If you ever want to make a die hard Auburn fan swear, there are two words that do it nearly every time. I mean, besides "Bear Bryant" or "Crimson Tide."
Try "Bobby Lowder."
Lowder is more than just an Auburn booster. He's on the university's board of trustees, and some say he's the most powerful booster in all of college football. That's right, he's even more involved than Nike founder Phil Knight at Oregon and oil tycoon T. Boone Pickens at Oklahoma State. Lowder has had a hand in nearly every major decision in Auburn football since 1983.
When Pat Dye resigned after the '92 season, Lowder was encouraging him to do it. When Auburn officials surreptitiously went to Louisville to get Bobby Petrino in 2003, they flew on Lowder's private jet. When Tommy Tuberville finally got forced out after last season, few doubted that Lowder was one of the ones doing the pushing.
As it so happens, Lowder gets his power, money, and influence largely by being the CEO of Colonial BancGroup. As you may have noticed, things haven't been going so well for many banks since mid-2007, and Colonial was heavily invested in what have become the nation's worst real estate markets like Florida and Nevada.
Paul Davis of the Opelika-Auburn News detailed Colonial's and Lowder's troubles in a February column. That piece caught the eye of Jay at Track 'Em Tigers, who likewise hoped that the recession would mark the end of Lowder's influence at Auburn.
Colonial's stock closed yesterday (April 20) at 83 cents. That's down 96.9% from its all-time high of 26.69 in February of 2007. That's what happens when the government decides your bank isn't healthy enough to get any TARP money.
Yahoo! Finance has records of Lowder's trading (as the CEO of a public company, he must disclose it), and on May 7, 2007 he owned 6,562,828 shares of his company. That day's close of 24.86 made his fortune in Colonial shares worth a cool $163.1 million. His current holdings of 7,678,590 shares are worth only $6.37 million, just 3.9% of his former total.
I'm guessing that Lowder has money in more than just his Colonial holdings, so he's got more than just that to his name. However, he's been brought down quite a way for someone who's given more than $20 million to his alma mater.
As it turns out, Colonial was able to find $300 million in investment money in order to qualify for $550 million in government bailout funds. Well, mostly. There's some legal wrangling left to do, as the investors won't commit the funds without the government putting it in writing that its part is coming too.
And even with this development, Colonial isn't in great shape. It's financial strength rating is E+, with A being the top mark on the scale. Plus, some shareholders are suing the company over Lowder being somewhat dishonest last December about disclosing regulatory actions taken by the state of Alabama. Tiger fans, try to contain your shock.
In any event, Colonial will almost certainly be headed for insolvency and FDIC receivership at some point if this round of private and public funding falls through. Many had given up on the possibility of Colonial getting enough private money to qualify for government loans, but at the last minute it's back on the table.
What does this mean for Auburn?
Well, it means we can't yet say that the recession will K.O. Bobby Lowder. It's brought him down pretty far, but he's not out yet. Then again, given his realm of personal influence it's difficult to predict that he'll ever truly be out of Auburn's business while he still draws breath without intervention from the law or the NCAA.