A decline in real estate values in some of the hardest hit areas in U.S. ( ie Mich) have led to massive loan losses depleting capital to the point were the bank is insolvent. If all assets were marked to market, the bank is in a negative capital position in my opinion.
I think that is accurate. I would also add that exposure to Arizona and Las Vegas was not so great either. Good thing for CBC shareholders is that, if those real estate markets turn around (or even improve slightly), the loans became viable and the company's financial outlook becomes much brighter.