CORRECT:Treasury Loses Money In Auction Of Six Small Banks' Shares
March 29 2012 - 11:26AM
Dow Jones News
The Treasury Department on Thursday announced that it lost money
in the public offering of its preferred stock in six small banks
this week, though the department netted a profit when counting
dividends and interest paid on the investments made during the
financial crisis.
In the first-ever auction of preferred stock through the
Troubled Asset Relief Program, the Treasury recouped about $362
million of the $410.8 million it invested in the six small
banks.
But the department said total income to taxpayers--counting
dividends and interest along with auction proceeds--was $426.4
million.
More than three years after the launch of TARP, the federal
government still owns stakes in about 350 banks. While the biggest
institutions have long since paid back their rescue funding, many
smaller banks have been slow to exit the government.
The divide in part reflects the difficulties faced by many Main
Street banks, often saddled with poorly performing commercial real
estate loans and limited ability to raise new funds. Together with
weak regional economies and a tough lending environment, the banks
have not been able to exit TARP.
Before this week's transactions, $16.42 billion was outstanding
under TARP's Capital Purchase Program, the main federal effort to
help stabilize financial markets.
The Treasury sold its stakes in six banks as it looks to recoup
its investment. The six have kept up on dividend and interest
payments to the Treasury, making them relatively healthy compared
with institutions that have skipped payments in an effort to hold
on to cash.
The six banks were Banner Corp. (BANR) of Walla Walla, Wash.,
First Financial Holdings Inc. (FFCH) of Charleston, S.C.;
MainSource Financial Group Inc. (MSFG) of Greensburg, Ind.;
Seacoast Banking Corp. of Florida (SBCF) of Stuart, Fla.; Wilshire
Bancorp Inc. (WIBC) of Los Angeles; and WSFS Financial Corp. (WSFS)
of Wilmington, Del.
-By Andrew Ackerman; Dow Jones Newswires; 202-569-8390;
andrew.ackerman@dowjones.com
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