale securities 
 Loans

    142




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##### Table of Contents



Interest rate swap agreements 
 Financial Liabilities
 Deposits without a stated maturity and Certificates of deposit 
 Subordinated debentures relating to Trust Preferred Securities 
 Other borrowings 
  143




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##### Table of Contents



Unrecognized financial liabilities 
 Financial Assets and Liabilities Recorded at Fair Value on a Recurring and Nonrecurring Basis
 Fair Value at December 31, 2008(in thousands)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalRecurring basis:Financial Assets:Available-for-sale securities:U.S. Government agencies
    
    $
    
    
    
    $
    1,634,014
    
    
    $
    
    
    
    $
    1,634,014Other securities
    
    
    2,839
    
    
    
    
    
    
    
    
    
    
    
    2,839Interest rate swap agreements
    
    
    
    
    
    
    2,201
    
    
    
    
    
    
    
    2,201Total
    
    $
    2,839
    
    
    $
    1,636,215
    
    
    $
    
    
    
    $
    1,639,054Nonrecurring basis:Financial Assets:Loans, net
    
    $
    
    
    
    $
    
    
    
    $
    1,146,188
    
    
    $
    1,146,188
   SFAS 107, Disclosures about Fair Value of Financial Instruments
   144




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2008
    
    
    2007Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairDecember 31
    
    Amount
    
    
    Value
    
    
    Amount
    
    
    Value(in thousands)Financial AssetsCash and cash equivalents
    
    $
    308,669
    
    
    $
    308,669
    
    
    $
    663,207
    
    
    $
    663,207Time deposits with banks
    
    
    1,930,918
    
    
    
    1,930,918
    
    
    
    
    
    
    
    Available-for-sale securities
    
    
    1,636,853
    
    
    
    1,636,853
    
    
    
    3,785,499
    
    
    
    3,785,499Loans, net
    
    
    3,783,252
    
    
    
    3,298,400
    
    
    
    4,338,395
    
    
    
    4,339,423Other assets
    
    
    2,201
    
    
    
    2,201
    
    
    
    
    
    
    
    Financial LiabilitiesDeposits without a stated maturity
    
    $
    2,228,866
    
    
    $
    2,228,866
    
    
    $
    2,095,882
    
    
    $
    2,095,882Certificates of deposit
    
    
    5,363,594
    
    
    
    5,423,218
    
    
    
    5,523,800
    
    
    
    5,528,768Subordinated debentures relating to
Trust Preferred Securities
    
    
    409,414
    
    
    
    25,588
    
    
    
    404,647
    
    
    
    330,787Other borrowings
    
    
    725
    
    
    
    725
    
    
    
    54,945
    
    
    
    54,945Other liabilities
    
    
    
    
    
    
    
    
    
    
    147
    
    
    
    147Unrecognized Financial LiabilitiesStandby letters of credit
    
    $
    10
    
    
    $
    10
    
    
    $
    22
    
    
    $
    22Unfunded loan commitments
    
    
    35,550
    
    
    
    35,550
    
    
    
    6,000
    
    
    
    6,000
 NOTE 15
 LEGAL PROCEEDINGS
     145




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NOTE 16
 EQUITY COMPENSATION PLANS
  Stock Options
   Grant date
    
    11/11/08
    
    
    1/29/08
    
    
    4/23/07
    
    
    5/24/06Expected volatility
    
    
    38.58
    %
    
    
    31.20
    %
    
    
    26.62
    %
    
    
    27.30
    %Expected
dividend yields
    
    
    0.00
    %
    
    
    7.50
    %
    
    
    4.44
    %
    
    
    3.00
    %Expected term
    

    6 years
    
    
    8 years
    
    
    8 years
    
    
    8 yearsRisk-free rate
    
    
    3.99
    %
    
    
    4.46
    %
    
    
    4.60
    %
    
    
    4.97
    %Fair value
    
    $
    0.89
    
    
    $
    1.60
    
    
    $
    3.55
    
    
    $
    7.97
    146




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Weighted
    
    
    Weighted Average
    
    
    AggregateNumber of
    
    
    Average
    
    
    Remaining
    
    
    IntrinsicYear Ended December 31, 2008
    
    Shares
    
    
    Exercise Price
    
    
    Contractual Life
    
    

Value(1)(in thousands, except exercise price)Beginning options outstanding
    
    
    2,567
    
    
    $
    17.10Grants
    
    
    852
    
    
    $
    10.36Exercises
    
    
    
    
    
    
    Expirations
    
    
    (277
    )
    
    
    14.21Forfeitures
    
    
    (343
    )
    
    
    13.89Ending Options Outstanding
    
    
    2,799
    
    
    $
    15.66
    
    
    6.2 years
    
    
    
    Exercisable at December 31
    
    
    1,534
    
    
    $
    15.29
    
    
    4.4 years
    
    
    
    
 (1)
    
    Corus stock price as of December 31, 2008 was $1.11/share which was lower than the
exercise price for all outstanding options. Thus, intrinsic value is zero.  Years Ended December 31(in
thousands)
    
    2008(1)
    
    
    2007
    
    
    2006Number of options exercised
    
    
    
    
    
    
    1,010
    
    
    
    182Cash proceeds from exercises
    
    $
    
    
    
    $
    83
    
    
    $
    1,658Non-cash proceeds from exercises
(tendered stock)
    
    $
    
    
    
    $
    7,375
    
    
    $
    124Tax benefit-Based on Black-Scholes fair value
    
    $
    
    
    
    $
    931
    
    
    $
    222-Based on intrinsic value
in excess of Black-Scholes fair value
    
    $
    
    
    
    $
    2,156
    
    
    $
    1,007Intrinsic Value
    
    $
    
    
    
    $
    8,820
    
    
    $
    3,512
 (1)
    
    There were no options
exercised in 2008.  147




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##### Table of Contents



Restricted Stock
 Weighted 
Average Grant
    
    
    Weighted 
AverageDate Fair
    
    
    RemainingYear Ended December 31, 2008
    
    Number of Shares
    
    
    Value
    
    
    Contractual Life(in thousands, except exercise price)Outstanding at Dec 31, 2007
    
    
    34
    
    
    $
    17.04Granted
    
    
    522
    
    
    
    2.03Vested
    
    
    (7
    )
    
    
    17.04Forfeited
    
    
    (24
    )
    
    
    16.98Outstanding at Dec 31, 2008
    
    
    525
    
    
    $
    2.11
    
    
    3.8 years
  Commission Program for Commercial Loan Officers
    148




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##### Table of Contents



Book Balance ofCommissions heldback in the CorusYear Ended December 31, 2008
    
    Stock Election(in thousands)Balance at December 31, 2007
    
    $
    11,976Current year holdbacks
    
    
    2,271Settlement
    
    
    (415
    )Loss sharing
    
    
    (11,707
    )Balance at December 31, 2008
    
    $
    2,125
 NOTE 17
 NET INCOME/(LOSS) PER SHARE
  Years Ended December 31
    
    2008
    
    
    2007
    
    
    2006(in thousands, except per share data)Numerator:Net income/(loss) attributable to common
shares
    
    $
    (456,463
    )
    
    $
    106,204
    
    
    $
    189,444Denominator:Average common shares outstanding  Basic
    
    
    54,261
    
    
    
    56,273
    
    
    
    55,968Effect of dilutive potential common shares
    
    
    
    
    
    
    992
    
    
    
    1,737Average common shares outstanding  Diluted
    
    
    54,261
    
    
    
    57,265
    
    
    
    57,705Net income/(loss) per share:Basic
    
    $
    (8.41
    )
    
    $
    1.89
    
    
    $
    3.38Diluted
    
    
    (8.41
    )
    
    
    1.85
    
    
    
    3.28
   149




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NOTE 18
 REGULATORY CAPITAL AND RATIOS
       150




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##### Table of Contents



To qualify as Well-Minimum Capital
    
    
    Capitalized" Under PromptActual
    
    
    Requirement
    
    
    Corrective Action Provisions(1)(in millions)
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioAs of December 31, 2008Tier 1 Leverage(2)Corus Bankshares, Inc.
    
    $
    377
    
    
    
    4.4
    %
    
    $
    345
    
    
    
    4.0
    %
    
    NA
    
    
    NACorus Bank, N.A.
    
    
    622
    
    
    
    7.2
    %
    
    
    344
    
    
    
    4.0
    %
    
    $
    431
    
    
    
    5.0
    %Tier 1 Risk-Based(3)Corus Bankshares, Inc.
    
    $
    377
    
    
    
    6.2
    %
    
    $
    245
    
    
    
    4.0
    %
    
    NA
    

    
    NACorus Bank, N.A.
    
    
    622
    
    
    
    10.2
    %
    
    
    244
    
    
    
    4.0
    %
    
    $
    367
    
    
    
    6.0
    %Total Risk-Based(4)Corus Bankshares, Inc.
    
    $
    755
    
    
    
    12.3
    %
    
    $
    490
    
    
    
    8.0
    %
    
    NA
    

    
    NACorus Bank, N.A.
    
    
    701
    
    
    
    11.5
    %
    
    
    489
    
    
    
    8.0
    %
    
    $
    611
    
    
    
    10.0
    %As of December 31, 2007Tier 1 Leverage(2)Corus Bankshares, Inc.
    
    $
    1,025
    
    
    
    11.4
    %
    
    $
    359
    
    
    
    4.0
    %
    
    NA
    

    
    NACorus Bank, N.A.
    
    
    941
    
    
    
    10.6
    %
    
    
    354
    
    
    
    4.0
    %
    
    $
    443
    
    
    
    5.0
    %Tier 1 Risk-Based(3)Corus Bankshares, Inc.
    
    $
    1,025
    
    
    
    14.4
    %
    
    $
    285
    
    
    
    4.0
    %
    
    NA
    

    
    NACorus Bank, N.A.
    
    
    941
    
    
    
    13.5
    %
    
    
    279
    
    
    
    4.0
    %
    
    $
    418
    
    
    
    6.0
    %Total Risk-Based(4)Corus Bankshares, Inc.
    
    $
    1,254
    
    
    
    17.6
    %
    
    $
    570
    
    
    
    8.0
    %
    
    NA
    

    
    NACorus Bank, N.A.
    
    
    1,018
    
    
    
    14.6
    %
    
    
    557
    
    
    
    8.0
    %
    
    $
    697
    
    
    
    10.0
    %
 NA
    
    - Not applicable.(1)
    
    The Bank will not be deemed to be well capitalized under the prompt corrective
action provisions subsequent to February 18, 2009, the effective date of the Order.(2)
    
    Tier 1 capital, which is shareholders equity plus qualifying trust preferred
securities (Holding Company only) and unrealized losses from defined benefit pension plan less
goodwill, disallowed portion of deferred income taxes and unrealized gains on available-for-sale
securities; computed as a ratio to quarterly average assets less
goodwill, disallowed portion of
deferred income taxes and unrealized gains on available-for-sale securities.(3)
    
    Tier 1 capital; computed as a ratio to risk-adjusted assets.(4)
    
    Total risk-based capital (equal to Tier 1 capital plus allowable trust preferred
securities (Holding Company only) that do not qualify for Tier 1 capital treatment, qualifying loan
loss allowance and SFAS 115 gain); computed as a ratio torisk-adjusted assets.  151




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Additional Considerations Regarding the Calculation of Regulatory Capital and Ratios
    Concentrations in Commercial Real Estate Lending
     152




---



##### Table of Contents



Dividend Restrictions
  NOTE 19
 RELATED PARTY TRANSACTIONS
    Fees and InterestPaid to Participant inParticipant
    
    2008
    
    
    2007
    
    
    2006(in thousands)Edward W. Glickman
    
    $
    
    
    
    $
    116
    
    
    $
    218Robert J. Glickman
    
    
    
    
    
    
    
    
    
    
    238
   153




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##### Table of Contents



NOTE 20
 SUPPLEMENTAL INFORMATION TO CASH FLOWS
 Years Ended December 31
    
    2008
    
    
    2007
    
    
    2006(in thousands)Cash paid during the period for:Interest
    
    $
    344,010
    
    
    $
    440,224
    
    
    $
    402,517Income taxes
    
    
    12,475
    
    
    
    78,125
    
    
    
    103,921Noncash Investing and Financing Activities:Loan transferred to Other Real Estate Owned
    
    
    400,100
    
    
    
    31,948
    
    
    
    8,439Loan charge-offs
    
    
    410,130
    
    
    
    40,627
    
    
    
    2,640Corus financed OREO sale
    
    
    (18,200
    )
    
    
    
    
    
    
    Common stock repurchase  delivery of shares related to option exercise
    
    
    
    
    
    
    (7,375
    )
    
    
    (124
    )
 NOTE 21
 PARENT COMPANY FINANCIAL STATEMENTS
  CONDENSED BALANCE SHEETS
 December 31
    
    2008
    
    
    2007(in thousands)Assets:Cash
    
    $
    48,188
    
    
    $
    162,850Available-for-sale securities, at fair value
    
    
    2,839
    
    
    
    140,473Investment in subsidiary
    
    
    621,428
    
    
    
    938,385Loans, net of unearned income
    
    
    
    
    
    
    30,608Other assets
    
    
    33,274
    
    
    
    15,060Total Assets
    
    $
    705,729
    
    
    $
    1,287,376Liabilities and shareholders equity:Long-term debt  subordinated debentures
    
    $
    409,414
    
    
    $
    404,647Other borrowings
    
    
    
    
    
    
    52,907Other liabilities
    
    
    13,750
    
    
    
    40,425Shareholders equity
    
    
    282,565
    
    
    
    789,397Total Liabilities and Shareholders Equity
    
    $
    705,729
    
    
    $
    1,287,376
  154




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##### Table of Contents



CONDENSED STATEMENTS OF INCOME
 Years Ended December 31
    
    2008
    
    
    2007
    
    
    2006(in thousands, except per share data)Income:Dividends from bank subsidiary
    
    $
    570
    
    
    $
    149,600
    
    
    $
    99,000Interest, points and fees on loans, and dividend income
    
    
    10,202
    
    
    
    18,001
    
    
    
    10,482Securities gains/(losses), net
    
    
    25,917
    
    
    
    4,657
    
    
    
    6,071Other income
    
    
    790
    
    
    
    989
    
    
    
    875Total Income
    
    
    37,479
    
    
    
    173,247
    
    
    
    116,428Expense:Interest expense
    
    
    24,586
    
    
    
    35,071
    
    
    
    29,495Provision for credit losses
    
    
    13,914
    
    
    
    
    
    
    
    Other expenses
    
    
    619
    
    
    
    1,996
    
    
    
    2,202Total Expense
    
    
    39,119
    
    
    
    37,067
    
    
    
    31,697Income/(Loss) Before Taxes and Equity in
Undistributed Net Income/(Loss) of Subsidiary
    
    
    (1,640
    )
    
    
    136,180
    
    
    
    84,731Income tax benefit
    
    
    (996
    )
    
    
    (6,320
    )
    
    
    (6,985
    )Income/(Loss) Before Equity in Undistributed
Net Income/(Loss) of Subsidiary
    
    
    (644
    )
    
    
    142,500
    
    
    
    91,716Equity in undistributed net income/(loss) of subsidiary
    
    
    (455,819
    )
    
    
    (36,296
    )
    
    
    97,728Net Income/(Loss)
    
    $
    (456,463
    )
    
    $
    106,204
    
    
    $
    189,444Net income/(loss) per share:Basic
    
    $
    (8.41
    )
    
    $
    1.89
    
    
    $
    3.38Diluted
    
    
    (8.41
    )
    
    
    1.85
    
    
    
    3.28
  155




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##### Table of Contents



CONDENSED STATEMENTS OF CASH FLOWS
 Years Ended December 31
    
    2008
    
    
    2007
    
    
    2006(in thousands)Cash Flows From Operating Activities:Net income/(loss)
    
    $
    (456,463
    )
    
    $
    106,204
    
    
    $
    189,444Adjustments to reconcile net income
to net cash (used in)/provided by operating activities:Provision for credit losses
    
    
    13,914
    
    
    
    
    
    
    
    Depreciation
    
    
    2
    
    
    
    3
    
    
    
    2Deferred income tax (benefit)/expense
    
    
    (8,009
    )
    
    
    3,379
    
    
    
    (373
    )Deferred interest expense from subordinated debentures
relating to Trust Preferred Securities
    
    
    4,767
    
    
    
    
    
    
    
    Securities (gains)/losses, net
    
    
    (25,917
    )
    
    
    (4,657
    )
    
    
    (6,071
    )Increase in other assets
    
    
    (5,507
    )
    
    
    (27
    )
    
    
    (681
    )(Decrease)/increase in other liabilities
    
    
    (14,546
    )
    
    
    (2,334
    )
    
    
    4,883Equity in undistributed net loss/(income) of subsidiary
    
    
    455,819
    
    
    
    36,296
    
    
    
    (97,728
    )Net Cash (Used in)/Provided by Operating Activities
    
    
    (35,940
    )
    
    
    138,864
    
    
    
    89,476Cash Flows From Investing Activities:Proceeds from sales of available-for-sale securities
    
    
    127,899
    
    
    
    38,091
    
    
    
    15,752Proceeds from maturities of available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    15,000Purchases of available-for-sale securities
    
    
    (86
    )
    
    
    (7,492
    )
    
    
    (41,041
    )Loan participations funded, net
    
    
    17,569
    
    
    
    (7,848
    )
    
    
    (3,085
    )Capital infusion to subsidiary bank
    
    
    (137,600
    )
    
    
    
    
    
    
    Net Cash Provided by/(Used in) Investing Activities
    
    
    7,782
    
    
    
    22,751
    
    
    
    (13,374
    )Cash Flows From Financing Activities:Net proceeds from issuance of subordinated debentures
relating to Trust Preferred Securities
    
    
    
    
    
    
    20,000
    
    
    
    25,000(Decrease)/increase in other borrowings, net
    
    
    (52,907
    )
    
    
    14,606
    
    
    
    19,151Cash proceeds from stock option exercises
    
    
    
    
    
    
    83
    
    
    
    1,658Increase from subsidiary equity compensation plans, net
    
    
    1,102
    
    
    
    3,368
    
    
    
    3,552Repurchases and retirements of common shares
    
    
    (7,176
    )
    
    
    (19,848
    )
    
    
    (1,963
    )Cash dividends paid on common shares
    
    
    (27,523
    )
    
    
    (113,270
    )
    
    
    (46,139
    )Net Cash (Used in)/Provided by Financing Activities
    
    
    (86,504
    )
    
    
    (95,061
    )
    
    
    1,259Net (Decrease)/Increase in Cash and Cash Equivalents
    
    
    (114,662
    )
    
    
    66,554
    
    
    
    77,361Cash and cash equivalents at beginning of year
    
    
    162,850
    
    
    
    96,296
    
    
    
    18,935Cash and Cash Equivalents at End of Year
    
    $
    48,188
    
    
    $
    162,850
    
    
    $
    96,296
 (1)
    
    Pursuant to the Commission Program for Commercial Loan Officers.  156




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##### Table of Contents



NOTE 22
 QUARTERLY FINANCIAL DATA (UNAUDITED)
  Year Ended December 31, 2008Fourth
    
    
    Third
    
    
    Second
    
    
    First(dollars in thousands, except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterInterest, points and fees on loans, and dividend income
    
    $
    71,823
    
    
    $
    105,691
    
    
    $
    111,872
    
    
    $
    143,676Interest expense
    
    
    78,791
    
    
    
    77,708
    
    
    
    86,392
    
    
    
    96,754Net Interest Income/(Loss)
    
    
    (6,968
    )
    
    
    27,983
    
    
    
    25,480
    
    
    
    46,922Provision for credit losses
    
    
    (360,000
    )
    
    
    (182,200
    )
    
    
    (58,500
    )
    
    
    (36,800
    )Net Interest Income/(Loss) After
Provision for Credit Losses
    
    
    (366,968
    )
    
    
    (154,217
    )
    
    
    (33,020
    )
    
    
    10,122Noninterest income, excluding
securities gains/(losses), net
    
    
    3,086
    
    
    
    3,206
    
    
    
    3,089
    
    
    
    3,430Securities gains/(losses), net
    
    
    
    
    
    
    (21
    )
    
    
    15,130
    
    
    
    10,978Noninterest expense
    
    
    22,654
    
    
    
    17,907
    
    
    
    10,791
    
    
    
    19,245Income/(Loss) Before Income Taxes
    
    
    (386,536
    )
    
    
    (168,939
    )
    
    
    (25,592
    )
    
    
    5,285Income tax expense/(benefit)
    
    
    (69,751
    )
    
    
    (40,937
    )
    
    
    (9,408
    )
    
    
    777Net Income/(Loss)
    
    $
    (316,785
    )
    
    $
    (128,002
    )
    
    $
    (16,184
    )
    
    $
    4,508Net income/(loss) per share:Basic
    
    $
    (5.90
    )
    
    $
    (2.38
    )
    
    $
    (0.30
    )
    
    $
    0.08Diluted
    
    
    (5.90
    )
    
    
    (2.38
    )
    
    
    (0.30
    )
    
    
    0.08
 Year Ended December 31, 2007Fourth
    
    
    Third
    
    
    Second
    
    
    First(dollars in thousands, except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterInterest, points and fees on loans, and dividend income
    
    $
    164,202
    
    
    $
    178,958
    
    
    $
    186,776
    
    
    $
    186,520Interest expense
    
    
    102,872
    
    
    
    106,228
    
    
    
    109,219
    
    
    
    111,681Net Interest Income/(Loss)
    
    
    61,330
    
    
    
    72,730
    
    
    
    77,557
    
    
    
    74,839Provision for credit losses
    
    
    (33,500
    )
    
    
    (15,000
    )
    
    
    (12,000
    )
    
    
    (5,500
    )Net Interest Income/(Loss) After
Provision for Credit Losses
    
    
    27,830
    
    
    
    57,730
    
    
    
    65,557
    
    
    
    69,339Noninterest income, excluding
securities gains/(losses), net
    
    
    3,419
    
    
    
    3,402
    
    
    
    3,405
    
    
    
    3,740Securities gains/(losses), net
    
    
    (4,082
    )
    
    
    10,983
    
    
    
    13,025
    
    
    
    (15,253
    )Noninterest expense
    
    
    23,006
    
    
    
    17,982
    
    
    
    16,873
    
    
    
    17,713Income/(Loss) Before Income Taxes
    
    
    4,161
    
    
    
    54,133
    
    
    
    65,114
    
    
    
    40,113Income tax expense/(benefit)
    
    
    2,237
    
    
    
    18,649
    
    
    
    22,707
    
    
    
    13,724Net Income/(Loss)
    
    $
    1,924
    
    
    $
    35,484
    
    
    $
    42,407
    
    
    $
    26,389Net income/(loss) per share:Basic
    
    $
    0.03
    
    
    $
    0.63
    
    
    $
    0.75
    
    
    $
    0.47Diluted
    
    
    0.03
    
    
    
    0.61
    
    
    
    0.74
    
    
    
    0.46
  157




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##### Table of Contents



SUPPLEMENTARY STATISTICAL DATA (UNAUDITED)
  Carrying Value of Securities by Category
  December 31(in thousands)
    
    2008
    
    
    2007
    
    
    2006U.S. Government agencies
    
    $
    1,634,014
    
    
    $
    3,618,265
    
    
    $
    5,178,270Equity securities
    
    
    
    
    
    
    135,981
    
    
    
    217,042Mortgage backed securities
    
    
    
    
    
    
    
    
    
    
    4,816Other
    
    
    2,839
    
    
    
    4,492
    
    
    
    5,093Total
    
    $
    1,636,853
    
    
    $
    3,758,738
    
    
    $
    5,405,221
  158




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##### Table of Contents



Maturities of Securities
  Not due atOne year
    
    
    a single(in thousands)
    
    or less
    
    
    maturity
    
    
    TotalU.S. Government agencies
    
    $
    1,634,014
    
    
    $
    
    
    
    $
    1,634,014Other
    
    
    
    
    
    
    2,839
    
    
    
    2,839Total
    
    $
    1,634,014
    
    
    $
    2,839
    
    
    $
    1,636,853
  Not due atOne year
    
    
    a singleor less
    
    
    maturity
    
    
    TotalU.S. Government agencies
    
    
    2.79
    %
    
    
    
    %
    
    
    2.79
    %Other
    
    
    
    
    
    
    2.98
    
    
    
    2.98
   159




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##### Table of Contents



Classification of Loans
  December 31(in thousands)
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Commercial real estate:Condominium:Construction
    
    $
    2,883,862
    
    
    $
    3,460,923
    
    
    $
    2,615,037
    
    
    $
    1,919,232
    
    
    $
    801,201Conversion
    
    
    171,465
    
    
    
    583,871
    
    
    
    1,236,519
    
    
    
    1,789,612
    
    
    
    789,568Inventory
    
    
    49,265
    
    
    
    64,215
    
    
    
    51,323
    
    
    
    96,532
    
    
    
    152,051Other commercial real estate
    
    
    894,457
    
    
    
    241,658
    
    
    
    171,762
    
    
    
    599,048
    
    
    
    890,101Total commercial real estate
    
    $
    3,999,049
    
    
    $
    4,350,667
    
    
    $
    4,074,641
    
    
    $
    4,404,424
    
    
    $
    2,632,921Commercial
    
    
    40,251
    
    
    
    41,317
    
    
    
    42,319
    
    
    
    84,381
    
    
    
    109,582Residential real estate and other
    
    
    13,309
    
    
    
    17,403
    
    
    
    25,019
    
    
    
    35,706
    
    
    
    51,325Loans, net of unearned income
    
    $
    4,052,609
    
    
    $
    4,409,387
    
    
    $
    4,141,979
    
    
    $
    4,524,511
    
    
    $
    2,793,828Mezzanine loans included in
total commercial real estate
    
    $
    44,425
    
    
    $
    123,956
    
    
    $
    195,649
    
    
    $
    132,432
    
    
    $
    111,278
 Maturities of Loans and Sensitivity to Changes in Interest Rates
  One year
    
    
    From one
    
    
    After(in thousands)
    
    or less
    
    
    to five years
    
    
    five years
    
    
    TotalCommercial real estate:Condominium:Construction
    
    $
    2,047,321
    
    
    $
    836,541
    
    
    $
    
    
    
    $
    2,883,862Conversion
    
    
    160,727
    
    
    
    10,738
    
    
    
    
    
    
    
    171,465Inventory
    
    
    49,265
    
    
    
    
    
    
    
    
    
    
    
    49,265Other commercial real estate
    
    
    335,344
    
    
    
    559,113
    
    
    
    
    
    
    
    894,457Total commercial real estate
    
    $
    2,592,657
    
    
    $
    1,406,392
    
    
    $
    
    
    
    $
    3,999,049Commercial
    
    
    22,043
    
    
    
    17,823
    
    
    
    385
    
    
    
    40,251Residential real estate and other
    
    
    1,588
    
    
    
    2,849
    
    
    
    8,872
    
    
    
    13,309Loans, net of unearned income
    
    $
    2,616,288
    
    
    $
    1,427,064
    
    
    $
    9,257
    
    
    $
    4,052,609
   160




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##### Table of Contents



Risk Elements in the Loan Portfolio
  December 31(in thousands)
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004NonaccrualCondominium:Construction
    
    $
    1,648,712
    
    
    $
    105,066
    
    
    $
    
    
    
    $
    
    
    
    $
    Conversion
    
    
    136,298
    
    
    
    177,086
    
    
    
    72,472
    
    
    
    
    
    
    
    Inventory
    
    
    44,046
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total condominium
    
    
    1,829,056
    
    
    
    282,152
    
    
    
    72,472
    
    
    
    
    
    
    
    Other commercial
real estate:Office
    
    
    39,354
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rental Apartment
    
    
    156,831
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total commercial
real estate
    
    
    2,025,241
    
    
    
    282,152
    
    
    
    72,472
    
    
    
    
    
    
    
    Commercial
    
    
    846
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    Residential real
estate and other
    
    
    
    
    
    
    
    
    
    
    70
    
    
    
    73
    
    
    
    76Total nonaccrual
    
    
    2,026,087
    
    
    
    282,180
    
    
    
    72,472
    
    
    
    
    
    
    
    Loans 90 days or
more past due
    
    
    1,707
    
    
    
    463
    
    
    
    34,365
    
    
    
    544
    
    
    
    5,675Troubled debt
restructurings(1)
    
    
    8,709
    
    
    
    153,453
    
    
    
    
    
    
    
    14,727
    
    
    
    23,479Total Nonperforming
Loans
    
    
    2,036,503
    
    
    
    436,096
    
    
    
    106,837
    
    
    
    15,271
    
    
    
    29,154Other real estate
owned (OREO)
    
    
    408,987
    
    
    
    36,951
    
    
    
    8,439
    
    
    
    
    
    
    
    40Total Nonperforming
Assets
    
    $
    2,445,490
    
    
    $
    473,047
    
    
    $
    115,276
    
    
    $
    15,271
    
    
    $
    29,194
 (1)
    
    To the extent not included in either nonaccrual or loans 90 days or more past due.    161




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##### Table of Contents



Analysis of the Allowance for Loan Losses
  Year Ended December 31(in thousands)
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Balance at beginning of year
    
    $
    70,992
    
    
    $
    45,293
    
    
    $
    39,740
    
    
    $
    32,882
    
    
    $
    36,448Provision for credit losses
    
    
    637,500
    
    
    
    66,000
    
    
    
    7,500
    
    
    
    6,000
    
    
    
    Less charge-offs:Commercial real estate:Condominium:Construction
    
    
    (365,283
    )
    
    
    (7,490
    )
    
    
    
    
    
    
    
    
    
    
    Conversion
    
    
    (43,340
    )
    
    
    (32,958
    )
    
    
    
    
    
    
    
    
    
    
    Inventory
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other commerical real estate
    
    
    
    
    
    
    
    
    
    
    (1,512
    )
    
    
    
    
    
    
    Commercial
    
    
    (1,361
    )
    
    
    
    
    
    
    (756
    )
    
    
    (504
    )
    
    
    (13
    )Residential real estate and other
    
    
    (147
    )
    
    
    (179
    )
    
    
    (372
    )
    
    
    (423
    )
    
    
    (652
    )Total charge-offs
    
    
    (410,131
    )
    
    
    (40,627
    )
    
    
    (2,640
    )
    
    
    (927
    )
    
    
    (665
    )Add recoveries:Commercial real estate:Condominium:Construction
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Conversion
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Inventory
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other commerical real estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial
    
    
    11
    
    
    
    133
    
    
    
    8
    
    
    
    218
    
    
    
    Residential real estate and other
    
    
    529
    
    
    
    693
    
    
    
    1,185
    
    
    
    1,567
    
    
    
    2,099Total recoveries
    
    
    546
    
    
    
    826
    
    
    
    1,193
    
    
    
    1,785
    
    
    
    2,099Net (charge-offs)/recoveries
    
    
    (409,585
    )
    
    
    (39,801
    )
    
    
    (1,447
    )
    
    
    858
    
    
    
    1,434Reclassification to reserve for loan losses
related to unfunded commitments
    
    
    (29,550
    )
    
    
    (500
    )
    
    
    (500
    )
    
    
    
    
    
    
    (5,000
    )Balance at end of year
    
    $
    269,357
    
    
    $
    70,992
    
    
    $
    45,293
    
    
    $
    39,740
    
    
    $
    32,882Net (charge-offs)/recoveries as a
percentage of average loans outstanding
    
    
    (9.08
    %)
    
    
    (0.98
    %)
    
    
    (0.03
    %)
    
    
    0.02
    %
    
    
    0.06
    %
  162




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##### Table of Contents



Allocation of the Allowance for Loan Losses
  December 31(in thousands)
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Commercial real estate:Condominium:Construction
    
    $
    202,084
    
    
    $
    40,892
    
    
    $
    24,258
    
    
    $
    14,704
    
    
    $
    5,962Conversion
    
    
    2,408
    
    
    
    20,332
    
    
    
    15,166
    
    
    
    13,710
    
    
    
    5,876Inventory
    
    
    35
    
    
    
    1,032
    
    
    
    550
    
    
    
    740
    
    
    
    1,131Other commercial real estate:Office
    
    
    2,923
    
    
    
    1,033
    
    
    
    800
    
    
    
    1,217
    
    
    
    1,278Rental apartment and other
    
    
    34,968
    
    
    
    1,342
    
    
    
    493
    
    
    
    3,372
    
    
    
    5,345Commercial
    
    
    1,307
    
    
    
    2,337
    
    
    
    1,517
    
    
    
    1,393
    
    
    
    673Residential real estate and other
    
    
    133
    
    
    
    175
    
    
    
    261
    
    
    
    607
    
    
    
    3,152Unallocated
    
    
    25,499
    
    
    
    3,849
    
    
    
    2,248
    
    
    
    3,997
    
    
    
    9,465Total
    
    $
    269,357
    
    
    $
    70,992
    
    
    $
    45,293
    
    
    $
    39,740
    
    
    $
    32,882Mezzanine included in the above
    
    
    9,906
    
    
    
    5,318
    
    
    
    6,847
    
    
    
    3,941
    
    
    
    1,077
  Loan Portfolio Composition
  December 312008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Commercial real estate:Condominium:Construction
    
    
    72
    %
    
    
    79
    %
    
    
    63
    %
    
    
    42
    %
    
    
    29
    %Conversion
    
    
    4
    
    
    
    13
    
    
    
    30
    
    
    
    40
    
    
    
    28Inventory
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    5Other commercial real estate
    
    
    22
    
    
    
    6
    
    
    
    4
    
    
    
    13
    
    
    
    32Commercial
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    4Residential real estate and other
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    2Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  163




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##### Table of Contents



Deposits
  (in thousands)Maturing within 3 months
    
    $
    498,854After 3 but within 6 months
    
    
    466,082After 6 but within 12 months
    
    
    1,259,226After 12 months
    
    
    14,385Total
    
    $
    2,238,547
 Return on Equity and Assets
  December 312008
    
    
    2007
    
    
    2006Return on average total assets
    
    
    (5.2
    )%
    
    
    1.1
    %
    
    
    2.0
    %Return on average common shareholders equity
    
    
    (63.0
    )
    
    
    12.6
    
    
    
    25.0Dividend payout ratio (1)
    
    
    (3.0
    )
    
    
    105.8
    
    
    
    26.6Average equity to average total assets
    
    
    8.2
    
    
    
    8.8
    
    
    
    8.0
 (1)
    
    The 2007 ratio includes $1.00 per common share special cash dividend declared on
June 21, 2007.  164




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
           
 ITEM 9B. OTHER INFORMATION
   165




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  Executive Officers of the Registrant
 Name and
    
    
    
    
    
    Principal Occupation(years with Company)
    
    Age
    
    
    for Past Five Years
    
    YearsRobert J. Glickman (39)(a)
    
    
    62
    
    
    President and Chief Executive Officer
    
    1984   PresentRandy P. Curtis (11)
    
    
    50
    
    
    EVP, Retail Banking
    
    2005   PresentSVP, Retail Banking
    
    1997   2004Michael E. Dulberg (9)(b)
    
    
    43
    
    
    EVP and Chief Financial Officer
    
    2008   PresentSVP and Chief Accounting Officer
    
    2004   2008FVP and Chief Accounting Officer
    
    2000   2004Richard J. Koretz (17)
    
    
    45
    
    
    EVP and Chief Operating Officer
    
    2008   PresentSVP, Finance
    
    2000   2008Terence W. Keenan (18)
    
    
    63
    
    
    SVP, Commercial Lending
    
    1990   PresentJoel C. Solomon (11)
    
    
    54
    
    
    SVP, Commercial Lending
    
    1997   PresentTimothy J. Stodder (22)
    
    
    49
    
    
    SVP, Commercial Lending
    
    2005   PresentFVP, Commercial Lending
    
    1996   2005
 (a)
    
    Robert J. Glickman is the son of Joseph C. Glickman, the Chairman of the Board of Corus.(b)
    
    Michael E. Dulberg has, at his request, taken a personal leave of absence effective March 16,
2009. Mr. Dulbergs decision is not in connection with any known disagreement with the Company or
its independent registered public accounting firm on any matter relating to the Companys
operations, policies or practices.    166




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##### Table of Contents



Code of Ethics for Principal Officers
 www.corusbank.com
 
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
   
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
   167




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 (a)
    
    Financial statement schedules have been omitted as they are not applicable or the required
information is shown in the consolidated financial statements or notes thereto.(b)
    
    Exhibits:
 3(i)
    

Amended and Restated Articles of Incorporation are incorporated herein by reference
from Exhibit 3(i) to the Form 10-Q filing dated May 8, 2008.3(ii)
    
    By-Laws of Corus Bankshares, Inc. are incorporated herein by reference from Exhibit
3(ii) to the Form 10-Q filing dated October 30, 2008.4.1
    
    
    Form of Junior Subordinated Debt Securities Indenture is incorporated herein by
reference from Exhibit 4.1 to the Form 10-K filing dated March 14, 2006.4.2
    
    
    Form of Amended and Restated Declaration of Trust is incorporated herein by reference
from Exhibit 4.2 to the Form 10-K filing dated March 14, 2006.4.3
    
    
    Form of Guarantee Agreement is incorporated herein by reference from Exhibit 4.3 to the
Form 10-K filing dated March 14, 2006.4.4
    
    
    Summary Schedule of Subordinated Debentures is incorporated herein by reference from
Exhibit 4.4 to the Form 8-K filing dated July 2, 2007.4.5
    
    
    Form of common stock certificate incorporated herein by reference from Exhibit 4.3 to
the Form S-8 filed on March 28, 2006.10.1
    
    
    Amended and Restated Corus Bank N.A. Commission Program for Commercial Loan Officers is
incorporated herein by reference from Exhibit 10.2 to the Form 8-K filing dated December 7,
2007. (2)10.2
    
    
    Corus Bankshares 1999 Stock Option Plan is incorporated herein by reference from
Exhibit 4.3 to the Form S-8 filing dated April 30, 1999. (2)10.3
    
    
    Form of Non-qualified Stock Option Agreement under the 1999 Stock Option Plan
(Transferable) is incorporated herein by reference from Exhibit 99.1 to the Form 8-K filing
dated February 16, 2005. (2)10.4
    
    
    Form of Non-qualified Stock Option Agreement under the 1999 Stock Option Plan
(Non-Transferable) is incorporated herein by reference from Exhibit 99.2 to the Form 8-K
filing dated February 16, 2005. (2)10.5
    
    
    Form of Change of Control Agreement between the Company and certain of its officers is
incorporated herein by reference from Exhibit 10 to the Form 8-K filing dated December 7,
2007. (2)10.6
    
    
    Summary Description of Corus Bankshares Compensation for Directors (1) (2)10.7
    
    
    Summary of Executive Compensation issued by the Company(1) (2)
  168




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##### Table of Contents



10.8
    
    
    Corus Bankshares, Inc. Equity Award and Incentive Plan (As Amended) is incorporated
herein by reference from Exhibit 10 to the Form 8-K filing dated April 26, 2007.(2)10.9
    
    
    Form of Non-qualified Stock Option Agreement under the Equity Award and Incentive Plan
is incorporated herein by reference from Exhibit 10.3 to the Form 10-Q filing dated May 10,
2007. (2)10.10
    
    
    Form of Restricted Stock Agreement is incorporated herein by reference from Exhibit
10.1 to the Form 8-K filing dated March 15, 2007.(2)10.11
    
    
    Form of Performance Restricted Stock Agreement is incorporated herein by reference
from Exhibit 10.2 to the Form 8-K filing dated March 15, 2007.(2)10.12
    
    
    Form of Indemnification Agreement is incorporated herein by reference from Exhibit
10.1 to the Form 8-K filing dated October 17, 2008.10.13
    
    
    Form of Written Agreement by and between Corus Bankshares, Inc. and the Federal
Reserve Bank of Chicago, dated February 18, 2009 is incorporated herein by reference from
Exhibit 10.1 to the Form 8-K filing dated February 23, 2009.10.14
    
    
    Form of Consent Order dated February 18, 2009 issued by the Comptroller of the
Currency in the matter of Corus Bank, N.A. is incorporated herein by reference from Exhibit
10.2 to the Form 8-K filing dated February 23, 2009.10.15
    
    
    Form of Stipulation and Consent to the Issuance of a Consent Order dated February 18,
2009 between the Comptroller of Currency and Corus Bank, N.A. is incorporated herein by
reference from Exhibit 10.3 to the Form 8-K filing dated February 23, 2009.11
    
    
    Computation of Net Income Per Share is incorporated herein by reference from Note 17 within Item 8 of this Report. (1)14
    
    
    Corus Bankshares, Inc. Code of Business Conduct and Ethics is incorporated herein by
reference from Exhibit 14 to the Form 8-K filing dated August 31, 2006.21
    
    
    List of subsidiaries  see Part I of this Report23
    
    
    Consent of Independent Registered Public Accounting Firm (1)31
    
    
    Rule 13a-14(a)/15d-14(a) Certification (1)32
    
    
    Section 1350 Certifications (3)
 (1)
    
    Filed herewith(2)
    
    Management or Director contract or compensatory plan or arrangement(3)
    
    Furnished herewith  169




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##### Table of Contents



SIGNATURES
  Corus Bankshares, Inc.By:
    /s/  Robert J. GlickmanRobert J. GlickmanPresident & Chief Executive
Officer (Principal Executive,
Financial, and Accounting Officer)   /s/ Joseph C. Glickman

Joseph C. Glickman
    
    Chairman of the
Board of Directors
    
    April 6, 2009/s/ Robert J. Glickman

Robert J. Glickman
    
    President, Chief
Executive Officer,
& Director
(Principal
Executive,
Financial, and
Accounting Officer)
    
    April 6, 2009/s/ Robert J. Buford

Robert J. Buford
    
    Director
    
    April 6, 2009/s/ Kevin R. Callahan

Kevin R. Callahan
    
    Director
    
    April 6, 2009Rodney D. Lubeznik
    
    Director
    
    April 6, 2009/s/ Michael J. McClure

Michael J. McClure
    
    Director
    
    April 6, 2009/s/ Peter C. Roberts

Peter C. Roberts
    
    Director
    
    April 6, 2009
  170




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##### Table of Contents



EXHIBIT INDEX
 3(i)

    
    Amended and Restated Articles of Incorporation are incorporated herein by reference
from Exhibit 3(i) to the Form 10-Q filing dated May 8, 2008.3(ii)
    
    By-Laws of Corus Bankshares, Inc. are incorporated herein by reference from Exhibit
3(ii) to the Form 10-Q filing dated October 30, 2008.4.1
    
    
    Form of Junior Subordinated Debt Securities Indenture is incorporated herein by
reference from Exhibit 4.1 to the Form 10-K filing dated March 14, 2006.4.2
    
    
    Form of Amended and Restated Declaration of Trust is incorporated herein by reference
from Exhibit 4.2 to the Form 10-K filing dated March 14, 2006.4.3
    
    
    Form of Guarantee Agreement is incorporated herein by reference from Exhibit 4.3 to the
Form 10-K filing dated March 14, 2006.4.4
    
    
    Summary Schedule of Subordinated Debentures is incorporated herein by reference from
Exhibit 4.4 to the Form 8-K filing dated July 2, 2007.4.5
    
    
    Form of common stock certificate incorporated herein by reference from Exhibit 4.3 to
the Form S-8 filed on March 28, 2006.10.1
    
    
    Amended and Restated Corus Bank N.A. Commission Program for Commercial Loan Officers is
incorporated herein by reference from Exhibit 10.2 to the Form 8-K filing dated December 7,
2007. (2)10.2
    
    
    Corus Bankshares 1999 Stock Option Plan is incorporated herein by reference from
Exhibit 4.3 to the Form S-8 filing dated April 30, 1999. (2)10.3
    
    
    Form of Non-qualified Stock Option Agreement under the 1999 Stock Option Plan
(Transferable) is incorporated herein by reference from Exhibit 99.1 to the Form 8-K filing
dated February 16, 2005. (2)10.4
    
    
    Form of Non-qualified Stock Option Agreement under the 1999 Stock Option Plan
(Non-Transferable) is incorporated herein by reference from Exhibit 99.2 to the Form 8-K
filing dated February 16, 2005. (2)10.5
    
    
    Form of Change of Control Agreement between the Company and certain of its officers is
incorporated herein by reference from Exhibit 10 to the Form 8-K filing dated December 7,
2007. (2)10.6
    
    
    Summary Description of Corus Bankshares Compensation for Directors (1) (2)10.7
    
    
    Summary of Executive Compensation issued by the Company(1) (2)10.8
    
    
    Corus Bankshares, Inc. Equity Award and Incentive Plan (As Amended) is incorporated
herein by reference from Exhibit 10 to the Form 8-K filing dated April 26, 2007.(2)10.9
    
    

Form of Non-qualified Stock Option Agreement under the Equity Award and Incentive Plan
is incorporated herein by reference from Exhibit 10.3 to the Form 10-Q filing dated May 10,
2007. (2)
  171




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##### Table of Contents



10.10
    
    
    Form of Restricted Stock Agreement is incorporated herein by reference from Exhibit
10.1 to the Form 8-K filing dated March 15, 2007.(2)10.11
    
    
    Form of Performance Restricted Stock Agreement is incorporated herein by reference
from Exhibit 10.2 to the Form 8-K filing dated March 15, 2007.(2)10.12
    
    
    Form of Indemnification Agreement is incorporated herein by reference from Exhibit
10.1 to the Form 8-K filing dated October 17, 2008.10.13
    
    
    Form of Written Agreement by and between Corus Bankshares, Inc. and the Federal
Reserve Bank of Chicago, dated February 18, 2009 is incorporated herein by reference from
Exhibit 10.1 to the Form 8-K filing dated February 23, 2009.10.14
    
    
    Form of Consent Order dated February 18, 2009 issued by the Comptroller of the
Currency in the matter of Corus Bank, N.A. is incorporated herein by reference from Exhibit
10.2 to the Form 8-K filing dated February 23, 2009.10.15
    
    
    Form of Stipulation and Consent to the Issuance of a Consent Order dated February 18,
2009 between the Comptroller of Currency and Corus Bank, N.A. is incorporated herein by
reference from Exhibit 10.3 to the Form 8-K filing dated February 23, 2009.11
    
    
    Computation of Net Income Per Share is incorporated herein by reference from Note 17 within Item 8 of this Report. (1)14
    
    
    Corus Bankshares, Inc. Code of Business Conduct and Ethics is incorporated herein by
reference from Exhibit 14 to the Form 8-K filing dated August 31, 2006.21
    
    
    List of subsidiaries  see Part I of this Report23
    
    
    Consent of Independent Registered Public Accounting Firm (1)31
    
    
    Rule 13a-14(a)/15d-14(a) Certification (1)32
    
    
    Section 1350 Certifications (3)
 (1)
    
    Filed herewith(2)
    
    Management or Director contract or compensatory plan or arrangement(3)
    
    Furnished herewith  172