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